The first golden rule of personal finance is to spend less then you make. As elementary as this may seem, there are many people who live paycheck to paycheck and can’t accomplish this goal. This is the important first step to breaking that paycheck to paycheck mentality. Spending less then you make is the basic building block to enable you to accomplish your goals weather it is building an emergency fund, saving up for a large purchase, or funding a retirement plan. All of these goals are started by spending less then you make so you can have money available to fund these plans.
A great way to start is to pay yourself first. I would recommend opening a new savings account, preferably with a higher interest rate, and putting a little money into that account with every paycheck you receive. If you continually do this you will get accustomed to living off a smaller amount and you won’t have the cash burning a hole in your pockets waiting to get spent. In addition to getting used to living on less money this will lead to creating a savings fund that can be used as an emergency fund or to save up for large purchases instead of using credit.
This is a way to help build wealth and if used the money you save will in turn make you additional money from interest. It will also help keep you out of the dangerous spiral of debt which so many people are getting sucked into these days. Spending less then you earn and paying yourself first are the first two steps toward financial success and independence.