Do you have a stable source of cash every month aside from your job?
If you are like most of us, you probably don’t have cash-generating assets yet.
That’s okay, friend! If we keep on striving, we’ll acquire these additional sources of income on top of our earned income in the near future.
So while we still don’t have that much-coveted secondary source of income–from rental properties, franchise profit, stock dividends and the like–yet, we might just as well decide and strive to lower our living expenses and cut off unnecessary luxuries we may have.
Then, treat the amount of excess cash we had gleaned and accumulated as our: “Saved Income“.
Okay, I’m not sure if there’s such a financial term called “Saved Income”, but for the sake of posterity, let’s coin this term as:
The difference of the previous monthly living expenses budget less the actual cash spent in the current month.
Saved Income = Monthly Budget – Actual Expenses
Say, your budget last August was $1,000:
- Rent: $ 600
- Transpo: $ 100
- Food: $ 200
- Entertainment: $ 100
This September, you decided to move to a much cheaper room; cut off excessive parties, movies and gimik expenses and cook your own food instead of eating out.
At the end of the month, the actual amount of your living expenses will be:
- Rent: $ 350
- Transpo: $ 100
- Food: $ 100
- Entertainment: $ 50
- TOTAL: $ 600
To calculate your Saved Income:
= Monthly Budget – Actual Expenses
= $1,000 – $600
That’s equivalent to a 3-digit monthly income ( $400) or worth P 13,480 cash back at home.
$ 400! = P 13,480 !
Where can you earn that amount of money these days? (If you know where, don’t forget to drop me an email 😉 )
Again, I just coined this terminology and definition for this article so feel free to share your two cents on this, and I hope you get the drift.
There you have it! While waiting for the monetary fruits of our businesses, properties and investments of the future, let’s decide to earn that “Saved Income” as an alternative, this very day. Just as the old adage goes: “A penny saved is a penny earned.”
Remember, every Sing Dollar you save is equivalent to around P33 back home.
Not Bad right? 😉