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My three principles for saving money and building wealth

Updated: May 30, 2021

C.R.E.A.M Get The Money

How to start saving money

Saving money is simply living on less than 100% of your income. Yet over 60% of the population of the U.S. ha as less than $500 in savings. The poverty rate in the United States is currently around 13%. So that means that the majority of people (78.33% to be exact) who don’t have savings are not living in poverty yet have not found a system for living on less than they earn. I personally believe that with the right mindset and the right tools, saving money consistently becomes possible for anyone.

What is the difference between someone who is good at saving and someone who is not? If making more money than you need doesn’t create savings then what does? I believe the answer is the principles we choose to live by. Our principles are our guides for how to perceive and behave in the world. Some principles only apply to certain areas of our lives and others may apply across the board. A principle can be used for a day, a month, a year, or a lifetime. The purpose of having principles to live by is that when your emotions cloud your judgment, your principle can help guide you in the direction you want to go. If your actions are aligned with your principles then you don’t need to second guess your actions. By taking actions that are aligned with your principles you will reduce your stress and free up your mental energy. The principles in this article are designed to help me save money and build wealth for the future. They work very well for me. I have been practicing them for almost a decade and over that time I have gotten better at keeping my actions aligned with these principles. If these sound like principles that you would like to try out for yourself, I encourage you to do so. Principle one: Saving Money Requires Practice.

“If you cant save $1 you cant save $1000”

I used to think “what’s the point” when it came to starting to save. If I made a ten bucks and took a measly dollar bill out and put it in a box, what difference does that make? In my mind I needed to wait until I had a really busy day at the tattoo shop to start saving. Early on in my career, during the busier season I could sometimes make a thousand dollars in one day. But then I’d get the money and fantasize about all the things I could buy and think “ill start saving money, right after I buy this new bike.”

Let's look at this, what is happening here? On the one hand I think saving one dollar is pointless, but when I get a large sum I don’t save any of that either. Saving money is NEVER about how much money you make or have. Saving money is something you must practice regularly in order to get good at it. Even people who are “naturally talented” at something still practice in order to get better. So its no wonder that I wasn’t able to save any part of that thousand dollars. If I cant save one out of ten dollars than I don’t stand a chance at saving any part of one thousand dollars.

This first principle for saving money and building wealth is “saving money requires practice.” You cant expect to run a marathon without ever having run one mile. There is no better example of this rule than that of the lottery winner who squanders millions of dollars in a few years and ends up worse off than they were before. If you were never great at handling money then when you receive a windfall of cash it is not going to make your life or your stress any better. So if you want to learn to save money, start with taking one dollar out of every ten dollars you earn and tuck it away in a shoe box or better yet a “high yield” savings account.

Principle two: Pay Yourself First

“Live on what’s left, don’t save what’s left”

I am not the “budget every dollar” type of saver. In fact I despise the word “budget” all together. I prefer the term “spending plan.” Tracking each and every dollar works really well for many people but it’s not for everyone. With my fluctuating income and my rebellious nature, I don’t want to be told how much money I’m allowed to spend on take out coffee each month. What works best for me is what some people call the “anti budget.” To do this I first decide on a percentage of my total income to save (10-20%)and with that I will “pay myself first”. Before I pay my rent or buy groceries with my income, I take this set percentage of my income and split it between my savings/investment and retirement accounts. If I don’t do this then the money is likely to find its way into the pockets of everyone els but me. After I pay myself, I plan out only my set expenses where I don’t have control over the price like rent, phone/internet, subscriptions and an average for utilities. I make sure i‘ve set aside money for these things and then I live on what’s left. I’m free to spend this “left over money” any way I want. I know the important things are covered. And although food and groceries are pretty important, I also have a lot of control over how much I spend on food. So if I want to buy a $5 ice coffee every day, I am free to do that. I will just have to make sure I don’t over indulge in some other area like ordering takeout food or buying some unnecessary gadget or doodad.

By paying myself and my set expenses first I create a false sense of scarcity. I don’t view my savings or the money for my set expenses as my personal spending money. Its almost like lap-band surgery for my spending. When I earn $100 I know that I have to save 15-20 dollars and that 40-50 dollars has to go toward rent and bills. If I dont do this immediately then I know that I will feel the stress of over spending. My incentive to not touch a hot stove is to not get burned and my incentive to pay myself first and plan for set expenses is to not feel the pain of money stress. The added incentive is that I’m putting money toward building abundance for my future which I think about every time I put money into my savings.

If you try this method of saving and you still over spend then you may want to experiment with a spending plan where you track each and every dollar. You can also experiment with mixing aspects of one with the other to find a customized strategy that works best for you. Maybe there is only one area like clothes or takeout food where you tend to overspend and you can make a set dollar amount to spend on these areas.

So the second principle of saving money and building wealth is to pay yourself (and your bills) first. By shifting my priorities to saving I don’t have to feel guilty if I splurge on clothes or drop five bucks on iced coffee because I know that I have saved what I said I would save and my rent and bills will get paid.

Principle three: Make Your Money Work For You

“Don’t get high on your own supply”- quote from the movie Scarface

Is money a drug? Science tells us that the serotonin boost we get from spending money is similar to the feeling that we get from narcotics. So when it comes to the percent of your income that you pay yourself, don’t EVER “get high” on this supply. You can get your serotonin boost from what’s left over after saving and paying for the necessities. The money in your savings is intended for a much greater purpose, to build wealth for the future.

So like… I can spend this savings on a vacation in the future right?


But what if I just use some of it to buy a new phone and then just pay myself back the next time I get my paycheck?


Wait, I don’t understand. What’s the point of saving money if I cant ever use it?

This savings has one purpose. This savings is going to work for you. I don’t care if it only grows 1% annually in a savings account or you seek higher returns in the stock or real estate market. The ONLY purpose this money has is to work for you and make more money.

Oh ok I get it now. My money is going to make me more money and I can use that money to go on vacation!


Dude wtf? I’m tryna get my drink on in Cancun.

“Cancun money” comes from the leftover money pile. If you want to save part of that to go on vacation or buy a new phone thats fine. The money you are paying yourself first is going into your “build wealth pile”. This money will work for you and make more money and the money it makes will also work for you. This is also known as Compound Interest

If you decide to take money out of your “build wealth” pile, you have 2 options. The first option is to spend it on an asset that grows in value like a stock, a bond or possibly real estate. The second option is to use a portion of this money to increase your potential income. This could be starting a side business or increasing your businesses earning potential. With either of these two options you want to be sure that you are qualified and possess the necessary knowledge and experience to judge weather or not your investment will have a positive ROI “Return On Investment”. If you do not feel that you yourself are fully qualified or just want to seek additional advice, make sure the person you take advice from is qualified to give this advice.

So the third principle of saving money and building wealth is that the money you save must only be used to grow more money and increase your earning potential.

Principle 1- Saving requires practice Principle 2- Pay yourself first Principle 3- Make your money work for you

These three principles are some of the most important tools I have learned to use to cultivate a healthy relationship with money. The concept behind using principles seems simple but just knowing what the tools are is very different from practicing them in your life. If you find that your struggling to stick to a set of principles I recommend checking out this article on my relationship with money which might help you form a mindset that helps you practice your new principles.

And if you are still struggling to create and stick to a set of principles around money then I urge you to schedule a free Clarity Session with me. We can talk about what your dealing with and discuss the possibility of working together to reduce your stress around money and follow through with your vision of the future for yourself.

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