10 Top Facts Everyone Should Know About Money
Monetary rules may be simple, but they are not always easy to follow. If you want to get rich, you must constantly work on your money habits and rethink your relationship with money. Here are some of the best personal finance tips we’ve shared over the years that everyone should learn or retrain.
10. There is no one size fits all
Despite the confident title of this post and the advice we share so confidently below, let’s start by saying that personal finance is, in general, personal. The rules of thumb do not apply to every person in every situation, and even experts cannot agree on many things, such as whether to pay off your mortgage ahead of time or whether to use credit cards . Sometimes the rules of thumb given as advice are really useless, such as when you tell someone to just “spend less than you earn”. For example, when you are broke, you may have to ignore a lot of financial advice that will be bad for your situation. And even people who make the same amount of money will have different budgeting strategies and financial goals, as this profile of three people with three salaries shows. So listen to advice about money, but adjust as needed depending on the situation.
9. Some monetary rules never go out of style.
However, there are some personal finance fundamentals that everyone would benefit from learning, especially if the topic is not taught in schools . The most important personal finance rules are not changed – including the most basic truth about the fact that you need to have a gap between your income and your expenses , regardless of whether you spend less than you earn, and earn more than the spend (the same thing, but a subtle difference in perspective). Here are 10 good financial rules that you can use as benchmarks.
8. Money can buy happiness (but it all depends on what you spend it on)
Money is a means to an end. While he cannot buy you love, he can buy you happiness – if you prioritize your spending on the right purchases , such as gaining experience and helping others. When deciding where to spend your cold hard-earned money, pay attention to the purchases you will be spending the most time with .
7. You need a budget
A budget helps you understand where your money should go; without it (or without tracking), you might think that money just disappears from your wallet. If you’ve never created a budget before, here’s how to do it . This is an important step, even when you’re broke . Once you’ve set up a budget and tracked your spending, you’ll find what you spend the most money on (we have general spending categories , food in particular ). Give each dollar a goal and it will be easier for you to reach your financial goals.
6. Money management will become much easier if you automate your finances.
Even with a budget and a great plan, the truth is that human nature confuses us when it comes to money. However, automate your finances and you can be tricked into saving more, avoiding temptations, and spending less time managing your accounts. You can save money without even trying ! Here’s the infographic .
5. Always negotiate your salary.
Is always. The biggest mistake in salary negotiations is not to . Don’t be afraid to negotiate as if your prospective prospective employer might see you as a money-grubber – hiring managers actually expect this from job seekers and incorporate it into their sales pitch. If you don’t negotiate a salary, it could cost you $ 500,000 over the course of your career. So here’s how to negotiate a salary .
4. Protect your credit
Your credit history and credit score may not seem as simple as managing your cash, but credit is both a powerful tool and a valuable asset. You use it to buy homes and cars, and to qualify for lower insurance rates and get jobs. Here are 10 ways you can immediately improve your credit score , how to check your credit score , how many credit cards you should have, and how to make sure these credit cards are protected from identity theft .
3. How we think about money is the main thing that changes the rules of the game
Personal finance can be a numbers game, but how we think about money determines how well we play it. We’ve learned that even a little gratitude can improve spending habits and that it takes work to beat the scarcity mindset (or the fear of being poor). We have to delude ourselves to save money because we often hesitate between feeling rich and poor, feeling frugal and wanting to spend. In fact, the greatest money hacks are mind hacks .
2. The sooner you start saving, the better.
This is what we probably all intuitively know, but only when you witness the power of addition and that time is your most powerful asset when you are young, you know, heck, I should have started saving yesterday (or in the past). year or the last decade). According to Warren Buffett, giving up the habit of saving early is the biggest monetary mistake we make . (Take a look at this retirement savings chart if you’re unsure.) However, it’s never too late to start saving . You can still catch up . Here’s what you should know about saving for retirement , including our beginner’s guide to investing .
1. Studying money is an ongoing process. Keep learning from others
Finally, going back to tip number ten, your financial situation will change – and it will continue to change. The financial environment will also fluctuate. Be open to new advice and regularly question your monetary assumptions. Other people’s experiences can help, too. These are the most common money mistakes people by age group make and the stupid money mistakes I made when I was younger . We also recommend purchasing a solid book or two on personal finance, such as I’ll Teach You To Be Rich, which is reviewed here . If you still haven’t learned how to manage your money, don’t worry, we’ll tell you about it in our basic guide .
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