Wealth is created by how much you save, not how much you make.
The first step to creating wealth is to keep track of what you’re spending. As you track your expenses, I urge you to keep it simple.
Create four/five main buckets for all of your expenses, and keep track of this either on a digital source like Google Docs/Sheets or Evernote, or keep it classic and use pen and paper.
Depending on your circumstances these buckets may make sense for you:
- Housing (rent, utilities, internet, phone etc.)
- Transportation (insurance, gas, train/bus fare, uber, etc.)
- Food (groceries, dining out, coffee/tea, etc.)
- Education (student loans),
Monitor these categories weekly and take note of where you may be habitually overspending.
Keep in mind that forming a new habit is difficult, so involving family and friends to hold you accountable is critical. Talk to your friends and family ahead of time, share your goals with them, and ask them to help hold you accountable.
Also, avoid the urge to over complicate the process, budgets tend to fail when people aim to create the “perfect plan.”
It won’t be perfect at first and it will likely go through many iterations as your life changes, but I encourage to take a leap and stay the course.
For more information on creating wealth and saving, this article includes eight steps that will help you lay a proper foundation to save:
“You don’t have to be great to start, but you have to start to be great.” – Zig Ziglar