The 4321 method of saving money

Piggy Banks are obsolete and the method isn’t advised by financial analysts.

Boys loved to boast something like newly bought sports car or limited edition shoes and to some degree boast even their salaries. Most of my colleagues share their incomes to each other from time to time and how much they have on their savings, I kept silent most of the time when they talked about it not because I don’t have the values as equal as them but I am embarrass to let them know how much I have.

Due to the fact that I can’t avoid being asked, I just tell them the amount and they’re impressions were shocked knowing that I saved more than what they have. So they asked me, do you have any transactions aside from your job? Or how do save your money. I and my colleagues both buy things we need and I spent money the same way they do.

I just save a lot that’s all. But this is no secret when a close friend of mine asked me about saving technique, and I told him the “4, 3, 2 and 1” method of saving money. This method was taught to me since high school by our school guard and until now I find it very effective.

  photo 4321_zpsba1v8maf.png

You might want to ask, so what are these digits? And how do they work?

It’s simple, just add zero at the end of each number, and it will end up being 40 followed by 30 then 20 and finally 10. If you add them up you will get a sum of 100. See?

  • 4 [Four]: That should be 40% of your income, It should be kept in your savings [Don’t you ever touch this, EVER. How about emergencies? We will talk about it later.]
  • 3 [Three]: 30% will go to you of course, the sweat and blood of your efforts. This will be your pocket money, if you’d like to watch a movie, date someone, and buy new clothes or if you want to buy something.
  • 2 [Two]: 20% shall be spent on your personal necessities like toiletries, personal hygiene and if you are renting a room this should help.
  • 1 [One]: and finally the 10% this time will be saved for emergency fund. We can never tell when we’re going to get sick or any of our family members. It’s better to have this than to have nothing at all.

Few notes to consider:

  • If you touch one number just to supplement the other will ruin everything, and that 40% shouldn’t be touched.
  • If you don’t have anything to buy on your 20% that should be added to your 40%. No personal things to buy? Add it to your 40%, Simple.
  • It’s better to have a separate account for your emergency funds.
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Author: blogginghands

Creative, Fun, Jolly, Comedian, Serious, Art, Design, Logos, Programming, Swimming, Taekwondo, Soccer, UFC, Perfumes, Shades, Mountaineering, Scouting and Survival Skills.

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