Saving money

Financial literacy is very important in saving money.Many people have a habit of spending all the money they get and buy things they cannot afford through loan, credit or debit and be in debt all through their life. Depending on the situation you are in you should device a means to be out of debt as soon as possible. If you are paying very high interest up to the rate of 18 % then pay off the that as soon as possible even before you can even think of start saving.

You should start saving a minimum of 10 percent. You can put it in mutual funds or in stocks . If you have other sources of income like rent, direct selling, tuition etc. try to save from that also rather than spending it all. You might also inherit houses or get bonuses, cash gifts etc.

Millionaires are not always people who have had very high salary. Many had just enough to live and saved and put in bank where the interest have compounded or have put in stocks or mutual funds and made the money work for them. Before buying any thing you should be sure that the thing is absolutely essential for you. When you purchase something on credit the money is not working for you but is working against you. That is you are paying up to 18% interest or more for the thing than if you buy without credit. This means you are losing money.

You can save 10% of your income from deducting at source by making an arrangement with the bank to deduct the money to a separate savings account. The earlier you save the little you have to save to become rich. If you start saving $100 every month when you are 18 for a hypothetical 12% compound interest you will become a millionaire by the time you are 57 years old. If you start saving $300 every month when you are 30 you will become a millionaire only when you are 61 years old. In the first case you had to put a total of only $46800 to become a millionaire while in the second case you case you had to put a total of $111600 to become a millionaire.