4 great tips to help you manage your finances from debt
Have you ever been in a situation with no coins in your wallet? Or as soon as you receive your salary, you see that there is not much left? None of us want to tell everyone that we don’t have any money in the account. And to avoid this situation, you will need to learn how to plan your personal finances well.
According to a study by the University of Illinois, up to 32% of young people do not have good financial management skills. However, here’s the good news: you can start taking charge of your finances at any time. And this article will give you inspirational examples from those who did not know about financial management to become extremely successful people.
1. Increase income, limit spending
When Logan Allec graduated from college, he was stuck in his financial mess. At the age of 21, he was more than $35,000 in debt (more than 800 million VND), had no car and zero balance in his bank account. The little money he earned after college was used to pay for rent and student loans.
Allec recalls one morning sitting in his room thinking about his life in the future. In the end, he didn’t want his life to stay the same in the future.
To turn the tide, Allec focused on increasing income and cutting costs. To earn more money, he worked overtime as much as possible.
He also decided to move in to share a room with three more people, which reduced the rent to just $275 (VND 6,300,000) a month.
Instead of eating out like before, he tried to cook at home.
By the time he turned 22, Allec had more than $10,000 in his savings and investment accounts, and added $2,000 to his balance each month.
Work hard like ants. Illustration
2. Start small
When Jon Dulin became interested in personal finance, he read books and blogs about finance and listened to podcasts on the topic. He did so because he wanted to understand how people build wealth so that they can choose to work or not to work.
However, Dulin found that all financial experts say the same thing: Start with saving money. But he was always skeptical because he didn’t think it was really that simple. And according to him, there is definitely a secret that no one is willing to share. And despite advice from financial experts, he started investing money in a 401(k) retirement fund at his workplace.
(A 401(k) fund is a retirement fund in the US run by businesses. If companies don’t have it, employees cannot open a 401(k).)
He has saved 20 dollars (more than 400,000 VND) per pay period. I don’t think they’ll get anywhere because there aren’t too many.
But in the end, he was surprised, by the end of that year, he had almost $1,000 (over VND 200 million) after growth and dividends. By the end of the second year, he had made $2,000 (about 450 million).
He realizes it’s as simple as that and now, he’s looking for every possible way to save money, even if it’s 5 dollars (about 100 thousand) and he believes that money will grow bigger and bigger.
You always think a few bucks won’t be much, but remember the rule of small to large. Illustration
3. Have a plan
A few years ago, Todd Kunsman was stuck in an apartment he couldn’t afford, in addition to paying for a car and two student loans. Even worse, he was fired a few weeks before Christmas. This leaves Kunsman with only a few dollars a week in his account to accumulate.
He started focusing on reading books, following blogs and listening to podcasts to learn more about finance and investing. He realized that financial literacy was essential to him. And while there’s a lot of information out there, it shouldn’t be difficult once you’ve taken the time to find out.
To date, Kunsman has invested more than $70,000 (about VND 1.6 billion), eliminated 95% of his student loan debt and paid off the car installment payment. In addition, he is maintaining a savings rate of 65% of his total income.
Kunsman also applies the first mindset of needing to pay yourself. Every time he gets paid, he spends 1% on his retirement and savings.
To maintain consistency and avoid overspending, he suggested auto-saving in his account (the bank will automatically deduct an amount you confirmed each pay period, the amount This is automatically transferred to a savings account).
“Even if you can only save a few dollars a week, at the end of the year you will be amazed at your progress. We all have to start there,” Kunsman said.
No matter what you want to buy, always plan for it. This will help keep your finances on track and help you achieve your goals sooner. Illustration
4. Track your spending
Camilo Maldonado grew up in poverty and was never taught how to manage money at home. But when he got into college and had to deal with money and handle his finances, he started using a money management app to track spending. After knowing how much he spent on everything – dining, entertainment, travel – he changed all of his habits.
When he graduated and got his first job, he felt comfortable with life within his means. That experience in college fundamentally changed his attitude.
If you don’t keep track of where your money is going, you’ll never be in control of your personal finances. You also don’t have to use a fancy program if you don’t want to. You can start with a bank statement, credit card, and a blank sheet of paper. Just simple as that.
Don’t underestimate money management apps. Take time each month to review your bills, household expenses, meals, shopping… and make adjustments to better money management.
Are you ready to improve your financial literacy? Even if you don’t feel like you know enough about money matters, you can still learn from these great tips and do it today. In return, you will gradually move towards the goal you set.
at Blogtuan.info – Source: Kenh14.Vn – Read the original article here
