9. Step 4: Save and Invest

Create a savings and investing plan

Notice we included a line for savings on this expense worksheet. That’s what savings is—an expense. If you think of saving money as a regular monthly expense, you will be more likely to stick with a savings plan. In fact, we will keep stressing that “You should pay yourself first” when paying bills. But notice, Henry didn’t “spend” anything for savings!

So, If Henry wants to achieve his three top priorities—buy a coat, buy a sound system, and start college—he must plug $384 into his “savings” expense records. When he does, the deficit between income and expenses goes up to $454 a month.
 

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OK, you got me—I give up. Obviously I don’t make enough money to protect myself and buy the things I want. I already spend every cent I make and there’s nothing extra there. I’m just too poor to get ahead.