# When you master your spending, you master life

> A four-way split for every rupee you earn, borrowed from the Rigveda, and the budgeting habit that separates a happy life from a frustrated one.

- Author: Rajesh Namase
- Published: 2015-02-11
- Category: Money
- Canonical: https://namase.com/journal/master-your-spending

---
When you master your spending, you master life. Bill Gates, Larry Page and Warren Buffett are very careful/stingy spenders and that is how they were able to build highly respectable organizations. So, better get started in understanding the way to master your spending.

Split your income in 4 parts*. Let's assume your income is X.

1. One part goes into your expenses that meet basic needs (i.e. unavoidable cost). So your expenses are X/4.

2. One part goes in savings. So your savings is X/4.

3. One part goes to your parents or establishment costs e.g. you want to buy a car or pay off some loan, yearly trip, eating out, movies etc. So your family contribution is X/4.

4. One part goes in investment, risks, ventures. So your growth proposition is X/4.

How to spend your income = Basic needs + Savings + Contribution/Entertainment/Establishments + Investment

Explanation of 3rd category: Now start prioritizing the things according to your needs. What should come first for you? If you have $10 would you go to the restaurant or buy a book? Then you have a priority list and based on that you would have money allocated for each category.

If a new purchase [product cost plus all the periodical payments to keep it] would make you go over the limits, then you have to say that I cannot afford it. If you build the discipline to say "I cannot afford it" to something you like, you will have a high chance of running a happy life. If not, you will join the billions of people in the living hell.

TL;DR

You setup your budget and constantly compare the various things to that budget. You do it based on your priorities. We have infinite wants, but only finite resources. The other half of this is [earning more rather than spending less](/journal/earn-more-than-you-spend/).

*This principle has been lifted from Rigveda.