The Internet is replete with headings on the topic of financial hacks. People love the simple answers to fundamental financial questions and think that stopping throwing away old things alone will make them productive. The reality, of course, is always more complicated than expectations. However, to be prepared for difficulties and to perceive success stories is also necessary.
All financial life hacks based on the fact that every capable adult person at any given time must be responsible for their financial condition. And they know how to get out of a particular situation. These recommendations created on the principle of a “pirate code”: they are not strict instructions, but only sent in the right direction.
Financial life hacks never preached as the only right decision. The only thing that can convince a person of the right business strategy is an everyday practice. The best confirmation of the right course is its financial well-being and the ability to prevent personal financial crises, regardless of the global economic situation. Of course, there are insurmountable circumstances that break plans, but the general outline and strategy should not suffer from this.
So, here are 10 financial life hacks of a universal property. Why ten? Absolute convention. After all, we remember that these are not commandments, but only recommendations of common sense and worldly practice.
Tip one. Get used to budget planning.
Always plan. Never be lazy once again to paint everything. The correct “tab” of the budget with all the articles is guaranteed to save you from troubles like significant unplanned expenses.
There will always be two categories in any personal budget:
- unavoidable fixed costs;
- changing costs.
Inevitably, we pay our landlord for rental housing, pay utility bills, travel expenses, student loans, mortgages, insurance, necessary treatment, and, of course, food and the necessary change of clothes. It is an invariant part of the budget, to one degree or another, such expenses required.
The changing type of expenses is travel, optional leisure, spending on status accessories, branded clothing, and, generally, anything that is not required directly for survival or essential comfort. The variable part of the costs can and must be reviewed in the direction of rationality.
Tip two. Invest in yourself.
Emotional experience, new experiences, socialization, parties are wonderful things. However, they should not interfere with strategic goals. First of all, try to cover those needs on which the future life critically depends or to pay for those things that must be closed without fail. Education, health, well-planned utilities, transportation – these are vital things that require primary attention. They can never sacrifice in favor of the moment. A particular evil is a waste for the sake of spending. They will not give the desired relaxation, serve a short-term vanity, much empty the wallet, and lead to big problems and balancing from paycheck to paycheck.
To make your dreams come true, you will need one of the types of savings. It is either as a retirement account, or in a different form, but in any case, this stock is untouchable. It is best to form a financial pillow first of all from young years, it is obvious. The main thing is to always save it, without spraying on short-term trita.
Tip three. Debt is bad.
Not all debts, of course. We live in a world of lending, which in itself is a powerful tool in the modern capitalist economy. But still, debt is bad. There is a conditionally “acceptable” debt and a categorically bad one.
Almost everything is familiar with categorically bad debt, which does not prevent many people from falling into the same trap. It is the notorious “demonstrative consumption” in a situation where a person cannot pay his bills. But, at the same time, he wants to live wonderfully and to show everyone his financial success. It is impossible to do this. Financial discipline is a prime necessity recognized by successful countries. Live within your means!
At the same time, you cannot discount everyday needs. Small, short-term loans for the necessary things are justified if the borrower knows precisely from what sources to repay the debt. Significant investments related to urgent issues of health, of one’s own or of those close to one, are also justified. In such situations, of course, you can and should occupy. But the debt will remain a bad, forced measure, and not something that should be resorted to easily and joyfully.
Tip Four. Limit your credit cards!
It is better not to get into loans at all, but even as a last resort, try to pay off your loans precisely during the same month that you took it. It will protect against interest and also strongly disciplines. Good credit history is good for banks, but when we are not talking about student loans or mortgages, you need to pay on time and carefully.
Tip Five. Spend less than you earned.
It would seem that truism, commonplace, commonplace, common truth. No. Many people do not know how to control their expenses and save. It is not even from the category of personal finance hacks. Such advice is essential for basic financial survival. You can’t spend more than earned and unwind the spiral of debt. If we are not talking about some extreme disaster, when money was urgently needed, please limit spending, leave at least a little for the next month. No one will guarantee that your earnings in a month will be permanent or grow.
Tip six. Worry about the “financial parachute.”
It is not an untouchable reserve, but very close to it. You will inevitably need certain financial funds in case of any problems. Man is not a machine; fundamental troubles happen to him, much more often than we would like. Be sure to have money to wait out a personal financial crisis. Ideally, they should be more than enough. But let’s be realistic: even relatively small contingency stocks will help a lot.
Tip seven. Plan goals.
Everyone understands the importance of goal-setting in words, but few people are seriously ready to paint everything to the smallest detail. However, success often consists of prescribing each next step – from saving for a short vacation to conquering your first million, from gradually moving up the career ladder to ensuring a calm old age.
The psychological effect often has the very fact of ordering — a man “charges” himself to achieve something positive. The structuring of desires makes awareness of the goal as something quite attainable, albeit not immediately. It is especially important to start with everyday life. It is not necessary to draw up a “plan for the conquest of the world,” however, certain developments on the theme of the distant future are incredibly desirable.
Tip eighth. Start your investment.
It is difficult to advise on which sphere you should concentrate on financial efforts. It depends on the ability of a person to be competent in a particular area, and it depends on the current needs of the market. Today, for example, investments in real estate and exchange activity remain traditionally profitable. More recently, cryptocurrencies added to the list. The essence of most books on money-making hacks remains in the field of successful investments.
The main thing in investing is to try. Yes, this is commonplace, but few even the billionaires immediately and guaranteed invested in the business of his life, which brought him capital. The specific area of investment is also very dependent on the national characteristics of the market. But creating investment is the most practical way of welfare for old age. It is also important to diversify risks and not invest solely in one thing.
Tip nine. Evaluate your net assets.
A net asset is a term from the sphere of legal entities and macroeconomic indicators. But for assessing personal financial viability, this tool is most useful. We have not real financial wealth in the form of deposit on the account, by no means. Now the economy is much more complicated, and we should consider more factors.
Calculating your net assets (better known in the world of money under the English name net worth) is not difficult. A net asset is assets minus liabilities. The assets include virtually everything that can give or already gives the owner an income. In liabilities – spending, bank commissions, the fixed costs of maintaining your business (if any) or merely the standard of living.
In severe cases, specialized offices are engaged in supporting and informing a person about his assets. But, of course, you can organize this process yourself. In the end, literally in the last century before the last century, almost all the founders of small family affairs themselves conducted ledgers with a balance sheet and a total calculation of net assets.
Tip ten. Earn more.
Easy to say? But you can do it. Over time, moving to more promising labor markets, retraining – this is all your value as an employee, it must increase steadily. At the same time, thrift skills will only help in how to succeed. With more money, you can save more. No, it’s not about being Scrooge or Gobsack and piling over every dime. The point is the wise use of financial resources, which with the growth of income, will give the desired economic prosperity. Monitor your well-being, do not let the processing affect the health too severely, but do not miss the opportunity to earn an extra cent.
The science of finance hacks is quite every day and straightforward when a person knows the goal. It is based both on simple everyday frugality and on a basic understanding of where the economy is moving now, and what needs to be done to be in the trend. There is a well-known maxim among self-mates: poverty is when there is not enough finance, but poverty is a state of mind. You can quickly correct the first case with cash injections, but in the second one, it is necessary to change first of all, internally. A complete review of the structure of behavior and habits of handling money gives excellent results in a short time.
All the above tips teach one thing – prudence, discipline, self-reliance. It works not only with money but also in any extraneous endeavors. Thus, time optimization and improvement of well-being, and significant psychological stimulation occur.