The Budgetnista Breaks Down the Golden Rule of Saving Money

Saving money: the cornerstone of personal finance . Striking the right balance between saving and spending can result in financial growth and stability.

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However, it can be very easy to spend more money than you save, or worse, end up in debt. If you’re behind on saving money, don’t fret. There’s one guiding principle that can help you get started: the golden rule of saving money .

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The Golden Rule of Saving Money Explained

Tiffany Aliche, otherwise known as The Budgetnista, explained the golden rule of saving money : always saving a portion of your income before spending it — it’s that simple.

This fundamental principle encourages you to prioritize saving over impulsive spending to help secure your financial future. Saving for your future now creates healthy financial habits and can have positive long-term benefits.

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Why the Golden Rule of Saving Money Is Important

Consistently saving money makes you prepared for the unexpected. For example, you could be hit with a surprise medical bill, an unexpected auto repair or a job layoff. Already having money saved can mean the difference between being able to cover your expenses or landing yourself in high-interest credit card debt.

Consider setting up automatic deposits to a high-yield savings account that aligns with your payday. This way, you won’t notice that the funds are missing and your money will grow over time thanks to compounding interest.

Steps To Implement the Golden Rule of Saving Money

Implementing the golden rule requires careful planning. Here’s how you can get started:

• Set financial goals : Goal setting is key to saving money. Maybe you want to make a down payment on your first home or take your family on a vacation. Putting enough money aside little by little can help you reach your goals on time.
• Create a budget: Once you’ve set your goals, be sure to create a budget. You can use a computer spreadsheet or the good old-fashioned pen-and-paper method. Set strict spending limits for each category and see which monthly expenses you can cut back on.
• Take advantage of saving and budgeting tools : Whether it’s budgeting tools in your banking app, cash-back apps or automatic bank deposits, taking advantage of saving and budgeting tools can help you follow the golden rule of saving money.

This article originally appeared on GOBankingRates.com : The Budgetnista Breaks Down the Golden Rule of Saving Money