Probably one of the most useful financial concepts I’ve ever learned.
Just like work expands to fill the available time for its completion, money spent expands to (and sometimes exceeds) the funds available for use. This, to me, is one of the big reasons why it’s so hard to save or invest.
The solution is simple: decide, in advance, a percentage of your income to set aside for saving and/or investing. That number should only as large as you can feel you can commit to. If that’s only 5%, then you’re in for 5%.
When your paycheck arrives, the money according to your committed percentage is immediately moved into a separate account designated for your financial growth. There’s no debate on whether it will happen, because you already decided it will. Often online banking includes a feature for automatic transfers. Use them, instead of relying on your memory and willpower.
Once you’ve paid yourself, there are funds left. Now you can take care of your bills, go shopping, have fun, etc.
A big part of creating financial freedom is optimizing the money you save or invest. But before that’s a possibility, you have to figure out that crucial first step accumulating the capital to work with. This system has worked pretty well for me.