10 tips to improve your financial well-being in the new year

2024 Author: Malcolm Clapton | [email protected]. Last modified: 2023-12-17 03:44

In our time, to achieve financial well-being, simply saving on food and clothing is no longer enough. To arrive at long-term financial stability, it is necessary to adhere to certain rules that cover different facets of our life. For you, we've prepared 10 simple personal finance tips to get you started.

If you do something, and it does not work, find other ways.

In this article, we've put together some of the most versatile money-handling tips for you. They will help you become financially savvy in the new 2016. But, attention, they all work in the long term, and do not give an instant effect. And if you do not go into the details of clever monetary theories, then these simple tips will be enough to feel comfortable when dealing with money and grow rich a little.

1. Diversify your finances

A simple, versatile, and most importantly, trouble-free way to improve your financial condition.

Diversification - dividing your savings and income into equal shares by various instruments in order to maintain stability in crisis situations. At the same time, diversification can be applied not only to money, but also to life in general: work, leisure, education.

For example, divide a large deposit into parts and put in several banks. If something goes wrong in one bank, you can withdraw money from another.

Develop professional skills in various fields. You can independently improve your qualifications or find a part-time job - this way you will be more confident on your feet in any force majeure.

Thus, as in history, it is better to lose one battle than a war completely and quickly. Diversification for the financier is the most important thing at any time.

2. Pay yourself

This is a very popular and hackneyed advice, all successful people in one way or another in their books suggest using it. What to do, it really works.

An ordinary person, when receiving a certain amount of income, for example, a salary, immediately deducts all his current expenses (utilities, telephone, urgent purchases) and plans purchases, and remembers his own development last, if at all. Imagine that you received a salary not 35 thousand rubles, but 32 thousand, and the amount of 3 thousand rubles immediately goes to the asset formation fund.

A pragmatic person tries to separate the amount from the profit in order to either immediately invest it, or postpone it for his own development and new ideas. Usually it is 5-10%. As a result, funds are always left for new projects, education, trainings - moving forward, and only then the expenses are covered with the remaining amount.

The psychological effect of realizing that you are ready to invest these funds in something, are ready to take a conscious risk works well here, the loss of them will not be a tragedy for you. And in this way you gain a gigantic experience.

This is the “pay yourself” rule: when earning income, set aside 5-10% for your development, for ideas. The main thing here is to understand that this is not the same as setting aside for a car, furniture or vacation. This money is for the idea when it matures.

It seems to be a simple rule, but how difficult it is to follow it! You need a very good skill of self-discipline and the ability to deny yourself a lot.

3. Avoid commissions

Try to avoid paying commissions on various transactions: telephone, banking services, insurance premiums, additional guarantees, and the like. Know how to understand such little things, know how to refuse additional optional services, do not be lazy.

In the long term, this is a very good capital. Don't believe me? Try not to pay commissions and penalties for six months and see how much you accumulate.

Examples of commissions: someone else's ATMs, a mobile bank, an additional guarantee for goods, the purchase of useless discount cards, payment with electronic money through terminals, additional services during the service. Even the purchase of small goods at the checkout in a hypermarket can also be considered a commission - for standing in line.:)

4. Don't lend to friends

Based on my life experience and observations of other people, I will say: never lend to close friends, no matter how much. If you want to help, just donate the amount you can give. There will be more returns in the future.

5. Bring a limited amount of money with you

If you go to a store or are going to use some kind of service, that is, you will find yourself in places with a lot of temptations, do not take your card with you (at least at first), but take a certain amount of cash that covers your expenses, and not a ruble more. Works flawlessly, but you have to develop a habit.

Yes, this advice may seem ridiculous, but later, applying this method in practice on a regular basis, you can protect yourself from impulsive purchases or purchases of services that you do not need. A plastic card introduces you into a consumer trance, as if everything is allowed, and if you still have credit cards or overdrafts, then your prudent mind may not stand it at all.

Such training also helps to say no to yourself when purchasing unnecessary things and services offered in various ways. It's simple: you do not have the necessary funds to pay for them.

6. Create a financial cushion

Regardless of the financial situation in the world and at home, regardless of all your knowledge, you must have a financial reserve in case of a "drought".

The books often talk about financial reserve for the minimum support of your life for six months. I believe that in our rapidly changing times, this is unrealistic. And it is not necessary at all - 2-3 months are enough. During this time, you will surely figure out how to get out of any crisis situation, and get a job at any job.

This is your stabilization fund (as in our country). If force majeure circumstances arise: dismissal from work, business failure, crisis, illness - you must live on this stabilization fund for 2-3 months until new incomes appear.

7. Introduce a system of penalties

As a child, remember? Nashkodil, brought the troika, did not fulfill the order of the parents - a fine in the form of deprivation of sweets or pocket money, a computer, or simply being sent to a corner. Why not apply such a punishment now, but to yourself?

I spent a lot - a fine from above, spent too much on vacation - a fine, lost money - another fine, too lazy to earn more - also a fine. Each person sets for himself the limits of what is permitted and the amount of the fine.

The amount should be small but tangible for the budget. And you should not return the accumulated money at the end of the month to yourself, otherwise it will not be a punishment. Think about where to direct them. For example, you can donate to your child, friends, and the best - to charity. But at the same time, there is no need to explain anything to anyone - they gave it away, and that's it. Every wrongdoing must have a price.

You can replace the monetary fine with another punishment, such as deprivation of sweets or additional exercise, but monetary punishment works best.

Want to be smart about your finances? Start with yourself. As long as you do stupid things, money will treat you the same way - it's simple.

8. Use the principle of justification

The amount spent on something must fully meet criteria such as safety, health and functionality.

There is no need to buy something completely cheap or get services for a penny: this is fraught with consequences for both safety and health. But don't think that the expensive is the best. We need a competent approach.

You can use the principle of the golden mean: we sweep aside the cheap, sweep aside the expensive, and take the average.

This rule works great when buying equipment: a new one is too expensive and not tested, a cheap one is almost guaranteed to break - we take proven models that are universal and meet all our requests. It is better to choose simple and functional than beautiful and sophisticated.

9. Pay a specialist

If there is an opportunity to save yourself time on more important tasks, it is better to pay a specialist to solve the problem.

Many are trying to save money on repairs, health, recreation, food. And they often try to do everything on their own. But that's not always better. Such independence can take time, fray nerves in order and lead not to the best result.

But if there is an option to speed up the solution of the problem, and spend the gained time and energy on something more important and useful, then pay better. Miser pays twice.

10. Don't live in the moment

The most useful advice and the most difficult to follow. You do not need to live in the moment, otherwise you will miss a lot, most of it will pass you by.

Unfortunately, many people try to satisfy their momentary desires: “I want this and this,” but for what it is not clear. What prospects in the future these monetary spending will bring is often not taken into account. Yes, it's good to buy a laptop for blogging, writing a book, or code, but not good for games, TV shows, and social media.

Learn to direct your life to the future, and not to today's desires and impulses, often due to the surrounding information environment. A financially savvy person has an important skill - the ability to plan. Yes, plans are not always implemented, but the main vector of development remains.