Important Financial Rules
The vast majority of people are financially illiterate. This is used by interested individuals from the top, banks, credit organizations, scammers, sellers, and other dishonest people. In this article, we will look at 5 effective financial rules that will help you in your life every day.
1. Spend less than you get
If there is a key fundamental rule of financial management, this is it: your expenses must be less than your income. You must follow this rule, otherwise, your whole future life is called into question.
2. Simplify your financial life
The more loans and credit cards, the greater the chance of not noticing the loss of funds or missing the next payment. The more deposits and accounts, the more difficult it is to keep track of them and the easier it is not to have time to react to emerging problems. The more complex your financial life, the more time and effort it takes. Along with this, the chance of getting confused and making a financial mistake increases.
3. Never let the “future self” control the situation in the present
Do you want to buy something that you cannot afford now because in the future you will receive more and easily pay off your debts? You will most likely regret this decision for a very long time, because your “future self” may receive the same or even less, or even lose his job.
Even if your financial situation improves in the future, there will be other expenses that will not be so easy to deal with without the mistakes of the past.
4. Start the path to sound financial management
Step 1: Create a cash reserve for emergencies. Cash is still needed and solves unforeseen problems quickly, on the spot, without trips to the bank, without fiddling with bank cards and service problems. It is very easy to start creating a reserve. Start saving a certain percentage of your income each month. For example, 10%. Or 15%. This is in full accordance with the first rule of financial management, and in a year you will be able to enjoy a decent amount of accumulated money that will help you out in an emergency. In the future, part of the accumulated funds can be transferred to a deposit or put into the business.
Step 2: Get rid of the highest interest debt. Sort your debts by debt growth, select the one with the highest interest, and then start paying off this debt twice as fast, that is, in double payments. Do this monthly until the debt is paid off. Then add the entire amount of money released, which was spent on repayment, to the payment of the second debt, until that one is also paid off. And so for all subsequent debts.
Step 3: Once you have a contingency stash and your debts are closed, you can start thinking about retirement. It can be a bank account, investments, and any other ways to save and increase capital.
5. Create a budget, just do it right
A budget is the best means of controlling and planning finances, but only if it is done in the right way. In addition, the budget can always be increased – for example, play in a casino using PlayAmo login.
How does a smart person plan a budget? It does this based on spending statistics from previous months. That is, you can fantasize and say to yourself: “So, well, I will spend as much on food, and no more.” But then the harsh reality will come and put everything in its place. It is better to rely not on assumptions, but on real spending statistics.