Financial literacy, unfortunately, is not taught in school, which is why so many people are faced with the problem of inefficient distribution of funds. As a result, some constantly take loans, while others are overly keen on saving, denying themselves literally everything. In order not to go to extremes, 5 golden rules will help regulate the handling of money.
Long term planning
It is important to plan large expenses in advance in order to assess the possibility of accumulating the required amount and to see the ultimate goal in front of you, saving on everyday purchases. Experts advise each year to make a list of important and significant expenses that you will have in the next 12 months. As a rule, this list includes vacations, buying seasonal clothes and shoes, paying taxes, training, and routine medical services.
Indicate the approximate amounts that will be required for each item on the long-term list. Then divide them by the number of months that separates you from your planned spending. For each item, you will receive an approximate amount that should go towards savings. For example, if a vacation in 7 months and spending on it will amount to about 100 thousand, then you will have to postpone about 14 thousand a month.
Of course, the accuracy of this method is not always high, but it allows you to see your expenses in the long term and objectively understand what you can afford and what financial goals it is reasonable to put first.
Clear allocation of costs
Analyze your monthly expenses and categorize them into two categories: mandatory and non-essential. The list of compulsory expenses will include rent, loan payments, purchase of food, travel to the place of work. In the group of secondary expenses, you can include pleasant little things that you indulge yourself with from time to time: visiting a cafe, beauty salons, purchasing clothes, shoes, gadgets, shopping for home.
The financial experts advise to divide the expenses on these two points in the ratio of 50% and 30% of the monthly budget. Thus, at least half of the earned funds should be spent on basic needs, and only a third part should be spent on secondary needs. It is advisable to keep the remaining 20% in the family budget as savings or investments.
The next step is to identify the costs that can be saved. For example, visiting a cafe during lunchtime can be replaced with food from home. When buying clothes, pay attention to more democratic brands or do not update your wardrobe for some time if your closet is already full of things.
Reasonable savings
Reasonable economy is, first of all, a careful attitude to money. For example, why buy groceries at a store near your home at inflated prices, if once a week you can profitably buy on promotions in a hypermarket? Various applications, electronic catalogs of large stores allow you to compare the cost of various goods and purchase them at the most favorable prices.
A pre-compiled list will help to protect yourself from rash purchases, which should be strictly adhered to. Ideally, of course, it is better to plan the menu for a week or even a month, so that you can definitely buy the essentials and not forget anything. And of course, you shouldn't go to the grocery store on an empty stomach.
Compulsory savings
It is quite logical that without the habit of saving, there will never be truly pleasant spending. In an ideal formula for allocating funds for delayed pleasures, it is desirable to allocate up to 20% of the budget on a monthly basis. But for those who are not used to living according to this scheme, such an amount may seem unrealistic.
Of course, the habit of saving is best approached gradually. To do this, start saving at least 10% of your budget for a rainy day. Transfer funds, for example, to a replenishment deposit, so that they are difficult to reach and there is less temptation to spend. Experts advise only to make savings immediately after receiving a salary, and not wait for the end of the month. Hopes that after all the mandatory and minor expenses it will be possible to postpone some amount, as a rule, are not justified.
The right motivation
Good money management starts with the right motivation. It's best if you have a global goal that can help you achieve cost control. This can be buying your own home or a new car, paying off a mortgage, taking a vacation at sea, or renovating an apartment. Seeing an important and desired goal in front of you will make it easier for you to cope with fleeting financial temptations.
Even if the dream seems unrealistic, there are only two ways - to endlessly postpone its implementation and start acting now. Let the savings for the purchase of an apartment seem completely insignificant to you, but they will not appear out of nowhere until you make a choice between new shoes and a step towards your own home in favor of the latter.
It is also important not to forget that a smart approach to money does not imply a total cost cut. Nice little things and expenses should remain in your life, otherwise no dreams and goals will save you from a constant feeling of dissatisfaction. On the contrary, a balanced and orderly approach to money will bring peace and confidence to your life.
