Today we are going to talk about one of Warren Buffett’s famous quotes, “Don’t save what is left after spending; spend what is left after saving”. Warren Buffett as many of you might know, is the most successful investor and obviously one of the wealthiest persons in the world!
According to Warren Buffett, one must first save a certain amount of money from their income before they start spending that money. It is not right to save what is left of your income after you spend money first. Though this might sound like too simple, most people do not consider this golden rule while they save. People just feel satisfied that they do save some money and find no problem with whether you save first or last.
Even people with enough monthly income budget their needs and then keep the rest as savings. But, the right way is to first figure out or at least have a certain fixed amount for how much you want to save and then budget the rest of the money for your needs. You can then spend the remaining money on other things.
To make it easy and simple, you can consider saving certain amount of money from your income as paying for yourself. In this way, you will prioritize saving money first. Now savings will be kind of the monthly bill that you pay for yourself, for your future.
Spending money is like having a dessert; how much tempting and tasty it might be you should avoid having it before having a healthy meal. If you have the dessert first, you might not be able to resist the urge to have more of it and thus will not be able to eat your meal properly. Savings is like your healthy meal. So, to keep your financial body healthy and happy, you should first save a certain amount from your monthly income (healthy meal) and then spend the rest of the money for the present satisfaction (dessert). When you start by spending your income for the present without saving it first for the future, your financial body health will suffer.
This is what the genius Warren Buffett has conveyed in a single line as “Don’t save what is left after spending; spend what is left after saving”.