Why is savings rate important?
When you are steering towards Financial Freedom it’s fun and satisfying to look at your income raising from month to month. However, income is only a part of the equation. Expenses are just as important. Still, a lot of people choose to neglect this area. Why? It’s obvious… It means cutting down on all the things you’re used to buy for short term pleasure! Who want’s to cut down on fun? We all want to be rich to spend lots of money, right?
Raise your awareness
The thing is, every small purchase will postpone the day you will be able to retire as a financially free human being. Every unnecessary purchase means more working years. Is it really worth it? You don’t necessarily have to be a fanatic about money and sit on your wallet like a cheap scotchman during a finanial crisis. But if you start being aware and ask yourself if you really need the thing you’re about to buy, you’re doing yourself a huge favor. More often than not, you will be able to postpone the purchase. Maybe you will even forget that you wanted it in the first place.
To make it easier to save, I tell myself: I’m not denying myself this treat. I’m going to get it… LATER. I’m just postponing the purchase a few years. I’m going to buy it when I’m rich – when I’m financially free! Continue reading “Savings rate – Increase income or save more money?”