Wealth Tip: Build wealth by spending less than you earn

Building wealth is not only about how much money you earn. It is also about how much you keep after paying your bills. This is known as creating a margin. For example, if you earn N$15 000 a month and spend N$12 000 on rent, food, transport, debt repayments and other expenses, you have N$3 000 left. That money can be used to build an emergency fund, pay off expensive debt or invest for the future. But if your monthly expenses are N$17 000, you are short by N$2 000.

You may have to borrow money, use a credit card or rely on family and friends to get through the month. The difference is important. Earning more does not necessarily mean building wealth if spending continues to rise alongside income. Wealth is not determined by your salary alone. What matters is how much you keep, what you do with it and how consistently you follow your plan. ‘Stop Living Paycheck to Paycheck’ author Anthony O’Neal says the key to getting ahead financially is creating a gap between income and expenses, then using that money to save and invest. O’Neal says…