The Savings Law and 7 Key Savings Accounts from Money is my Friend by Phil Laut

Today I’m inspired to write about The Savings Law and 7 Key Savings Accounts from the book Money is My Friend by Phil Laut.

Savings is one of the most hotly argued about topics these days.

I just heard Robert Kiyosaki saying savings is losing money because the government keeps printing money.

Then I read Dr. John DeMartini’s book on How to Make One Hell of a Profit and Still Get to Heaven and he’s saying savings is important because it builds emotional stability (it’s nice to have a chunk of money growing, that also makes interest…and doesn’t fluctuate with the market).

T Harv Eker and George Clason recommend saving at least 10% of everything for yourself (pay yourself first).

Phil Laut recommends not only savings, he’s figured out 7 Key Savings Accounts that we should have.

In this blog, we are going to go over the Savings Law and then the 7 Key Savings accounts he recommends.

The Savings Law

“The Savings Law is the accumulation of a surplus from your income.

Application of the savings law involves saving a percentage of your income. This habit produces an attitude of extra, of abundance, which you can expect to see reflected in your future income.” (p/ xii)

Savings is NOT getting a discount when buying an item on sale.

Savings is NOT cashing out your credit card points.

Savings is setting money aside that you make for the a specific future purpose.

The 7 Key Savings Accounts

Not only does Phil Laut have The Savings Law, he also recommends the following 7 savings accounts!

There’s a brilliant reason for each so be sure to study them carefully and adopt the ones that work for you!

1. Cash Flow Savings Account

The Cash Flow Savings Account is where you would deposit all of your income first (instead of putting it in your checking account).

Then you just transfer out the money that you need for your expenses from this account.

Always take out less than what you put in.

In this way, the account will grow until you have a whole month’s of expenses saved up in this account.

When that happens, you can transfer that month of expenses into your checking account before your expenses are due, and finally feel what it’s like to have all the money you need to pay your bills for the month before you even get paid!

2. Large Purchases Savings Account

The Large Purchases Savings Account is where you save money to buy something.

The goal is to always empty out this account as you use it to buy things.

Most people who have a savings account use it like this, however, they don’t designate the account for spending. So when they do spend, they feel guilty that they had to use their savings.

This account will help your relieve all that guilt you have about savings, since the whole point of the account is to use it to buy large purchases that you are not able to afford upfront.

The habit of saving up to buy instead of borrowing first to buy and paying it back later will do the following:

–Create a calm in your mind as you don’t have to keep track of your loan payments

–Save you money in interest.

–Eliminate impulse buying.

3. Financial Independence Savings Account

The purpose of the Financial Independence Savings Account is to save money and live off of the interest.

When the interest paid out from this account covers all of your expenses, then you are financially independent!

It’s important to pay yourself the interest you generate out of this account, no matter how small.

Also, you never spend the money that you put in.

4. Millionaire’s Savings Account

The money that you save into the Millionaire’s Savings Account is for investing.

The money is never spent, though the profits of the account can be taken out for spending.

Use this account to become a Millionaire.

5. Annual Income Savings Account

This savings account is to save up one year of your income.

It’s to help you take paid time off.

A lot of self employed people never take time off because if they stop working their income stops.

Use this account to pay you for any time that you take off from your business!

6. Taxes Savings Account

This account is to save money so you can pay your taxes.

7. Generosity Savings Account

The Generosity Savings account is so that you can give people large cash gifts!

This will exercise your brain to give without conditions, because they can spend the cash on whatever they choose.

Also, it will allow us to practice how to give to people who already have enough money. This will help us feel better about having more money than we need (being wealthy).

Conclusion

These 7 Key Savings accounts really opened my eyes to the power of savings.

Each one has it’s own characteristics and they are all fun to do (except maybe the taxes savings account).

What are your thoughts?

Let me know in the comments below and be sure to share this blog on your social media and with your friends and followers!