Online Finance Tips

Do you ever think about Why the Rich Get Richer? It’s not about how much they earn or what their profession is, it’s simply about how they invest, save and manage it. We believe earning a lot of money is the only way to be financially free.

But here’s a secret: Some simple money saving rules which are followed by the rich class. In this Article, we’ll discuss 5 Rules every rich person uses to save money.

The Hidden Secret : Why the Rich Get Richer?

Rule 1: Pay Yourself First

Where common people make mistakes is, as soon as they get their salaries they start spending it and save the money they are left with. The rich do the opposite they save first and spend later. This is called the “Pay Yourself First” rule.

How it Implement

• The moment you get your income, deposit your fixed percentage of money into a savings or investment account.
• Treat this like an important expenditure of every month.
• Turn-on automatic payment of banking apps or SIP.

Real-life example : Komal earns ₹40,000 a month. Before paying bills, he transfers ₹8,000 into a mutual fund SIP. Over 10 years, this small habit could give him ₹15–18 lakhs, depending on return rates.

Action Tip

• Start with as low as you are comfortable with and then increase it by the time.
• Open a separate savings account and deposit your saved money there.

Rule 2: Spend According To Your Income

If your income is ₹50,000, you should spend ₹40,000, not  ₹60,000.

Use 50-30-20 Budget Rule

• Use 50% of your income for necessities
• Spend 30% for shopping, entertainment, etc.
• Deposit 20% in your savings account.

Real-life example : If you earn ₹30,000, spend ₹15,000 on needs, ₹9,000 on wants and ₹6,000 on saving.

Action Tip

• Start monitoring your expenses from now for 1 month and note down your unnecessary spendings.
• Stop taking unnecessary subscriptions of OTT Apps. Try to save more money.

Rule 3: Avoid Bad Debt

Rich people don’t avoid debt completely, they just know how to use it properly.

What is Bad Debt?

The money you take on loan for things that depreciate in value over time.

• Credit card shopping for gadgets
• Personal loans for vacations
• Car EMIs beyond your budget

What is Good Debt?

Good debt is when you take loan to grow your money or business .

1. Education Loans – which help you to build your future.
2. Business Loans for profitable ideas
3. Home Loans – which rise in value.

Comparison Table: Good Debt vs Bad Debt

Action Tip

• Use credit cards only if you are able to pay bills.
• Don’t take loan for things whose value decreases by the time.

Rule 4: Let your Money grow

Saving money in a bank account is not a good choice, start investing to beat inflation.

Some Good Investment Options :

• Stocks & Mutual Funds Investment : Will give you  Long-term returns (12–15%)
• Gold Investment : Safest and most secure option.
• Real Estate Investment : Provides rental income and rising value of properties.
• Retirement Funds Investment : Tax benefits + future wealth

Real-life example : If you invest ₹5,000 monthly in an equity SIP that gives 12% annual returns, in 20 years you’ll have nearly ₹50 lakhs. That’s the power of compounding.

Rule 5: Protect Your Wealth

Your savings will be meaningless if you don’t plan to protect your wealth, Do it with smart planning.

2 Things that everyone needs to protect their wealth

Emergency Fund

• Analyze your spending of the last 6 months, stop unimportant expenses, invest it in an Emergency Fund.

Insurance

• Health Insurance: It will give you security from Medical Emergency.
• Term Life Insurance: Protects your family. If any misfortune happens to you.

Action Tip

• Before starting investment, build an emergency fund for your financial security.
• Secondly, buy insurance for your family’s wellbeing.

FAQs

Q1:  Can I save money with low income?

Ans: It would be difficult at first but if you start with a small amount and stay consistent, it will become easy.

Q2: Do I need to cut back on my enjoyment to save money?

Ans: No! You don’t need to do so, you just have to be economical. First save, then spend.

Q3: Which is better – Investing or saving?

Ans: Investing money is a better option because a Bank gives you 3–4% return but Investments like stocks or funds will provide you high profits.

Q4: Do these rules are helpful for students?

Ans: Absolutely! Even saving ₹500 a month is a good start. It builds the habit early.

Conclusion:-

The rich are not those who earn well but are those who know how to use and invest their money. They follow these 5 timeless money-saving rules:

1. Pay yourself first
2. Spend according to your income.
3. Avoid Bad Debt and take Good Debt.
4. Start investing your money in funds and stocks to secure your future. 
5. Protect Your Wealth

You need to start managing your money to be financially independent in future. Start with a little amount of money today and see yourself growing. Choose any rule given above and start following form this month and see the massive change in your life.