The 6 Golden Rules To Saving Money And Retiring Rich

The golden rule in life is that you have to save in order to become rich. Getting started on the saving is the problem, though.

Let’s face it, you have bills to pay and at the same time you want to live a comfortable life, hence saving might not be your cup of tea.

But at the same time, your future also matters. You want to retire with a bang when that time comes.

The only way you can get started on saving is to follow these golden rules of saving.

Related: 5 Best Saving Tips If You Earn Between 15-50K For 2017 

The 6 Rules To Saving Money

It takes a lot of guts to be able to deduct a chunk of your money and put into a savings account.

However, when you think about it, it feels good to know that if things went haywire, you have got some amount stacked up somewhere for a rainy day.

Let’s then look at the golden rules to saving in order to retire rich.

1. Settle all your debts

With debts, come interests that you pay.

The first and most important golden rule to saving money is to settle your debts and avoid taking loans. The moment you eliminate your debts is the moment you can start saving.

Avoid taking loans and instead, learn to live within your means.

2. Don’t just save invest

Saving that money in a bank or savings account will not do you any good if you don’t invest. Let’s say you opened a savings account and have been saving for almost a year.

Think of profitable small business ideas where you can invest the money.

As human beings, we are prone to temptations. A time will come when you will need money so badly and where is the first place you look.

Yeah, you guessed it, your savings account.

Investing this money will ensure that you not only have money stacked away but that you have something that brings in an income.

Related: 8 Profitable Businesses You Can Start With As Low As 5-10K

3. Make short term and long term saving goals

Short term goals entail something like that latest Samsung phone model you want to buy., This will require you to make a plan of how much you will be saving every month in order to buy the phone.

For long term plans like retirement, this requires you to do thorough planning.

The golden rule is that you should not ignore your short term or long term goals.

4. Make a calculation of the amount of money you want to save

You can’t just save without a plan. Think about how much you want to save. What’s your target at the end of the year?

I for one follow the 52- week savings challenge where I know that this week I have to save this amount of money.

I have a target of how much I want to have in my account come the end of the week, which makes me remember to save every end of the week.

5. Create a budget

This is not just about scribbling some things on a piece of paper and calling it a budget. Make it a realistic one.

This means budgeting on everything no matter how small, from your transport to the HELB loan repayments.

This will help you track how you are using your money and ensure that you live within your means.

6. Pay yourself first

Create a savings account and ensure that you use it. When you get paid, direct some of the money into your saving account.

For instance, if you earn 20K, direct 2K into your savings account. That will ensure that you always save before you can even use the money.

If you find it hard to save, you can ask your employer to be deducting a certain amount and direct the money into your savings account. You can also join any of the Credible Sacco’s In Kenya and the money can be deducted directly when you get paid.

Related: 7 Brilliant Tips On How To Save Money In 2017 

The writer is a Communications & Digital Marketing Officer at Career Point Kenya. Contact her via lilian@www.careerpointkenya.co.ke