Money’s Golden Rule: Spend Less Than You Earn

I've been interested in money for a long time. At age 7, I learned the concept of interest and more importantly compound interest. Even at that early age, I was enthralled by the concept of getting free money for doing nothing. As a natural progression, I started reading personal finance magazines like Kiplinger's Personal Finance and Money Magazine. In some 27 years of studying personal finance I have learned a lot.

You'd think I would have learned it all in the first 15 years. Unfortunately I didn't. It wasn't until age 30 when I started blogging about personal finance that I really started to learn about money. After a few months of blogging and reading other blogs, I came across one statement that summed up everything:

Spend Less than You Earn

There are few topics as large as money that can be summed as succinctly (though we'll cover another similar tomorrow.) Though it sounds simple, it is very complex. There are a lot of people who either don't realize that's the secret or can't follow it. Too many people are living paycheck to paycheck. It's a dangerous and stressful way to live. It can shut you out of opportunities to pursue your dreams. What's the answer? Educate yourself (as usual).

Spend Less

There are a lot of ways to spend less money. I'll be covering many of them over the next few years. I thought I'd just tease you with a few though. What if you could save $100 a month on interest payments? What if you could save another couple hundred on subscription services and utilities? What if you didn't buy that doohickey that now sits in your closet? If you learn about how to get more value for your money, spending less doesn't have be as painful as it initially sounds.

Earn More

On the other side of things, there are a lot of ways to make more money too. What if you were better at giving presentations? What if you were better at writing proposals to your boss? Perhaps those things that are going to get you a promotion or a raise? What about simply knowing how to negotiate for raise? What about investing your money so that you get more free money for doing nothing? What about side businesses or hobbies that actually make money? We'll get to these in time, but hopefully you can see the possibilities here are endless.

When you put together spending less and earning more, you grow that nest egg that hatches into early retirement and/or financial freedom. Financial freedom is where a lot of people's dreams come true.

Further Reading: Would You Rather Earn More or Spend Less?

Photo Credit: Binary Dollar

This post involves:

Money / Personal Finance, Save Money

... and focuses on:

earning, spending