7 Financial Tips
Some tips to use your money in the right way.
1. Watch your expenses
Money, as water, as its “liquidity”. Therefore, make sure that you know “the flows of your money”. You should keep in mind the amount of your income and the direction of the main expenditure. It is worth not only keeping records of your income and expenses, but also looking at assets (property, investments, savings, etc.) and liabilities (loans, debts). Then the financial aspect of your life will be clear.
2. Plan a budget and long-term purchases
In addition to controlling cash flows, it makes sense to plan personal finances. A budget is a plan of your income and expenses for a month, quarter or year made in advance. It should also include savings for long-term purchases (everything that you cannot afford with your monthly income). In this way, there will be no need in taking a loan for a new smartphone or for apartment renovation.
3. Use only your own money
Consumer loans and credit cards are great provocateurs to force us buying more. The habit of relying on borrowed money means that you cannot take responsibility for your life. Getting a loan is easier than saving the same amount of money. It is much more useful to build in the habit of using only what you have earned. Additionally, it will help you to leave not the family debts but family capital as the inheritance for children.
4. Go to the store with a list
It is no secret that modern stores are designed to make us buy more. This is beneficial to the seller, not the buyer. The list of necessary purchases that you will take to the store will fulfill the role of a magic scroll with spells and drive away of unreasonable consumption. As a result, you will spend less and buy only what you need.
5. Make seasonal purchases
When buying gifts just before the holidays, we often overpay more than 2 times for the same things bought in advance. The habit of doing everything at the last moment always costs us a fortune. It can be compared to the situation when we try to finish a burning project before the deadline. Overall, we lose money by buying New Year's gifts on December 29th. However, it is enough just to make a list of gifts for the year and buy them gradually.
6. Save regularly
Experts in finance say that every household should have a “financial airbag”, equaled to 3-6 months amount of expenditure, depending on the number of the income sources. It is impossible to predict the future economic situation; as a result, it is worth saving some of the money for the future. Furthermore, the goals of your savings may differ: children education, relocation, or secure passive retirement income. It is noteworthy to mention that the sooner you start making savings, the more you will save for the future.
7. Improve financial literacy
No matter how much money you have, it requires respect and your ability to use it consciously. Whether you have a little to cover your everyday expenses or you can afford luxuries, is important to improve your financial intelligence. To increase the level of your financial culture you should read the appropriate books or take a training course as the high level of financial knowledge in contemporary world is crucial.
Text by
Maria Grigorieva