Although we live in a time where we can literally find everything and anything online, there are still a lot of people who are clueless when it comes to money. Just imagine how many of us are still living in debt instead of wealth.
If you are one of these people, here are some of the most important personal finance tips I can share with you.
1Write down your goals
It is impossible to reach a destination when you don’t know exactly what and where it is. Everybody knows that, but a lot of people still fail to write down their goals in terms of work, money, achievements, or even personal life.
Know what you want and know it in detail.
What is your desired monthly income? How will you reach it? How long will it take you? How will your life change when you reach it? How will you and your life look like? How will you feel?
Learn these things about yourself and revise your goals as needed.
If a decision is not accompanied by action, then it’s just a wish and not an action.
Ideally, you don’t really need to take big steps right away. In fact, doing a quick research on how you can achieve your goals is one simple way to get started.
Keep yourself acting daily towards your goal even if it is with the smallest thing. You won’t reach your destination in one huge step but with a 1,000 small ones.
3Everyone can save money
The more money we make, the more we spend.
That is exactly why most people are never satisfied with the amount of money they make. They want more because they spend too much money that they end up in debt.
In reality, you can save at least 10% of what you make if you…
4…Pay yourself first!
From whatever you earn, put aside at least 10% BEFORE you spend anything. This way you’ll learn how to budget the remaining money you have for your expenses.
Open a savings account and use it. Don’t be one of those people who close their accounts after a couple of months.
5Pay off your credit card
Settling a debt with high interest, like 17%, is like making an investment with 17% return! That is some great return, mind you.
Don’t just pay the minimum on your card. That is the banks’ trick to keep you paying forever. Put as much as you can spare above the minimum and keep on doing it until you are free from debt.
In case you have to pay more than one credit card (and who doesn’t?), there is a strategy you can use. It’s not magic, but it gives you a blueprint to follow.
Pay off the minimum amount on all cards except for the one with the smallest debt. In that one, pay off as much as you can every time.
When the smallest debt is paid off, do the same with the next one in order. Continue the process until you’ve cleared all your debts.
+1. Poor people buy stuff; rich people buy assets
Average Joes think their cars or houses are assets when, in reality, they are actually liabilities. Rich people know this, so they try to put their money only on things that can make them earn more.
This is one of the best personal finance tips that is often overlooked by a lot of people.
Next time you want to spend money on something, take a minute and think: “Is this going to help me increase my monthly income or not?”
If the answer is no, maybe it’ll be wiser to just let the idea go.