Saving: The Ten Percent Rule

Ten Percent Rule? Is that all? Yet according to a CNN report in 2021, 76% of Americans are living paycheck to paycheck. In the book, The Richest Man in Babylon, George S. Clauson, wrote “A part of all you earn is mine to keep.” It makes sense. Why work 40–60 hours per week only to give it away to the government, bills, debts, and basic survival needs? Why not pay yourself first?

Pay Yourself First

Look at your paycheck. A lot of people get paid before you. Federal, state, medicare, social security, disability, and not to mention if you have any garnishments and liens. A lot of hands-on your money. Most people don’t pay attention to their gross income and only focus on the net. With that net, your credit cards, loans, family, and staff want your money. A vicious cycle that keeps people broke.

10% is the minimum you should pay yourself before you pay anyone else. Some financial advisors recommend saving 15% to 20% of your income. Build wealth now so you will not retire broke and have to go be a greeter at Walmart.

It amazes me how simple the Ten PerCent Rule is and people are unwilling to use it. Saving is not a priority. Excuses abound on why they can’t do it. “I don’t make enough money.”, “It’s too hard now.”, “I have bills.” Everyone has the same problem. Those who choose to build wealth will be financially secure in the future.

It took me years to adopt the 10% rule even though I read all the books on building wealth. I would save for a while…