Financial Wisdom That Will Change Your Life
Day to day, our lives come down to working, eating, sleeping, and, if we’re lucky, spending some time with the ones we love. We talk about money a lot, about how much we earn, how much we would like to earn, but we rarely truly think about finances – how they are affecting our lives and if there’s wisdom out there that we can use to change our situation.
Well, we sat and thought for a long time about the most important financial advice we would love if we knew them before, and we decided to share it with you.
These are small and simple pearls of wisdom that will help you manage your finances.
When you start your marriage, do it by living on just one income
When you get married, even if you are both employed full-time, don’t spend it all. Try hard to live on just one of your salaries and put the other one into savings.
How will this help? Well, after a few years, with those savings you two will be able to buy a new car or put a down payment on your home. Also, if you have a child, and you are already used to living off of one income, one of you can stay at home with the child, and your lifestyle won’t suffer at all.
Buy cars with cash
It might sound silly, especially when banks have such great payment plans, but read this through before you dismiss the idea. So, your old car broke down, or you are buying your first car ever? OK. Whatever you have saved, make that your budget for the vehicle, even if it is a relatively small amount of money.
After you buy a car with that money, instead of paying the bank monthly for the car you are driving, pay yourself for the car you will be driving in the future. Whatever you thought you could pay monthly for a car, place into a savings account. So, when your next vehicle dies, you’ll have a bigger budget for the new one, and then you will repeat the cycle – this way you will be able to upgrade vehicles really quickly over the course of your life, and you will never have to worry about owing money to the bank.
Forget the monthly budget and use a spending plan
Did you try to use a monthly budget and you went insane because you had to keep track of every dime you spent, and still you somehow spent more than you had and bought stuff that you will never need? So did we. For people like us, it is much easier to make a spending plan.
So, you put down a number – your monthly salary. Then, you subtract all of your fixed monthly costs – electricity, phone bill, transportation, food, water… Then, you put aside a small amount for emergencies. The money you have left is your free-to-spend monthly income. Now that you know what that number is, you can decide what you would like to spend that money on, and it will be easier for you to stop worrying if you forgot about something.
Never let money control you – never take a job just for the money it brings
Even though sometimes it may seem that everything in life revolves around cold, hard cash, it doesn’t have to. So, when you are looking for a job, never let the money be the deciding factor, but factor it in. Consider it. A job that doesn’t pay enough, or a job that is asking for too much from you will in time add a lot of stress to your life, and it will keep you from doing the best job you can do. So, think about your strengths, your talents, and how they will be best utilized, and what you will be comfortable with before you decide on a career course.
Do you spend too much on your car/house/entertainment?
Most people who spend more than they make, have one of these three things. In general, if you are having trouble living within your monthly income, check how much you are spending on your car, your home or your entertainment (tickets, trips, eating out). If you keep those three modest and in check, your paycheck will always be enough to cover all of your expenses.
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