Hi there,
I’ve been thinking a lot about what separates those who just “get by” from those who truly build wealth.
I believe it’s not just about earning more, but about managing what you have wisely.
Let me share with you the 70/30 Money Rule, a simple yet powerful framework that’s been a game changer for many of the most successful people I know.
70% for Your Life:
Use 70% of your income to cover all your needs and even a bit of fun. This isn’t about scrimping on enjoyment, it’s about living within your means, covering essentials like housing, bills, and food while also treating yourself occasionally without guilt.
30% for Building Wealth:
The other 30% isn’t just parked in a savings account. It’s actively deployed to grow your future. Whether it’s padding your emergency fund, investing in stocks or real estate, or paying down high-interest debt, this money is working for you, every single day.
Many people end up living paycheck to paycheck, spending 100% (or more) of what they earn, often relying on debt to fill the gaps. This approach keeps you trapped in a cycle of “working for money” instead of letting money work for you. By consciously splitting your income, prioritising both your present comfort and future security, you’re setting the stage for real financial freedom.
Audit Your Spending:
Begin by tracking your expenses. See where you’re spending most of your money, then trim back gradually, aiming to keep your lifestyle expenses around 70% of your income. Small, consistent cuts can add up.
Automate Your Savings and Investments:
Make the 30% allocation automatic. Set up transfers to a high-yield savings account or investment portfolio. This way, you never miss the chance to let your money work harder for you.
Invest in Yourself and Your Future:
Whether that means building an emergency fund, investing in assets, or even paying off costly debt, each step moves you closer to financial security. Remember: wealth isn’t built overnight, it’s a steady process of smart, intentional moves.
I recently read The Psychology of Money by Morgan Housel, and it struck me how much of financial success comes down to the way we think about money. It’s not just the numbers, it’s our habits, our mindset, and our willingness to prioritise long-term goals over immediate gratification.
Building wealth isn’t just about knowing what to do, it’s about mastering how you think about money. Understanding human behaviour around finance can help you make smarter, more sustainable wealth-building choices.
Financial success is not a hard science. It’s a soft skill where how you behave is more important than what you know.
– Morgan Housel
Adopting the 70/30 Money Rule isn’t about deprivation; it’s about intentionality. It’s about creating a balance where you enjoy life today while laying a solid foundation for tomorrow. It might take a bit of discipline at first, but once you get into the groove, you’ll notice how empowering it feels to have control over your financial destiny.
Here’s to making smarter decisions and turning your money into a true ally in building the life you want.
To your unstoppable success!
Luke
Writer, The Success Method
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