Although we wrote an extensive article with 15 points of vital importance to improve our finances, we decided to simplify the message this time. When it comes, many factors do not teach us anywhere about savings and the creation of wealth; many factors are earned from financial education, and for that, we can only do it in two ways:
Learning on our own, and it is necessary to have a prior interest in learning. Often, we acquire this interest in finance when we have run into economic problems or when our financial situation has changed from “needs improvement” to “urgency.”
We are learning from the experts. And, in a way, we need a prior interest in listening to what these experts have to say and apply.
Procrastination for big purchases
While procrastination (leaving things for later) is the enemy of success, procrastination when making a purchase is excellent when we talk about finance.
To avoid becoming a compulsive buyer or spending money on whims, delay the purchase a few days. In this way, your brain will start to think cold, and you will probably conclude that you do not need what you will buy. Or maybe you need it, but it’s not that expensive a model.
Use a budget with the 20-30-50 rule
As we always advise, first, we must pay ourselves. It means that at least 20% of our income must be destined to be saved, whether we are talking about an emergency fund or a savings or investment account.
50% should be used for non-discretionary expenses, such as food, housing, electricity, water, etc. 30% we could have for discretionary expenditures, such as leisure and entertainment; however, if we invest the rule and allocate 30% for savings and 20% for those discretionary expenses, much better.
Spending less is not the path to wealth
As we always say, if you choose between spending less and earning more money, always choose to make more money in a matter of finances. It’s healthier. However, saving alone will not lead you to wealth. All the money saved must have a single purpose: to invest it.
That is one of the differences between the rich and the poor. While the poor focus on saving and indulging in a few whims, the wealthy focus on earning, saving, and investing more money.
Understanding finance and investment is not only for people who have a lot of money
People often say they do not learn finance and investment because they do not have the money to invest. The truth is that it is likely that that person does not have money because they did not learn the necessary financial education. Financial training is not just about money. Sometimes, acquiring habits and getting rid of certain psychological biases is more essential.
Have a clear vision of yourself at age 70
You will likely reach 70, 80, and 90 years if no tragedy occurs. How do you see yourself at that age? I guess you would not like to imagine that you’re cleaning the street at age 70 or cleaning windows in a company. Think about how you would like to see yourself.
Build a financial calendar
It is the best trick never to let you forget about quarterly tax payments and credit card maintenance. Creating appointment reminders to pay all your debts on time would be best. Also, you should build an ultimate financial calendar that indicates how much debt you have paid. It will keep your expenses organized, not allowing you to exceed your expenditures. It will encourage you to save money to help you survive on rainy days.
Track your interest rate
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