The experience of the previous year has taught us to be cautious about forecasts and recognize financial risks. This is a topic that should be brought up as often as possible. Saving and planning - that's what can be the basis for reliable protection of finances in times of crises, pandemics and other phenomena that negatively affect the habitual rhythm of life. Financial stability gives you confidence and inner peace.
However, finances require competent management. It is simply vital to understand the numbers and know the answers to such questions as: What does it mean to manage personal finances competently? What recommendations can be a universal solution to save and increase your capital?
This is the only way to cope with the challenges of 2021.
It is possible that you even know some of the rules, but have not given them due importance before. A few simple tips allow you to emphasize the basic tenets and protect your own personal capital, regardless of its size.
Tip 1: Avoid any squander
Revise your personal spending line item. Sometimes an audit of our daily expenses makes us wonder how much we spend on things we could have avoided easily. If paying for housing, medication or basic food is essential, another cup of coffee or frequent restaurant visits can easily be discarded. Is the office, university, child's school or supermarket nearby? Just walk, don't take a car. Such a choice will reduce fuel costs, revise your food basket filling and improve your health greatly.
Tip 2: Plan Your Shopping
It is human nature to succumb to emotions. As a result, you make impulse purchases, which is good for marketers only. Due to numerous researches spontaneous shopping is the mistake of 84 percent of all shoppers in the world. Many shoppers make about 3 impulse purchases on every 4 out of 10 shopping visits.
Let each purchase decision be a deliberate one. Before you buy any item, just think about it. Do you really need another scarf, that pair of elegant bright yellow shoes or a spectacular coat on the size less (because you plan to lose weight for the next season)? As practice shows, it is unlikely that you will need all these purchases. Of course, for many people shopping - is a way to increase spirits, but the presence of crisp bills that you managed to save in your wallet from a rash purchase, will please much more, won't it?
Just the facts: planned shopping can reduce impulse purchases by 13%. Unplanned shopping, on the other hand, increases spending by an average of 23% .
Tip 3: Increase your income regularly
Inflation, rising prices, and rising living standards all contribute to regular spending increases. A couple of years ago, you could afford a lot more on $100 than you do today. Rational saving is not enough to achieve a stable financial position. Endlessly "tightening your belt" will not always work. What is the proper solution? This could be an extra income, a new job, passive income, etc. Choose the optional solvation that will be the most comfortable for you and that will allow you not only to save, but also to multiply the income.
Tip 4: Do not be shy to be pragmatic
Life is often unpredictable. When all is going well, we rarely think about the seemingly obvious points in case of trouble. Nevertheless, we should not forget that society obeys laws, and our financial security depends directly on the documents and legal seals. So remember and teach your children to be pragmatic - it's not a shame, it's often a matter of survival. It's important to take care of yourself and your family in advance. We are talking about formal rights to housing and other property, as well as the right to dispose of financial savings.
Tip 5: Improve your financial literacy
Following the classic proven methods of running your financial affairs that work is certainly a plus. However, the realities of modern society are changing rapidly. To prevent this from negatively affecting your capital, you should regularly familiarize yourself with other people's positive financial experiences. You can do this through blogs, essays, articles and books simply by famous people who have achieved financial heights and are owners of billion-dollar fortunes, financial analysts, coaches. By the way, have you already read the book "The Road to Financial Freedom" by German financial coach Bodo Schaefer, where he introduces the three financial plans for everyone who wants to live comfortably?
To fulfill all your desires, you need to understand what you need. We are not able to hide from the challenges of 2021, but what kind of the answer you prepare is entirely up to you! It is effective to act precisely on your goals. Precise knowledge, good tips and effective ideas will help you to invest better and plan your budget pattly to achieve your goals. Good financial luck!