The Richest Man in Babylon

The foundational lesson in The Richest Man in Babylon is the directive to “pay yourself first” by saving at least 10% of your earnings before allocating funds to other expenses. This concept, repeated across several parables, encourages readers to prioritize long-term financial stability over short-term gratification. Implementing this principle can be straightforward: Set up an automatic deposit from your paycheck into a high-yield savings account or retirement fund. The emphasis on consistency over the raw amount saved makes this rule accessible at a range of income levels. For example, individuals using the 50/30/20 budgeting model popularized by US Senator Elizabeth Warren already set aside 20% for savings and debt repayment, echoing Clason’s recommendation. By creating a non-negotiable savings habit, individuals build a cushion that can lead to investment opportunities, reduced debt reliance, and financial autonomy.

Clason stresses the importance of financial self-awareness, urging readers to track their spending and distinguish between essential and discretionary expenses. In his parable “Seven Cures for a Lean Purse,” Arkad (the parable’s fictional protagonist) warns students against confusing desires with necessities. This parable is analogous to modern-day budgeting apps like You Need a Budget (YNAB) or Mint, which help users visualize spending habits and cut back on non-essentials.