“Some of what you earn is yours to keep”
I heard this quote from a personal development book I read many years ago. I believe the book was called The Richest Man in Babylon. It was just one of the principles of wealth presented by the book.
Financial management is one of the factors that influence your happiness.
Many people struggle with the principles of wealth. The formula is simple: soen less than you earn and put that surplus to work. Yet, there is another force in your life tugging in the opposite direction: people spend money to directly improve their happiness. They spend money to improve their lifestyle, then they don’t have it. Almost every situation that you can be in, you can work out a way to spend less money. Live in a smaller house, drive a cheaper car, buy less clothes, eat out less, there’s always something.
Yet, spending money to improve your life and enjoyment is also important. Being a miser and never spending any of your money on anything that is not absolutely necessary is not generally an enjoyable life. The solution is a balance. Allow yourself to spend some money to increase your lifestyle and enjoyment, yet keep as much as you reasonably can so you can put it to work for you. When you’ve built up enough wealth, it can eventually replace your income with the income or interest it earns for you.