Whenever a person makes a balanced decision, it is usually based on internal principles. Principles are a set of rules that you follow. They, as a result, reflect what you value..
Thinking about this, we decided to talk about a few rules that you must follow regarding your personal finances. These are the monetary values that will help you become a rich and financially independent person in the modern world..
Principle # 1: Always spend less than you earn
A month, six months, a year or ten years, regardless of time, you should always follow this principle. Whenever you do not adhere to this rule, you risk driving yourself into a debt hole, making impulsive, unnecessary purchases and also experiencing problems with any unforeseen expenses. Living within our means is what the principles of financial success are based on.
Principle number 2: you will never be mistaken when paying a debt
If you decide to close a consumer loan instead of noisy celebrating your anniversary, this will be the best gift for you and your money..
• First, when you pay off a debt, you reduce the future interest that you will have to pay on this loan.
• Secondly, when your debt is eliminated, it directly improves your monthly cash flow by removing the required regular payment and providing you with money that you could not use before.
Principle No. 3: Making a loan, you make a mistake
In continuation of the previous principle, it is worth adding that if you decide to get a new loan or microloan, then you are very mistaken. In terms of financial literacy, this is completely illiterate.
• Firstly, when you apply for a loan, this means that you are constraining yourself to new obligations and expenses. The flexibility of your life is reduced.
• Secondly, any loan is accompanied by interest, which often exceeds all possible limits. A person takes a car loan and at the exit discovers that with the money he gave to the bank, he could buy himself not one, but two cars. This means that you buy things more expensive than they actually cost..
Getting a loan is worth it only when you want to be tightly attached to your favorite job.
Principle 4: Cut Your Costs
The principles of financial success will certainly not do without it. Almost all people with a certain financial flexibility, of which the majority in the Western European world, spend an overestimated amount on items that are present in their lives.
The fact is that we, in principle, do not need so many things. The reason lies in the active propaganda of the media and advertising, which impose a certain lifestyle on people. This leads to a craving for loans, and a desire to comply. But high costs can be avoided if you cut off what you do not need..
To understand what you can do without, do the following: Cut off absolutely all of your expenses (except basic) for clothes, cafes, parties, shopping, junk food, appliances, phone accessories, etc. After a while, listen to yourself and, if you realize that you are suffering without any one thing that you always bought before, return it. Thus, you will find your healthy balance of expenses and find out what is really important for you.
Principle # 5: Prepare for your spending in advance
If you understand that you need to replace your car with a new one in a couple of years, pay for your child’s education or pay taxes, then start collecting money for this now.
Just calculate how much you need to save each month for this or that and transfer this part to the savings account. Better do this process automatically through your banking application. This will reduce your stress and allow you to spend less than you earn..
Principle # 6: Get Ready for the Unexpected
Your life will not always go the way you want. A series of unexpected victories can be replaced by unexpected failures. They need to be prepared and create an emergency fund first..
Emergency fund – this is the money that you save on a regular basis every month to cover sudden expenses.
1,000 rubles, which will be postponed every week during the year, will amount to 48,000 rubles in 12 months and will greatly help you out the time your gearbox breaks down.
Principle 7: Be honest with your partner
If you are in a relationship, then this principle applies to all aspects of your couple. This also applies to money. According to statistics every second couple has a conflict over money, and to avoid this you need to speak openly with your partner about money and expenses. As soon as you start hiding your expenses (excluding morning coffee at Starbucks), debts and unforeseen loans you put a financial burden not only on yourself, but also on your soulmate.
Be responsible and take the liberty of turning an unpleasant conversation about finances into negotiations. Even if you have problems, together it will be easier for you to overcome them, correct the current situation and form your own principles of financial success.
“Success is not magic or sacrament. Success is a natural consequence of consistent compliance with simple principles. ” – Jim Rohn….
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