Your journey to riches starts here.

Saving money can be the most difficult task a person can do. I have seen people in their 40’s that do not have savings at all. When I asked them how come they do not have any savings, their reason is that they find that their income is not enough to set aside for any savings.

The art of saving money is actually very easy. It is very important to know how much to save every month and how much savings one must have. Once you have the adequate savings in your bank, you can then accumulate wealth. Why the rich accumulate wealth so quickly is because they invest their money after they have saved enough money in their bank. Most of the times, the rich have their own personal financial planner to track their finances and advice them.

Nevertheless, you do not need a financial planner to tell you save money. If you are clueless on how much to save each month, let show you step by step with the example below.

EG 1

Norman is earning $4,500 and his wife is earning $4,000. On average, the couple would spend $7,000 a month on expenditures which includes their insurance and household expenditures. Norman and his wife are looking into accumulating their wealth and are very interested in investing their money in stocks and shares. The couple also wants to diversify their portfolio and are looking into unit trust and bond funds. Currently, they have $49,000 in their savings account and wants to find out how much is the best amount to come out for their investment.

From the above example, Norman has a savings ration of 7. (Savings divide by monthly expenditure). Savings ratio is a ratio that will tell you how many months can you depend on your savings if you get retrenched or out of job. In this case, Norman has 7 months to find a new job before he drained up his savings. From a professional point of view, Norman should invest $28,000 of his savings and maintain a savings ratio of 3.

EG 2

Kelvin is a fresh graduate who is clueless on how much he should save for any emergency uses. He has been working for 6 months and currently earns $1,600 a month. Even though he has been working for 6 months, he has not been able to save any money because he tends to spend all of them by month end. He usually keeps aside $100 but end up using that money usually at month end.

In this case, it is clear that Kelvin do not have any money management skills. As a guideline, one must save 20% of their income. Saving of money is done on the very day that you receive your pay. Therefore, Kelvin must save $320 a month and live with the rest of his pay. He has to have a budgeting system on his expenditures and be very disciplined.


To sum up, in order for you to be financially stable and accumulate wealth, you need to have good money management skills, excellent saving habits and be extremely discipline. You need to save 20% of your income every month and maintain a savings ratio of 3 to 6. I am very sure that you can achieve your financial goals if you are able to take control of your own finances. It is time for a change.