Author's method of personal finance management. Secrets of Personal Finance Management

If you cannot create personal capital and a reserve of money, which will be enough for at least six months or a year, you must definitely understand and study personal finances, the secrets of money management, how to properly increase and save money. All this will be discussed briefly in this article.

The main secret of managing your money is the competent distribution of expenses and income. Understanding that incomes must exceed all expenses - this is the thinking of a successful person who will certainly achieve even better and greater results. We will consider this situation in more detail later in this review.

Costs and purchases

Not everyone counts their spending on purchases, especially spending on food. But for some people, the expenses for their usual food "eat up" all the income they receive!

It is considered bad form to consider money spent on food, pleasure, bad habits. Who counts how many cigarettes he smokes a month, how much he buys fast food, or how much was left in restaurants or cafes ... How much money do you think could be saved? At least half!
After all, if you control yourself in spending and spending on food and other pleasures, sometimes you can refuse something or buy something by analogy, but cheaper.

The main expenses for which finance is not kept:

public Utilities;
fuel for cars;
spending on pleasure;
spending on bad habits;
other expenses, individually for each.

If each person began to keep a personal record of all the above expenses for at least six months, then everyone would notice a pattern that often money is spent not for its intended purpose and it could be saved and increased. It is important not only to write down your expenses, but also to analyze them, and also to optimize and reduce your unnecessary expenses.

Note that if the saved (saved) money were to be invested correctly, it would be possible to increase the capital several times with minimal risks. But few people think about it.

Putting money away from every income

The second important factor after the ability to keep a diary of all your expenses and periodically optimize them is the ability to save at least 10% of all your income. You can save more, for example, half of the profit. But it will be easy to set aside part of the money on small amounts, but when you start operating in millions, then you will have to fight your emotions. Therefore, it is important to learn the ability to constantly save a certain part right now in small amounts, rather than save one million out of ten million;)
When the habit of saving appears and takes root in the mind, then it will no longer matter from what amount to save money in your reserve capital.

Personal capital accumulation

After you learn how to correctly approach expenses, not to make impulsive and unnecessary purchases, you can easily set aside at least 10% of your money from your profit, then there will be a question of accumulating and creating personal capital.

Own personal capital is funds that are only saved and deposited at interest or in foreign currency without wasting them. This personal capital is also called reserve capital, untouchable reserve, future pension, personal insurance and other terms.

When accumulating personal capital, you should cope with your emotions, because thanks to them, personal capital can be spent on a large impulsive purchase that will not bring any benefit in the end.

Own capital should be created in order to ensure the possibility of a comfortable existence in the event of job loss, temporary inability to work and other life situations.
If you hope that you have a permanent and stable job, good health, that you can easily spend the accumulated capital and then restore it, then these are very risky and dangerous plans and hopes. Personal capital should serve as a support that will be needed in unforeseen circumstances.

Save, save your personal reserve capital and, if possible, do not waste it unnecessarily.

Expansion of the investment portfolio

After creating your own capital and recruiting a large amount, you should think about the fact that the money is not only lying, but also making a profit. Here, you will have to become an investor creating your personal investment portfolio and study financial literacy.

When creating your personal investment portfolio, you should maximally protect your personal capital from possible risks. At the same time, divide it into several parts, but at least three equal parts, where:

1. One part is in reserve and is not invested in any companies, businesses and banks.
2. The second part is invested in businesses (preferably in their own).
3. The third part - investing in various investment instruments.

What options and methods can you use to expand your investment portfolio:

Buying shares of large companies.
Purchase of government bonds.
on currency pairs hedged with exchange options.
Using stock options for hedging and capital insurance in Forex.
Buying real estate and renting out.
Business creation.
Use .
Contributions to non-government pension funds.

Working with your personal capital and investment portfolio, you constantly become more financially literate, study financial instruments and materials on them, communicate with successful people. After all, this is your capital and only you will be responsible for its increase or loss, so be the best in managing your capital. That's all, I wish everyone success and prosperity!

Financial literacy is one of those areas of knowledge that are not taught in schools and universities. Everyone has to learn it personally, walking across the field with rakes with cuttings of different lengths. Some arrive head-on, others only reach the waist.

Why is this needed?

We all remember the tasks from the school curriculum in the style of "X liters of water are poured into the pool from one pipe, and Y liters are poured out." Exactly the same thing happens with money. We receive income "out of the pipe" in the form of salaries, bonuses, investment income, etc. They flow into our "pool", i.e. into your wallet, and at the same time poured out through expenses. In this case, X and Y change. Sometimes every month.

The main goal of creating a financial management system is to maintain the state of the "pool", in which it is always full, regardless of the values of X and Y at a particular moment in time.

Let's start building the system

So, to begin with, let's define what we can generally manage in the sphere of our finances. Our income cannot be fully attributed to manageable values, and here's why. We have a salary that we cannot just take and increase at the request of the left heel for a specific month. There are bonuses, the payment of which also does not entirely depend on us (if difficult times have come in your organization, bonuses will be among the first to go under the knife). Even the profitability of bank deposits can vary at the request of the bank (within the framework of the concluded agreement).

Expenses and savings remain. Here we will deal with them.

Reserve fund

I highly recommend having one. In a safe bank. In the amount of your current monthly expenses (all, not just mandatory) for at least three months. The upper border is floating here. Someone recommends focusing on six months, someone on a year. Personally, I chose six months. After reaching the upper limit, the money can be directed to investment.

This is untouchable money. They are put into circulation only as a last resort. For example, if you were fired and you need to live on something, or you urgently need money for treatment. In addition, they perform an important psychological function: they give the feeling that there is money. And this removes a very large burden from the soul and relieves of a certain number of stressful situations.

The formation and replenishment of this fund should become a habit. A very painless way is the unconditional transfer of a certain part of the income received, immediately after the receipt of this money. I transfer 10% of my salary (permanent income) to this fund, and about 30% -50% of bonuses (not permanent income). The remaining 90% of the salary allows you to live in peace, but the bonus still “fell from the sky” (more on this below).

Running costs

These include everything that we spend money on every month. Utility bills, loan installments, food expenses, transportation, etc. It is important to understand that they are not constant. And that's okay. For example, utility bills vary depending on the time of year and the temperature overboard. And when you are on vacation, the cost of transport and meals at work also decline.

I would also recommend adding the "contingency" column here. And limit it to a specific amount (determined empirically). No matter how you plan a month, you will still suddenly need to go to the dry cleaner, buy new shoes, or just want to go to a restaurant.

Those. this is the amount that you spend every month just living. It is on this basis that the reserve fund is formed.

Anticipated costs

Not all of our expenses are monthly. But not all "sudden" expenses are unforeseen.

For example, car insurance. We know that we have to pay for the policy once a year (or quarterly). And the amount can be impressive for our budget. And then there is the New Year, with its own expenses for tangerines and fireworks, vacations, wife's birthday, and, well, my own too.
All these events are not easy for us to predict. We know they will happen. And we can even name the date. And the “sudden” realization that next month you need to give money to an insurance agent, and also buy a good gift for your wife and pay for a holiday at a restaurant, can be terrifying. If we are not ready.

But if the necessary amounts are postponed in advance, on such days you feel like a king. For such savings, I use "target" bank accounts. At least two of the three banks I use allow me to open them. This is a regular term deposit with the possibility of replenishment (but not partial withdrawal). In banking applications, such deposits are shown separately, accompanied by progress in achieving the goal, which additionally motivates.

It is also advisable to replenish such target accounts on a monthly basis. First, it allows you to smooth out the "rapid drainage of water from the pool" by stretching it over time. Second, it helps you keep track of whether your lifestyle matches your income. Thirdly, the amounts “hidden” from your SMS from the bank (I mean the standard type “written off X, balance on account Y”) amounts will not give rise to unnecessary illusions of the presence of untold wealth, and the corresponding temptations.

Life hack: the remaining 50% -70% of the premium (see the formation of the reserve fund) can be sent to target accounts. The usual depository interest is charged on them, which is a bonus for being so disciplined. The earlier the required amount is on the account, the greater the bonus will be when the account is closed.

Big purchases

They can not always be attributed to the foreseen costs, so I will take them out separately. There are times when you want to buy a new wall-sized TV. Or a car. Or a fullframe camera with a pair of lenses. The purchase amount turns out to be impressive. There are two ways to move towards this goal. The first is the accumulation of the entire amount, as mentioned above. Through a separate account, for a specific period. The second is a loan. Knowing your real financial capabilities (i.e. specific figures of current monthly income minus expenses), you can better assess whether you can afford it or not. Any adjustment to your running monthly expenses is a wake-up call that this is a “bad” purchase. As soon as you have the thought “I’ll cut my unforeseen expenses a little, and then everything will come together” - think again. And further.

Life hack: determine the amount that will be a monthly "tact" of saving for a very useful but expensive purchase. For example, you want to buy something for 20,000 rubles (or another amount for which you do not need to go to the bank and take out a loan). And your "tick" is 10000. Start a separate target account (or open a new liter jar), and transfer these 20,000 there within two months. If by this time the desire to buy this product has not disappeared, then it is really needed. This will avoid impulsive big spending. Well, if you want to buy something for 1000 rubles - buy it. Even if this is a mistake, its price will not be great (just do not forget to classify this purchase as unforeseen, and keep track of the costs for this item in this month).

"Fallen from the sky"

Speaking about the formation of the reserve fund, I called the prizes “fallen from the sky”. Personally, this is how I view this money. I do not plan to spend them until the moment they are in my account. And all the more I don’t spend it on the assumption that I’ll get the prize at the end of the month, and the budget will come together. Let the expected bonus arrive on time 9 out of 10 times. But this one time can hit very hard. Both in terms of the current financial situation, and in relation to the organization in which you work, or even to a specific person (the boss who promised to reward, but did not keep his promise). Maybe you will understand deep down in your soul that the premium was not paid for good reasons. But the thought “this is a setup” will still dwell in my head somewhere.

It is much more pleasant to think not about where to get money after the absence of a bonus, but about where to spend it after receiving it.

Life is good, but good life is even better

I have another "reserve fund". My personal. The funds from which are spent on "all the garbage" (c) my wife. Electronics, computer games, interesting stuff with Ali, etc. It allows me to carry out all these expenses, sometimes for significant amounts, without worrying about the family budget. This is my outlet, so to speak. My salary is increasing -> deductions to this account are increasing. The deductions increase -> the opportunities for pampering a loved one increase -> the mood increases -> the motivation increases. The well-being of the family is also important, but still buying yourself a new piece of iron is pretty damn cool.

What to do with undistributed income

There is a huge amount of action here. Invest, save, repay loans ahead of schedule, do charity work. You can write a separate post on this topic.

Instead of a conclusion

I have described the system for managing my personal finances. She works. Together with the accounting, which I described in my article, it allows you not only to know where the money is going, but also to know where to send those who come. It helps to manage your finances, and to do it quite effectively. I know that in January my salary will be lower than in December. And this does not cause any panic. I also know that in February the salary will be higher than in January. There is no euphoria either. Boring? Maybe. But I completely control the dangerous thought "I can afford it", which tends to arise immediately after receiving an SMS about replenishment of the account.

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We all have to deal with money in one way or another throughout our lives. During the entire time of work, at least 100 thousand dollars, or even more, passes through an ordinary person. are an important aspect of our life. Having an orderly idea of the movement of money, you can achieve good well-being already in this life. We say this because many have lost faith in their capabilities. You don't even have to save a lot, but only perform the right actions. Learn more about personal finance and how it is accounted for.

Content:

Definition of the concept

This is a collection of all the funds that a particular person possesses, in cash and in electronic form. This also includes financial instruments to achieve certain goals related to money. It is important to remember that finance is not equal to money.

finance ≠ money

Money is one of the instruments in the economy of the state, specific bills in your wallet or numbers in a bank account. In fact, it is debt bill, which has a price, as long as the state has the trust of citizens. The same principle underlies all world currencies.

Finance is money held in handling which allows them to create other money. As long as the funds are in your wallet, they are considered personal money. If they start to make a profit, then it is no longer just money, but financial resources.

Let's make the first important conclusion. You can keep personal money at home in the hope of saving it. In this case, they are inevitably subject to inflation and run the risk of turning into candy wrappers over time. Denomination, hyperinflation, devaluation, default - all these and other unpleasant events leading to the depreciation of the national currency occur quite often. Looking at savings and incomes as personal finances opens up opportunities not only to preserve them, but also to increase them.

Management always starts with accounting. The very fact of paying attention to the problem is an incentive to improve the situation. As soon as you start counting costs, they automatically begin to decline. require control, which includes a new approach to budget allocation. The 50-30-20 method will help determine the structure of the distribution of earnings.

Method 50-30-20

The good thing about this method is that it is very easy to remember. Its essence is to spend 50% of all incoming funds on necessary needs (food, accommodation, utilities, transport, etc.), spend 30% on personal pleasures and purchases that are not necessary (travel, cinema , restaurants and other establishments), and save 20% of the incoming funds.

50% for necessary
30% on pleasure
20% on a rainy day

This method is really very good, as it is suitable for many people and allows you to save a considerable amount over a certain period of time. You criterion appears, according to which you can postpone or completely cancel any optional purchase, for the sake of future well-being.

Unplanned expenses

Exactly spontaneous spending represent the main threat to their own budget and require special attention. Sometimes you have to pamper yourself for your successes. It also happens that unfavorable circumstances force us to incur serious costs. By exercising control over the movement of funds, you get at least two ways to smooth out the negative effect of emotional or unplanned acquisitions.

First, you can ditch most of them in favor of a balanced budget. Secondly, personal finances in the form of a reserve will help to avoid a debt trap if it is impossible to deny yourself the expenses.

unplanned expenses - under special control

Effective use of money

Here are some tips to help you use your personal funds wisely. All wealthy people have these items as part of their financial plan. It doesn't matter how much you make if you don't have good financial habits... The poor mindset will lead to no money at any income level.

get yourself into good financial habits

Track your expenses

Set aside one trial month where you will record all your spending. You will be surprised how much money you spend on all sorts of little things that you could do without. Personal finance does not forgive self-neglect. The idea of your own expense items will encourage you to be more economical and more efficient in managing funds.

Eliminate spontaneous purchases

Modern marketing systems are aimed at constantly stimulating purchases. The faster you make a decision, the easier it is to part with money. Even if they are not enough, profitable loans and even interest-free installments are at your service. Having a personal financial plan will make it easier for you to resist emotional acquisitions.

Always save some of your income

It is important to set aside some of your income. every month... Let it be at least 10%, but it will become your habit. A fund is formed from this money financial security, and then the first investments are made. All rich people save and multiply the delta, some of them save up to 80% of their earnings.

Save money for a rainy day

Even if such a day does not come, it is always necessary to have personal security fund... He will help in case of financial problems or simply save you from a debt hole. The standard size of such a fund is 6 average monthly expenses, and 12 is better.

financial security = reserve (6-12 monthly expenses)

Always have a strategy

Decide what material goals you want to achieve in the short and long term. Based on how much money you need for this, form your spending. The 50-30-20 method described above can be a very good solution.

All of the above tips are ingredients personal financial plan... If you don't have a wealth plan, then you have a poverty plan. If you don't have a spending plan, then all your purchases are spontaneous. If you do not have your own plan for managing your own funds and property, then the banks and the government have one. And then personal finances are no longer yours.

Use modern technology

Nowadays, programs and applications have been developed that make it possible to significantly simplify the accounting of such an important factor of well-being as personal finance. Download one or more applications to your smartphone for a trial. Stop choosing the most suitable one and get into the habit of using it regularly - the effect will not keep you waiting long.

Personal finance tools

There are many tools for managing your own budget. Any action in this direction will improve well-being. You can record the costs in a notebook, and then analyze the results. You can use modern tools - smartphone apps. Consider several personal finance management programs.

An excellent application that allows you to keep track of your expenses and income, set financial goals, and draw up a personal or family budget. ZenMoney is supported by all popular operating systems, runs on a PC.

Perhaps the most advanced application with a number of additional features and capabilities. Allows you to create multiple accounts and link them to specific bank cards. Supports multicurrency. Allows you to set financial goals, and also provides tools for monitoring their implementation. EasyFinance is also capable of advising if you are not saving enough money. Works on both iOS and Android.

The simplest and most intuitive app for iOS and Android. The wallet allows you to collect all credit and discount cards in one place, receive information about discounts and promotions, pay for travel with a linked transport card. The app is free.

An application equipped with very nice icons and well thought-out design. It has a considerable number of useful tools and capabilities that allow you to take control of your own finances to a new level. CoinKeeper has an "automatic budget" function, the essence of which is that the application calculates the main monthly expenses by itself.

The complexity of personal finance

The problem of accounting for personal finances for many people is unwillingness to do it... You need to write down your spending, analyze it, draw up a budget and stick to it. It all seems like a chore and requires a lot of effort.

if you do not pay attention to your money, it will flow to the "more attentive" owners

Wealthy people can afford to hire an assistant or financial advisor to do the chores for them. If you are of average or low income, you still have to take on these functions. Otherwise, banks and the state will "take care" of you in such a way that by retirement you will be left without a penny of free money.

Money game for everyone

To do something effortlessly, you have to do it with interest. Since the first money appeared, the whole world has been playing the game “Who owes whom?”. Some do it consciously and enthusiastically, others are forced to play it according to someone else's rules and constantly lose. Make personal finance an exciting game, come up with your own combinations (within the framework of the law) and win.

Improving financial literacy contributes to the correct management of personal funds. Unfortunately, this is not taught in school. Therefore, each person must solve this issue independently and by all means transfer the acquired knowledge to his children. Thus, in the modern world, it will be possible to raise at least a part of a generation that is able to solve material problems on its own.

Banks and the government see only obedient consumers in the population; they will never be interested in the independence of citizens. The maximum that these institutions are capable of is to teach you how to take loans "correctly" and deposit free funds into the pension fund, without giving any guarantees for your comfortable old age.

This is the first and cheapest way improving financial literacy... You have already paid for the Internet, and there is a lot of useful information in the public domain. You only need to invest your time to achieve your first successes. By adopting a few simple tips, you can free up some of the funds for further investment in self-development.

Perhaps you are sorely lacking just free time, which is a direct consequence of falling into a financial trap. In such a situation, start with personal time management by reading our.

Specialized literature

Desirable build your library on paper. Knowledge without material reinforcement quickly disappears if you do not have time to turn it into a skill. It is useful to re-read books after achieving certain success, since in this case new facets of meaning in the "old" sentences will open to you. One can fully understand the depth of the content only by reaching the level of development of the author of the book.

Traditional education, including higher education, is designed to make you a good performer of someone else's will. In a practical sense, it is useful only in order to learn how to independently acquire new knowledge. And the process of self-education must be continued for the rest of your life.

It is the seminars that are designed to provide maximum useful information on a narrow topic in a short time. In such a seminar, a person with practical experience will concentrate on giving you information on how to achieve the same result, bypassing the mistakes of the pioneer. If you already know how to earn more than you spend, be sure to try visiting paid financial literacy courses.

Free Cheese

Now there are a lot of different offers on the information business market. Free seminars are also widely distributed, organized by network marketing companies... If you are offered to gain some knowledge for free, and the seminar is held in a luxurious environment, then most likely you will be beautifully sold anything except useful skills. But even such an experience will be useful in order to subsequently be able to separate the wheat from the chaff.

With the right approach, the investment in your own training pays off many times over. It is impossible to pass this path without mistakes, but they will give the most valuable experience that you will not learn by rereading smart books at least a hundred times. Only actions bring you closer to the result.

A little about network marketing

In the countries of the former USSR, network marketing companies have gained a largely ill-famed reputation. Meanwhile, it is very democratic way to enter the world of business without leaving the main job right away and without making huge investments, unlike buying a ready-made system (franchising). To achieve real results in network marketing, when choosing a company, you should pay attention to its components in the following order:

Good reputation
Personal development programs
Strong team of mentors
People in the state with whom it is pleasant to communicate
Quality product

Note yourself the product matters last... Where he is put in the first place, it will be difficult to grow into a good leader. Rather, you will become a good customer. We do not intend to denigrate network marketing, for a certain type of people it can really be a good road to well-being.

From point of view personal finance, communication in the MLM circle can help to find like-minded people who are ready to talk about money with interest. And this is already half the battle, since most people, at the mention of money, only frown in disgust and try to change the subject. This explains a lot why money also shuns such people with disgust.

respect money so that it reciprocates

You can also try create your own business system... With this experience in network marketing, you will be surprised how the right things are said by its representatives. The problem of moving from employees to businessmen is that people from different realities perceive the same words in completely different ways. Once you expand your business reality, you will discover new meanings that are not available to employees.

Personal finance in investing

Even if you don't have any surplus money, you need to have a plan for when it will appear. Otherwise, all "extra" funds will invariably be diluted. Put in an envelope - and they will lose their value every day, according to the prevailing economic laws of our time.

This is better than being in debt or balancing at zero. But this is not enough to secure yourself financial freedom. The first steps of a novice investor are described in the article "". Nowadays, everyone should become investors in order to be able to preserve and increase their earnings.

Higher-level investors use other people's money (DDL) to create assets that will generate income for them. This includes your funds in a bank deposit or in a pension fund. To learn how to manage other people's money, you have to go through a stage of trial and error. For this, you will need your own savings so that experiments with loans do not drive you into debt.

Showing attention and respect for personal finances, you get the opportunity to gain control over your own life and turn it in the desired direction. The phrase "money attracts money" is not an accident. When you are in control of your life and in harmony with wealth, you begin to see more and more opportunities for additional income without significant effort. Other people with money will also take an interest in you, so that together they can contribute to your overall well-being.

Often, personal finance is about saving money. In fact, personal finance management is the distribution of incoming cash flow depending on the goals of a person. How to take control of your money? Consider in this article!

If you are interested in entrepreneurship, try your hand at the 10-day business game "Your Start", in which you will start to make money in your business, using your talents and strengths!

Personal finance management

Many people are now wondering why manage personal finances at all? It all starts with goals. In general, goal setting plays an important role in personal finance management. Think about what kind of life you aspire to, what old age do you see and what do you want to leave for your children? It’s the goals that show you how much you have to do to arrive at the life you dream of.

It is the management of personal finances that helps to develop a plan according to your goals, teaches you how to spend money wisely and organize your family budget.

1. Accounting for the family budget. Personal finance management should start with taking into account the family budget. You must know exactly how much money comes into the family and what the money is spent on. When there is a clear picture in front of your eyes, it becomes clear where the money goes, how to manage this process.

2. Family budgeting should be based on your financial goals. Every month, an analysis should be made of where the money is spent and how well it turns out to carry out the plan.

3. Increase in personal income- this is perhaps the main goal of personal finance management. A person must know exactly how he can increase his income and make constant actions for this.

4. Get rid of debt. If a person seeking to realize his financial goal has debts that drag him down, then first of all, it is necessary to get rid of these debts, and this should become the main financial goal. As a rule, it is because of debt that people turn to the issue of personal finance management.

5. Reserves and savings. You can create capital with the help of reserves and savings, which act as a kind of safety cushion in the event of force majeure.

The most important law of business - capital must make capital - also works for the family budget. So let's take a look at the common mistakes in personal finance management.

Mistakes in personal finance management

1. There is no understanding of why to manage finances. When people do not have financial literacy, then people do not understand why it is worth keeping records of their money and sometimes spend quite large sums on something that is not at all necessary and is not the first necessity. Therefore, it is worth taking into account your finances and understanding where the money goes and why personal savings do not remain.

2. Don't save money for unexpected expenses. You should always think about what will happen if you get sick or become unemployed, because you need savings. Therefore, having analyzed your necessary items of expenditure, you should set aside money for unforeseen expenses.

3. Lack of life insurance. Insurance will help protect yourself and your children in the event of an unforeseen situation - illness or death. Moreover, when you have children, then you must have a will if you own property and business, otherwise your children may subsequently have problems.

Services for managing personal finances

There are various programs for personal finance management.

1. Zen Mani- service for accounting and planning of personal finances. The mobile version of the service allows you to use not only PCs, but also mobile devices to work with the service.

2. Trash money- the service is a little home bookkeeping and helps you plan your budget for the year ahead. The service has a lot of functions for different purposes, including online reports, storing accounts, setting financial goals, a mobile version, templates for transactions and reports, etc.

3. HomeMoney. The service helps not only keep track of personal finances, but also helps to plan a budget for a small business.

Thus, personal finance management allows you to formulate your financial goals and go to their implementation using accompanying tools.

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The financial position of a company is measured by several factors, the so-called financial ratios. Why do you need to know these coefficients?

To achieve financial freedom and independence. Using the above secrets of money management, each person who applies them in his life will surely become very rich.

All people use money, but unfortunately not everyone knows the secrets of money to increase it. Many people use money incorrectly, becoming their hostages and "slaves". They buy unnecessary things, goods, services, choosing not within their means, but more expensive ones. This leads to the prevalence of expenses over income, and as a result, such people slide into an uncomfortable life and poverty.

Proper handling of your income, expenses, desires, leads to wealth. How to deal with money correctly will be discussed below in the eight secrets of money management.

1. Save more than 10% of all your income

Each person is required to set aside at least ten percent of all income received. The sooner people start saving, the sooner they will come to wealth.

Important:

You need to save from all income: salary, investments, gifts.
You should save at least 10% of your income. If possible, you need to increase the percentage of savings from your income.
Starting your savings with small amounts will make it easier to save from large incomes in the future.
Do not under any circumstances spend the created savings.

Despite the simplicity of the advice, those who have been using this method for more than 10 years are already quite wealthy.

2. Income must exceed expenses

If a person does not keep track of his expenses, then they will very quickly begin to prevail over income. It doesn't matter how much money a person gets.

There are many cases when people receive income of one million US dollars, spend one and a half or even two million US dollars. Thus, these people drive themselves into a loss by receiving loans or installments that they cannot pay off in the end.

The more money, the more difficult it is to control it and the greater the likelihood of the prevalence of expenses over income. Always, and control your capital!

3. Get rid of all debts

The sooner everyone is free from debt, the faster the path to wealth will pass. Debts tend to "drive" those who have them into an even larger "debt hole". That is why all debts should be gotten rid of as soon as possible.

Debts include: loans, borrowings, mortgages and other debts, for which you have to pay additional accrued interest on the borrowed loan.

4. Become the owner of your own real estate

Many buy real estate on credit, but not many manage to repay it, especially in Russia and the CIS. Therefore, you should not "rush to all the bad" and take out a mortgage or other loans. The property should be purchased depending on the current opportunity.

For example: if you want to buy a three-room apartment, but you have enough money for a one-room apartment, then you need to take a one-room apartment. Having become the owner of a one-room apartment, you should collect money for the purchase of a two-room and then three-room apartments.

If you immediately take a three-room apartment for a mortgage, you should understand:

taking a mortgage, you will have to overpay at least twice the real cost of the apartment;
for missed mortgage payments, a fine and interest are charged;
the cost of keeping it will be higher than for a one-room apartment;
and most importantly, the apartment belongs to the bank, and not to you, until the mortgage is paid!

The risks of buying real estate on credit are too high. This is why rich people never buy real estate on credit.

5. Money should work

With a certain amount of money, they should be made to work. After all, money is intended to pay for work and goods / services. If money works, it will multiply many times faster, bringing additional profit to its owners.

Of course, you can not force the money to work, but simply keep it "under the pillow", but in this way it will slowly increase.

6. Invest in reliable projects with guarantees

Investing is an important way to make money work. But it should be understood that investing is a risky business for the ignorant and people without experience and financial literacy. If a person is financially literate, understands the risks and requires guarantees, his investments will be reliable.

So:

Learn from Everyone, don't imitate anyone!

8. Caring for a comfortable old age

Understanding all the above rules for achieving wealth, you should take care of your future and your old age. If you start taking care of savings for old age at a young age, then in old age there will be no worries about small pensions or high retirement age and other problems of pensioners.

You can take care of a comfortable old age:

Endowment life insurance.
Accumulative pension insurance.
Not government pension funds.
Buying securities and holding them.
Bank deposits.
Purchase of precious metals.
Buying a property.

You should not live "here and now", you need to think about your future and descendants. Having taken care of your future in youth, in old age it will be possible to fulfill all unfulfilled dreams with your savings. Instead of worrying about a meager pension.

Conclusion

Learn to manage your capital, income and expenses right now, as a result, the results will not be long in coming and will bring a huge fortune.

Managing, accounting and planning your money is the hardest and most boring job that few people do. Those who have learned the secrets of personal finance management will surely achieve success and receive enormous wealth.