I’ve often been asked for advice about effective money-saving rules for young people. 

People often ask me if it’s possible to be financially secure by 40 or even 30.

The answer is yes, and if you follow these simple money-saving rules, you will have a secure financial future.

Rule # 1. Avoid lifestyle inflation

Spend less than you earn. Save every penny you can, and don’t spend more than necessary on things that aren’t important to you (e.g., buying a new outfit for the office party).

It’s not about setting up a budget and then following it exactly—it’s about making conscious decisions about what needs to be bought and when.

Rule # 2. I avoided the credit card debt

You are digging into a hole if you are in debt and only making minimum payments on your credit cards. You will never get out of debt this way.

It is too easy to spend money we do not have using a credit card.

Credit cards offer fraud protection but provide an easy way to spend more than our budget allows.

Settling the credit card balances at the end of the month is one of the soundest money-saving rules you can ever have.

Rule # 3. Switch jobs after negotiating higher pay

One simple money-saving rule is to switch to a higher-paying job. A new job is one of the easiest ways to earn more than requesting higher pay in the same company.

When making your next career move, you must be prepared to walk away from an offer if the employer doesn’t meet your expectations.

So, research or talk to someone who works in the industry to understand the pay in equal positions. It also means being confident when asking questions like “What would my bonus structure look like?”

Rule # 4. Invest in yourself & learn a new skill every year

Investing in yourself is the best investment you can make.

I have learned this the hard way, and I hope it helps you avoid the same mistakes I made.

When I was younger, I thought investing in myself was a waste of time and money as I didn’t need any new skills or education to succeed.

This was a big mistake on my part. However, it only cost me time, money, and opportunities later in life when it became necessary for me to learn new skills.

It’s never too late to start learning!

Rule # 5. Keep your money-saving goals in mind

“The key to success is to keep our goals in mind. If we do this, we can progress greatly towards our desired destination.” – William Feather.

You must set some goals for yourself to save money and get financial security.

Goals should be specific, measurable, achievable, realistic and timely (SMART).

You must prepare a plan to save a million dollars by turning 40. There can be several methods to achieve this goal, but first, you must set the goal and devise a sensible plan.

Rule # 6. Automate your finances and all other things

I automated most of my stuff related to finances and life. This helps me to focus my energy on valuable and exciting work.

Although it sounds like a lot of work, it will save you time and make you money in the long run. Here’s how:

  • Automate your savings. Set up automatic transfers from your checking account to your savings account, so you don’t have to think about it!
  • Automate your bills. Set up automatic payments for all your monthly expenses (like rent or mortgage, car payment, utilities) so that they are paid on time without having to write out a check or log into an app every month.
  • Automate investments. Set up automatic deposits from checking into an investment account.

Rule # 7. Be patient and persistent

If you want to be financially secure, it takes a lot of patience. Money-saving habits need selecting the correct path and the necessary tools and patience because it takes time to realize the real benefits.

Patience is not just a virtue but also a character trait, a way of being and living in the world.

It’s about having an open mind about what could happen and dealing with it when it does. The word “patience” comes from the Latin word “patient,” which means: “to bear or endure” or “to wait for.”

Being patient means having character because only people with strong moral values can stand up against adversity without getting angry or frustrated.

Rule # 8. Find more ways to generate more income

Just like with saving, there are many ways to generate more income.

You can start a side hustle or freelance gig. You can also create passive income streams by building an online business or selling your stuff on eBay and Amazon.

I’ve been fortunate enough to have been able to do all three things during my career. In addition, these income sources allowed me to save and invest as much money as possible while working full-time at my day job.

Rule # 9. Prioritize your health

Your health is an investment, and sometimes it can be one of the best money-saving rules you can have to achieve financial stability.

A healthy life will pay itself back many times over when you’re older and wiser (and in better shape). When you are healthy, you can effectively focus on your job and other work.

When you are healthy, especially in middle and older age, you can enjoy your life with the money you have saved.

So, it is time to get into the habit of eating well and exercising regularly.

Rule # 10. Ignore the neighbour

Suppose your neighbour buys a new car and puts it in the driveway. So what?

You know you don’t need another car, and that even if you did, it still wouldn’t be anywhere everyone can see it.

Or suppose your neighbour has a lovely house with many rooms and an expensive garden. That’s great for them, but there are no benefits to comparing yourself to them – unless you aspire to have precisely the same things.

If you follow these simple money-saving rules, you will have a secure financial future

  • To be financially secure, save 20% of your income. If you are not saving this money for yourself, then it is time for you to start.
  • Save money for a rainy-day fund. You never know what will happen in life. So, having the ability to pay off any unexpected expenses without having to borrow money from others will give you peace of mind.
  • Save money for holidays: Save a fixed amount every month for holidays. Keep a separate account for this.

The Bottom Line

In summary, following these simple money-saving rules will give you a secure financial future.

If you have any questions related to this article, please leave them in the comments below.

Forget the Norm: Follow These 10 Money-Saving Rules to Retire at Your 38