Part of All You Earn Is Yours To Keep

Part of All You Earn is Yours to Keep!

Posted on October 2, 2008
Filed Under budget, emergency fund |

The absolute first thing that came to mind when I read this in “The Richest Man in Babylon” was DUH! All of what I earn is mine. Ah, but as George Clason points out in the book, do you keep a part of all you earn? The answer for many of us is no. We give it to the oil companies, the grocery store, the clothing store, the auto manufacturers, etc. At the end of the month, how much do you have left to keep?

I first heard of the Richest Man in Babylon on a conference call with a very successful entrepreneur. He was asked what books had had the greatest influence on him. He didn’t even have to think about it. He told us that when he got out of school, he was unemployed and broke. He read this book and it changed his life. He started a gym in his garage, made his own equipment or bought it used and started saving. At this point in his life, he owns several health clubs, vacation retreats as well as several other businesses.

Keeping a part of what you earn is first illustrated in the book when a chariot maker decides that he wants to learn what it takes to be rich. He goes to a wealthy friend and asks what the secret to wealth is. The friend tells him that the first secret is to keep a part of what you earn.

In the course of the book, Clason reiterates this several times. When the wealthiest man in Babylon is asked to teach others his secrets, he goes around the room asking if anyone has money left over at the end of the month. No one does and he points out that there are all income levels there so saving does not depend on the amount of income. He challenges them all to save 10% of what they earn and to find a way to live on 90% of their income.

I have found that if I pay myself first by putting a set amount of money into savings, I can save. However, no matter how tightly I budget, if I don’t put that amount of money away first, at the end of the month there is nothing left to save.

I have tried setting savings goals and I can meet them some months. I have snowflaked money away into my emergency fund and built it up fairly quickly but as soon as my focus changed to a different bill, the savings account stopped growing.

My current plan is to follow the advice in The Richest Man in Babylon and to put 10% of my income into savings before I pay a single bill or even buy groceries. My emergency fund was decimated when Capital One froze my bank account and I need to build it back up.

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Comments

One Response to “Part of All You Earn is Yours to Keep!”

bouncing betty on October 9th, 2008 1:33 pm

I set up an auto transfer between my main checking account and my ING account, I also have my payroll department do a direct deposit to my E-fund. It’s not a lot of money, but you are so correct. No matter how I budget or try to control spending, if I don’t take it out NOW it gets spent LATER and never makes it to my savings account.

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