The Philosophy of ‘Income – Savings = Expenses’

It is a mere fact that earning money is not easy, but the simplest and easiest thing to do is to spend.

Lots of people tend to follow the age-old equation “INCOME – EXPENSES = SAVINGS.” Wherein the amount left with you after paying for your monthly cost of living goes into savings. People always save out of surplus income.

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Anyways, here’s a question: What do you think about these mathematical equations below? Do you see any difference between these 2 ‘similar’ equations?

equation 1: INCOME – SAVINGS = EXPENSES

equation 2: INCOME – EXPENSES = SAVINGS

And the answer is: Which is a priority – TO SPEND or TO SAVE?

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If your priority is to spend first, follow equation 2 and only to save what’s left.

If your priority is to save first, follow equation 1 and only spend what’s left.

If you want to become wealthy, follow ‘INCOME – SAVINGS = EXPENSES.’ Make saving and investing your priority. Develop the discipline to save first before spending; if you spend first before saving, there will be nothing left over to save after all the expenses.

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