Income vs. Savings

Like any other habit, savings is also a good habit, which requires a lot of attitude and endeavor. They say, it does not matter how much you earn; what matters how much you save from that earnings. A person can earn $5,000 per month but he spends $4,500 on his income. In this case, his total earnings should be calculated on how much of his income remains unspent. It is $500. This should be his actual income. On the other hand, you may earn $1,000 per month but your spending is limited to or within $300. Therefore, you earn actually $700 per month. You are, in fact, richer than the former. Income helps in savings but spending should be restricted to this income and if so, your savings will set off. Inculcate the habit of saving a little money. It will boost your financial status and, hence, your satisfaction.

Why do you need to save?

If one thing is certain in life, it is the uncertainty. Any time some unexpected things may happen in any one’s life A natural disaster, a sudden lay-off, the collapse of economy, unexpected illness etc. are a few to mention. At these crunch moments, you need to have some bank balance to move on. If you have significant money at hand at that time, a financial crisis can also keep your chin up. You can steadily analyze your needs and make your plans accordingly. Besides, you may wish to purchase a house or a new car in future. A well-maintained savings plan will help you realize your goal and will also not make a hole in your pocket. You will not be in debt and have enough money to spend too.

How to start off?

First, open a savings or a checking account, if you do not have one. Deposit a substantial amount of money in the account. Frequent your bank and deposit more money. Try spending less than you earn. It may not be easy but it is not a Herculean task too. If you do intend to have a good portion of your money at the end of the month, review your expenditure. Make a budget. You need to be aware of your incoming and outgoing money. Once you know about this, you can find some areas where you can actually save money. Spend as much as you truly need and keep the unspent money in your bank account. Record your expenditure and earnings, and evaluate this off and on. Check this video below which will guide you to saving money.



In fine, you would believe that savings is more satisfactory than earning itself. Earn as much as you can and spend as much as you need. Utilize the value of any product or services to the most and avoid wasting the same as far as possible. After this, you will surely have some bucks to spend more, which will add to your existing income and hence, pave the way for more expenses. Wish you all the luck.