Smarting with Small and Finishing in Big: The Biggest Wealth Formula for You


Then add a small amount to your basic monthly expenses to cover your personal expenses. Include money to spend on fun and entertainment such as parties or travel. It is a great idea to review all your expenses in depth and understand in detail what you are spending your money on. This way you will know where to cut unnecessary expenses.

Decide how much to save

Now that you know what your income and expenses are, you should be able to see more clearly what your savings potential is.

Subtract your expenses from your income and you will get the difference. Let’s assume that your total monthly income is 1,600 euros and your total expenses 1,200 euros, so what you can pay yourself first is the difference between the two, which is 400 euros. You can Click here for more info  and have the best solutions right there.

  • It could be that this amount is negative if, for example, you earn 1,100 euros and spend 1,200 euros (savings = -100 euros). If this is the case, it means that you are living above your means.
  • This means that you will have to make major changes to the way you spend money.
  • Cut back on your expenses until at least your savings are no more.

Open your savings and investment accounts

In order to pay you earlier, you will need to open a savings account where you can send the money you’ve decided to save. It should be different from the checking account you use to collect your salary and pay bills and expenses.

Depending on what your financial goals are, you may need to open multiple checking accounts. For example, the first thing to do is to open an account to create your emergency fund.

Once you have created financial security with your emergency fund, you can open other accounts for other projects or goals you have. You can also create an investment account to start accumulating money for your financial freedom.

If you have decided to pay yourself 600 euros a month, you will have to select how to distribute this amount. For example, you could decide to save 400 euros for a car, and use the remaining 200 euros to invest in other projects.

Automate the process

Once all the accounts are open, all the pieces needed to apply the payment rule are ready. All you have to do is put the money into the checking account as soon as possible.

The best thing you can do is create automatic transfers from your checking account to your savings or investment accounts. This way you will avoid spending the money you want to save on any temptation.