Many do not even try to put aside savings, referring to small income. Meanwhile, the secret to success in personal finance management lies in the ability to control your spending. Experts advise how to achieve it.
Your personal capital is more important than how much you earn: having a high salary will not automatically make you rich, and a low salary will not automatically make you poor. The only thing that matters is what percentage of your income you save.
“Pay yourself first” is very simple advice, but very few people follow it. The best investment decision you can make is to allocate a high percentage of your income to savings, which will give you a greater guarantee of stability in your life.
Try to avoid credit card debt.
The only way to get ahead financially is to spend less than your income level allows.
Invest around 10% of your capital, preferring long-term investments.
Probably the biggest expense of your life will be mortgage interest payments, car loans, student or consumer loans, etc. With a good credit history, you can save tens of thousands of dollars by lowering your borrowing costs. So use credit cards, but pay the balance in full each month.
Only by understanding your habits can you gain control of your finances. The goal is to spend money on the things you care about, but skimp on everything else.
The best way to save more, avoid late fees, and make your life easier is to automate as much of your financial life as possible.
I don't like to call it a "rainy day" account, because you must plan for the recurrence of most types of force majeure periodically. You must have liquid assets to handle the situation when life inevitably trips you up.
This is a great way to protect your assets.
The trick is to increase your savings percentage every time you get a raise so you don't even realize you have more money to spare.
Psychologist Robert Cialdini has written extensively on the concept of social acceptance and how we mirror other people's actions to gain their acceptance. In an attempt to keep up with spendthrift acquaintances or neighbors, we may find ourselves drawn into an endless game in which there are no real winners.
After 5 minutes, every conversation I hear revolves around politics, but personal finance is still a taboo subject for some reason. Discuss them with your spouse. Ask for outside advice. Don't let financial problems drag on and get worse.
Thanks to "retail therapy" we get a dose of dopamine, the hormone of pleasure, but its effect is always short-term.
If you find them deadly boring, at least scroll through a few and select the best tips from various sources to try them out for yourself. Financial education should start at school, but often we are alone and we must take the initiative.