Money management is not an art, but a necessity dictated by modern life. If a person cannot live on his salary, it is time to change jobs or learn to manage his money. Not tricky but important rules will help in this..
A person may encounter a situation that seems paradoxical. Getting a good salary, in 1-2 weeks he is practically without money. Every month he expects certain expenses:
• rent or mortgage;
• Payment of utility services;
• purchase of products.
This is just a small list of possible expenses. According to the Director General of DAICO Mikhail Bondarenko, liabilities are any expenses, for example, payments on loans, renting an apartment, spending in stores, etc..
Monthly obligations and inability to manage their own incomes create a vicious circle. You can break it. You only need to learn how to properly and successfully conduct your money management.
Mikhail Bondarenko: “The most important rule is to reduce the number of liabilities and increase the number of assets. This is a classic rule from Robert Kiyosaki’s financial management methodology. This rule is equally relevant for the family budget and business. This rule is very effective when you start to put it into practice in everyday life. ”.
How to manage money
Over the course of 16 years, a person has undergone several training courses, but during this time no one has taught him what proper money management is. To master these skills through the family is also not possible. Rarely in what family are able to rationally manage finances. It remains to receive these vital knowledge and skills on their own.
There are general rules on how to create effective money management:
• cost planning;
• search for new sources of income;
• rational use of loans;
• making purchases in cash;
• investing in one’s own development;
• accumulation of reserves;
• setting goals;
• study of financial legislation.
Each of these items should be dealt with in more detail..
1. Cost Planning
Managing finances is better not in the head, but on paper or in an electronic document. Mikhail Bondarenko: “Now there are many convenient mobile apps (including some banks inside your application) that help you figure out how much money comes to a person per month and how much it leaves. If you ask yourself frankly how much money was spent over the past month, very few will know the exact number. And you need to know her. ”.
Entries will help you learn how to plan. By compiling a list of necessary purchases, you can evaluate their value and importance. Some of them may be a waste of money..
“In order to gain financial independence and ensure a decent future, it is necessary to very tightly control the cash flows within your family, company. We need to start small – create a table where all your assets and liabilities will be recorded, and daily expenses and income should also be recorded ”.
Venture investor Alexander Krasavin: “The distribution of money among several types of expenses will allow you to control the flow of finances and give an understanding of which area of life you need to save and in which? buy something more expensive “.
2. Search for new sources of income
Confidence in tomorrow will give an additional source of income. A person will be less dependent on the basic salary. In this case, the main desire. So the source can be the ability to knit hats. There is always a demand for them, and if you do it efficiently and creatively, then income will increase.
It is worth selling all unnecessary things. There is no need to stand in the market and spend time on it, just use the Internet. Having studied the financial literature, you can invest in banks and make investments. If a person has unclaimed property, it must be leased. So I will not accumulate debts, but passive income will appear.
Mikhali Bondarenko allocates assets – this is what brings us income: renting out property, dividends on purchased shares, interest on bank deposits, additional part-time work.
3. Loans (possible, but neat)
Often a person wants to get the thing they like instantly. If these are the next shoes, then you should wait for the salary, but if we are talking about technology that will bring income, then you do not need to wait. Bank loans can solve this issue.
Venture investor Alexander Krasavin: “Do not forget about credit cards – they help keep you in good shape and at the same time buy something, in fact, by installments. Many banks have an interest-free loan repayment period, it varies from 30 to 90 days. “.
Credit should be used, but within reasonable limits. “The advantage of a credit card is that it allows you to make a one-time large purchase, the cost of which you can return within 2-3 months (depending on the conditions of your program), transferring money from salary in parts”.
When a person does not see his money, it is easier for him to part with them. This leads to the acquisition of unnecessary things. It is better to pay in cash to know exactly about your expenses. According to Avetis Vartanov, the head of the QBF training department, an audit of personal expenses should be carried out at least monthly.
Small and optional spending eats up a significant portion of the budget. In my opinion, the inability to save hides a misunderstanding of how to save money. Naturally, at the same time, the habit of not denying anything to ourselves develops as long as there is something to spend. In addition, some stores may make an additional discount for paying the entire amount in cash..
It is worth remembering self-education. A person should not stop studying after graduation. The world is constantly evolving, new opportunities appear. Do not neglect trainings, courses. They will help to understand new areas of business. Avetis Vartanov reports: “Capital should work. This will help stock market instruments. The source of passive income can be stocks of dynamically growing domestic companies or federal loan bonds, the guarantee of the return of funds and coupon payments on which is given by the Government of the Russian Federation. In any case, the yield on securities will be much higher than that of a deposit. ”.
It is good to have a certain reserve in case of unforeseen circumstances. To do this, it is enough to save a certain percentage of income every month. If possible, you can accumulate savings. They will help in achieving goals. Mikhail Bondarenko: “Reduce those expense items that begin to occupy a large share in the visual diagram. Strive to ensure that the amount of income exceeds the amount of monthly expenses and then you can start investing 10-20% of free money in various assets every month ”.
Venture investor Alexander Krasavin: “Money management is divided into two areas: either you just want to save your existing savings, or increase them. In any case, it is always necessary to strive to ensure that you have the opportunity to save 30% from your salary, and ideally? 50% to a bank account with a minimum of 7%, which will at least cover inflation. The remaining 70% or 50% should also be allocated to basic needs: food, clothing, daily expenses, as well as to allocate an inviolable stock from this amount, which you can then deposit on ”.
7. Goal setting
Accumulating savings is easier, having a specific purpose, but rather a few. This is not about a specific amount, but about certain benefits that a person will receive when using them. This may be the purchase of housing, a car, a trip abroad, a comfortable old age, child education.
Venture investor Alexander Krasavin says: “You should not keep all your savings in one monetary unit. Try to save money not only in rubles, but also in euros and dollars. You can add here a more stable currency, for example, pounds ”.
8. Money and the law
A person is responsible for his money, so you need not only to be able to earn it, but also to understand the issues of taxation, banking, investment.
According to Mikhail Bondarenko, diversification is important: one month bought the shares of large companies, the next month bought government bonds, the third month bought an inexpensive garage that can be leased, etc. In order not to be deceived, held accountable by the state, you need to know the current legislation. Only full transparency of your financial flows and an understanding of which category that applies will help you build competent budget planning with the ability to constantly save and thereby accumulate your state ”.
Money values respect
Do not evaluate people by their financial capabilities. Modesty in money matters will not be superfluous, so you should not tell everyone about your good financial situation, about the desire to save a certain amount.
Money does not tolerate waste, they must be managed carefully and judiciously. Avetis Vartanov: “Many people have the impression that it is simply impossible to save savings, therefore it is better to invest in things: our compatriots often buy new clothes, even when they are not needed, they buy equipment, despite the fact that the old one perfectly satisfies existing needs. In my opinion, the root of this habit lies in the fact that for a long time in our country there were no effective and safe tools for working with savings ”.
There are many rich people in the world, but they often do not show this, leading a familiar life. They do not have elite housing, expensive cars, but they have confidence in the future and a sense of financial independence. This is more valuable than momentary wealth. This is one of the foundations that allows you to create successful money management..
If you learn to control small amounts, you will soon be able to manage large savings.
Article prepared by Kristina Rudich
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