The Law of Saving


The Law of Saving states that: “Financial freedom comes to people who save 10 percent or more of their income throughout their lifetime.”

The importance of saving money is rarely disputed - saving provides financial security, it helps you build cash reserves so you can take calculated risks with less worry, it gives you the freedom to live life on your own terms, etc. Saving is one of the basic foundations of personal finance, but despite its importance, many of us aren’t doing it. One of the smartest things that you can ever do for yourself is to develop the habit of consistently saving part of your income, every single month.

I grew up hearing these wise words from my mother: “Don't eat with all your ten fingers, always save for rainy days”. And I've lived with these words all my life. No matter how small my income is, I've always saved something. Also, no matter how substantial my expenses are, I've always saved something. Saving money has become a habit for me. A habit is something that you do often and regularly, sometimes without even knowing that you are doing it.

Every time you spend money, you are making a decision - every penny spent is a choice. The same applies to saving, every penny saved is a choice. On average, it is advised to build emergency savings that can cover all your living expenses for at least 3 months and as much as 6 months. Once emergency savings is done, you can then start saving money in a tax-advantaged investment account. That’s where the compound interest magic starts to happen. Investing is taking saving a step further; saving is the starting point of investing.

I encourage you to prioritise saving your money. Start small. Save as often as you can. Start with an amount you can commit to monthly, then gradually add more as you get comfortable. For some people, saving money involves a lot of effort. But I can assure you that, the conscious decision to get into the habit of saving is worth every effort. Most wealthy people got there through a combination of hard work, smart savings, and investment decisions.

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Categories: Financial Planning
Oyenike Adetoye

About Nike

Oyenike Adetoye (aka Nike) is an impactful speaker, author, and personal finance expert. A Chartered Management Accountant by profession. Nike is the founder and CEO of LifTED Finance, a private financial firm that educates, coaches and supports people on their journey through financial fitness and wealth management.