There is no shortcut available to become a millionaire. Everyone becomes a millionaire to follow some tricks, tips, hacks, methods, and habits told by experts, and scholars. Here I will tell you some Brilliant saving tips to become a millionaire, and how you can save more from your daily expenses. These saving amounts will be suitable or beneficial for investments, businesses, and startups.
Grow a mindset of your own and your children from an early age about saving. Everyone becomes rich if start saving at an early age. Compounding has big magic. Einstein told in a workshop that compounding is the 8th wonder of the world. Warren Buffet also earned huge money that he owned after the age of 50 due to compounding. He earned on profit along with saving.
In this article, I researched only to save money from daily routine expenses. I applied these tips in my life and grabbed many benefits. I will share with you the methods of investment in another article. There are other many tips also available but I wrote here only the methods which are easy, practicable a beneficial for everyone.
This method is called the Kakeibo method of saving which was delivered by a well know and 1st lady journalist in Japan Hani Motoko. She started a magazine about issues related to women. When she became famous among the women of Japan, they started asking Hani Motoko a question about how to save. That day Japan faced a recession due to world war-II.
After receiving so many queries the said Journalist realized that saving is a collective issue all around the world. Everyone wants to learn about saving or wants to save. But only those people got success who have the will to learn and apply it in their life.
This issue is the same as weight loss issues or health-related issues. Everyone wants to be smart or healthier but does not agree to change their life accordingly. They don’t do gym, yoga, or exercise constantly. Some of them smoke and take junk food. But want to be smart and healthier without leaving bad habits.
She started research to find a permanent resolution to the issue. She struggle a lot, met with economists and experts, read books, newspapers, magazines, and researched savings and economics. Resultantly find and delivered this method which is called the Kakeibo method of saving or the Japanese method of saving. This method is beneficial for 80 years. Most Japanese women benefited from it. When the world’s world learned this method they also find this beneficial.
According to this method before saving you should write and analyze the following 04 Questions:
- How much money do you earn?
- How much money do you want to save?
- How much money do you spend?
- How can you increase your income?
When familiar with the above-mentioned questions you should follow 04 steps of the same method.
Step 1: Conduct an Annual Review
Analyze of previous year’s expenses. Which unnecessary items did you purchase and got no specific benefit from them? Which items were necessary but you didn’t purchase them due to a low budget or any other reason?
Step 2: Create a Monthly Spending Plan
Make a monthly plan of your income and expenses. How much are you earning and how much expenses? How much are you saving right now?
Step 3: Determine Your Weekly Spending
Determine all expenses and divide them into four following categories:
01. Survival expenses
These are all the expenses, which are necessary for living, e.g. groceries, medicines, dresses, shoes, beds, etc. electricity, Gas, and fuel are also part of this expense and necessary for living. Without no, a person can survive.
02. Optional expenses
These are all those expenses, you can live or survive without them, like extra watches, wall clocks, branded clothes, and shoes. Vehicles are also included in optional expenses because men can travel on local transport services, motorbikes, and Scotty. Bicycle is more beneficial for health along with transportation.
03. Extra Expenses
Offering Gifts on birthdays and wedding events to friends, relatives, colleagues, and neighbors is an extra expense. Extra vehicles and mobile phones are also extra expenses.
04. Cultural expenses
Lunch and dinner outside, hoteling, visits, picnics, functions, and concerts, are all cultural expenses. Many people don’t know about them. They have a living better life than those who are expending their money on cultural expenses.
Step 4: Do a Monthly Review & Analysis
Analyze all monthly expenses. Know about all expenses deeply and learn which expenses are unnecessary and necessary for you. How much money have you invested and wasted? Assets like vehicles, motors, crockery, refrigerator, or any other household items will be included in invested money.
After analyzing on Kakeibo method of saving I recommend you some tips and methods to save more. By following these tips your expenses will reduce.
1. Save before than expenses
Most people in the world start expending their money in the early days when they received wages. In the end, they have no money for investing or saving. This is not a good practice for saving. Foremost save a pre-specified amount then start saving.
Always remember this formula and apply it in your professional life that invests before expenses. The saving has more value than expenses.
2. Sale out all wastage and Generate extra income
Every house has many items which have not been in use for many years. We stored and engaged a place without any benefits. We can take many benefits from this place and can use it to get better purposes. Mostly we stored old furniture, useless and old equipment.
You can purchase necessary and more beneficial assets to sell these useless items. In rich areas of the world, people keep useless items outside of their homes, and needy people received them without any permission. They don’t store and engage a place and time for them. They know the values of assets and time.
3. Divide expenses into 03 parts
Divide all expenses into three categories.
- Most important for living. Like grocery, wheat, flour, sugar, milk, etc.
- Utility expenses. Like gas, electricity, internet, and mobile phone charges.
- Extra items. like vehicles, devices, ceremonies, functions, etc
When you intend to shop think carefully, and purchase according to the categories. Foremost purchase the most important thing for a living, then utility and, then extra items after saving your pre-specified money.
04. Create a Balance between income and wills
Don’t purchase and save your money beyond income. Always remember the income before saving and expenses. Most companies, countries, and family bankrupt due to this habit of extra expenses. It is necessary to survive in any condition to control expenses to the limit or balance with income.
05. Convert purchasing into investment
Always struggle to purchase quality items and appliances for your use. After some research, you can find the difference between the qualities of every item. Because these appliances are your assets. It stays a long time with you. If you purchase low-quality appliances and assets then you will expend more money on repairing and repurchasing.
Focus on purchasing land, jewellery, shops, and animal instead of other useless items. These are all assets that increase in value after the year.
For example, if you need to purchase jewellery. You have many options, there are many types of jewellery are available which can fulfill your need and desire. But you should purchase only that jewellery which has to be resold and can increase in value when you intend to resell like gold jewellery. But if you purchase artificial jewellery at the half price of Gold you can’t resell it. Your money will be wasted after a particular time or after its use.
06. Purchase in Bulk, / from the wholesale market
Many items and things that we use again and again but use on daily basis in the retail market. The prices of the retail market are higher than the wholesale markets. Always try to purchase from a wholesale market in bulk items that have more need or you use them again and again.
Like coffee, tea, sugar, and other many things which we use daily and purchase in low amounts from retail stores but we can purchase these items from wholesale markets in bulk. We can save a huge amount after some research, struggles, and thinking.
Before purchasing in bulk, remember one thing these items are not perishable. Some items, like onion, green coriander, and spinach are not storable long time. These items always are purchased from fresh or retail markets.
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07. Decrease fixed Expenses
We don’t focus on reducing fixed expenses having many options for reducing them. For example, if you are living in a house, not in an apartment, then you can reduce your electricity charges by installing solar panels or wind turbines. The same options are available to reduce gas charges. You can also produce fresh vegetables in your home instead of purchasing them daily which is too many costly. You can also produce grass and fresh food for your pets.
There are other many options are also available where you can save your money. This method looks not important and looks low valuable but you can save huge money from it. This is also good for the health of you and your family and pets. Health automatically will improve when you provide them with fresh vegetables and fruits from your home instead of buying old ones from stores.
08. Increase income source
You can’t be rich if you are not trying to increase your income sources. Successful millionaires have so many sources of income. You will not survive on one source of income in the future if any rescission starts immediately.
In this age of technology, there are so many easy options available and these options are increasing where you can generate your extra source of income. If you are an expert in any field you can teach the same to others and it’s can be your second source. When you teach on any platform then you have an audience and you can sell them any product which can be your own or you can earn through commission to sell others’ products.
09. Invest in Compounding Systems
It is the best option to save to invest in a compounding system. Einstein told us many years ago that compounding is the eighth wonder of the world. You have the will to save consistently a particular amount on a monthly or quarterly basis and then increase it according to your income. After some time compounding income will generate more profit than you are investing on monthly basis.
For example, if you start investing 5000/- each month. In the early years, you invest more and get few amounts as a return but after 10 to 15 years you invest only 5000 to 10000 per month but generate double to triple a return or profit from it due to compounding. Hence, the journey of being a millionaire will start. It’s not as simple as you think to become a millionaire and not as difficult as many people quit in the early stage.
Conclusion
At The end of the article, I will suggest to you as per the observations of Warren Buffet, the richest personality in the world that purchase only these things which are necessary for living. Without something, you can’t survive in this world.
You can live in a small house instead of a large palace. You can commute in an average vehicle instead of a luxury. The same method also applies to all of your daily useable appliances.
It’s not beneficial only for you but it’s more beneficial for society, nations, and the world. Your saving has a more impact on your country than you. You can provide advantages to more people with only your one decision i.e. invest your money in a beneficial place instead of purchasing branded and luxury items.
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I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.