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"Wealth Building 101 Part 2: Saving"

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In the first part of this article series, we have discussed the first step of building your wealth: earning the money itself. However, we will further discuss that the larger part of building wealth is not how much you earn, but rather how you spend it, how you save, most importantly, where and how you invest your money.

Contrary to popular belief, saving and investing are not two contradicting things, but rather are better suited to support each other.

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In this part of the article series, we will focus on how to saving enough money, and how to use your saving properly to build your wealth.

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Step 2: Saving Money

You may earn enough money, and you make a decent living off it. However, you never seem to be able to save, or simply can't save enough.

Are you the only one with this problem? Not at all, only less than 5% Americans can make a decent saving off their earning. Even more surprisingly, it's not only affecting the low-income people but also high-income individuals with over $150,000 annual earning.

Why did this phenomenon happen to so many people? With only one reason: most people neglect the importance of having a budget, either by spending outside their budget, or not having any budget plan at all.

Here is some of what you can do to develop a budget or keep your existing budget on track:

- Set a Target

Your short-term saving goal is to build a saving around at least three to six months of your living expenses. This is what famously deemed as emergency funds.

Not only an emergency fund can help you during a job loss, health problems, or any unwanted accidents, it will also act as a cushion when you're deciding to invest your money somewhere.

After you successfully build your emergency fund, you can move on onto bigger, long-term targets like saving to buy a house, to build a business capital or any others.

- Track Your Spending

A Huge chunk of the point of setting a budget is to track your spending. By tracking your spending and categorizing them in detail, you can control your spending habits, and save more in areas where you're overspending on things.

- Trimming

Find ways to save more money by spending less on less important expenses. For example, bringing your own lunch to work can save 'unnecessary' lunch expenses.

The most important thing to consider in following a budget, and ultimately building a saving, is to distinguish between what you need and what you want.

Check out or previous articles on how to save more money, ranging from creating a budgeting plan to saving more money by saving energy. Set up a reward system for yourself when your saving goals and milestones are accomplished. Yes, you can reward yourself a nice dinner or a shopping spree once in a while in an appropriate amount.

In fact, rewarding yourself by setting up goals can motivate you better in both earning and saving your money. Stay tuned for the part three for how to invest your money in building appropriate wealth.