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Ellaella
Five Money-Saving Skills You Need To Master
~2.2 mins read
You cannot save your money just by accident. On the contrary, this act requires effort, practice, and the understanding of some money-saving skills to help you reach that point. With these skills, you can keep track of your money, spend less, and save more.
By acquiring these skills, you will not only become wiser economically, but also self-sufficient during the time of rising costs.
Here we talk about the 5 simple skills that you need to master today to save your money in the coming times.
Deal Hunting: The most important skill to save money is deal-hunting which involves searching for shops with the best deals and comparing them.
A deal hunter aims to compare different stores for the same deals to see which has the best prices. If you want to buy things, wait for the sale. Also, spend some time understanding the store discounts and sales cycle to make the most of your shopping.
Couponing: is a basic money-saving skill that aids in limiting spending on everyday items. It is different from deal hunting and needs focus and dedication.
Using this skill, you can cut the amount you pay for items you need to buy by searching online and looking for deals to take advantage of. When you start using coupons, you may be able to save even more money. Attend a local or online class to learn more about couponing.
Handling Finances Yourself: You can also save money if you learn to tackle your finances responsibly. It will help you avoid paying interest on your credit card debt, unwanted bank fees, and invest rightly.
If you learn to understand financial documents, you can determine if you are choosing the best checking account. Handling such tasks make you aware of your present financial situation and can help make better choices generally.
Learning DIY Tasks: There are many household tasks that you can do easily and save a considerable amount of money. Learning simple maintenance skills can save you money when it comes to changing your car oil.
You can learn how to cook and save money anywhere from $5-$8 on a meal per person. Also, you can learn to sew your clothes or how to take care of your lawn to save big money. Consider taking automotive repair, cooking, or basic sewing classes to learn how to master these skills.
Understanding Investment: Getting the idea of investment and how it works is really important as it enables you to remain proactive about your retirement and general investment plan.
It is also helpful in letting you know when to be concerned about fluctuations in the market or get through the rises and falls. Once you acquire an understanding of investment, you may save money by buying the stocks yourself through a brokerage company with low trading fees. Don’t forget to consult with a financial advisor regarding planning for your long-term savings and investments to make a plan helpful for your timely retirement.
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Ellaella
MONEY MANAGEMENT IN FOREX TRADING.
~6.0 mins read
Forget everything and focus on one thing: MONEY MANAGEMENT
In this blog post, I would like to address one of the most important factors, habits, plans, or whatever you fancy calling it. It’s the topic that you would rarely see people discussing it, and even people who do discuss it, hardly ever practice it and that might make you wonder at times whether the topic of money management isn’t a sacred practice.
Have you ever thought about getting better with your money? If you have ever wondered how rich people manage their money as I have; or maybe you do not come from a wealthy family like myself but want to become wealthy, then this blog post might be just right for you.
We are talking about acquiring wealth by creating a system that we will constantly improve and follow with discipline. It is a set of basic rules that we create and follow, which will eventually lead to a set of habits that will create wealth for us in the long run.
Needless to say that a proper money management system is not only important within your personal finances but it is twice as important when it comes to Forex Trading. In this article, we will focus on the very basic aspect of Money management and that is the money management in personal finances.
MONEY MANAGEMENT IN PERSONAL FINANCE:
Let’s start at the beginning and learn what money management is. Although it might sound like rocket science to some, managing money in your personal finances is actually very easy and helpful as it incorporates some basic habits that will put you in the position of most of the wealthiest people in the world.
With that being said, let’s dive into the importance of money management in your personal finances.
Have you ever wondered why you lack cash at the end of the first week after your first paycheck? Do you find yourself short of cash when it is really needed? Well, guess what, it is the lack of money management that puts you in those uncomfortable situations. Moreover, with a good money management system, you will be able to manage larger amounts of money once you acquire it. How do you want to manage a million dollars when you can’t even manage a few hundred or a few thousand dollars, right?
PLAN YOUR BUDGET:
Needless to express the importance of your Budget. It basically teaches you how to distribute your income into aspects of your life. In the long run, once you master the skill of budgeting, you will also master the skill of distributing the money, and eventually, it will lead you to better decision-making when it comes to Investing. Complexities aside, let’s focus back on the basics of budgeting.
As the rule of thumb, and according to Investopedia, as well as many other Financial planners, Investors, Entrepreneurs, and Financial gurus that I have encountered, they all mentioned the rule of 50/30/20.
50% of your net income is devoted to your living expenses. The things that you cannot live without such as housing, food, electricity, transportation, etc. Basically all the basic needs for your survival.
30% goes to your hobbies, lifestyle, entertainment. Basically the things that make you, you. Things that differentiate you from others.
20% is devoted to your future that includes saving for retirement, paying off some debts, and for emergencies.
To help you get better managing your personal finances, with the advancing technology, there are numerous applications that allow you to precisely track your finances.
EMERGENCY FUND:
As you go along you will find that you have already created the emergency fund in the first step, however, this is actually where all the fun begins. It is said that an emergency fund should be enough to cover up to 6 months of your living expenses. Imagine an unpleasant situation that would occur and you might lose your job, and all of a sudden that would immediately affect your net income. With the recent example with the Coronavirus, people who have already established money management before the Health Crisis, should be well off and secured during the pandemic as they certainly have the Emergency fund to cover the difficult times.
Moreover, if you have already devoted enough for the emergency fund, keep going. As I said, this is actually where all the fun begins. Once you have secured your finances with a sufficient amount for emergencies, keep devoting 20% of your net income further for savings.
GET RID OF DEBTS:
Getting rid of your debts is good because just as your savings have compound interest, your debts have (most of the time) an interest rate too! However, it is important here to distinguish the good debts from the bad debts. Now you are wondering how debt can be a good debt? Well, good debt is a debt that generates income for you. The important keyword to be remembered when it comes to a good debt is an asset. So imagine you had an opportunity to take a loan from the bank to buy a house on mortgage or leasing and you would use that house to rent out to people and you would acquire some kind of return on investment. That is considered good debt. A debt that would eventually lead to a capital gain over time.
Bad debt, on the other hand, is a debt that takes away money from you that you will never see it again. Basically any type of spending that doesn’t create any value in terms of return on investment but rather eats-off of your cash. The important keyword for it is a liability. It is your credit card, your car, things that require maintenance fees, etc.
PLAN FOR YOUR RETIREMENT:
Once your investment runs steadily and you would acquire more money, or you might not necessarily acquire more money but you will have a habit of putting aside 20% of your net income, it is then up to you to decide what you will do with that money. Whether you decide to invest further into stocks, in education, or just simply securing a future with your spouse, that is purely based on your decision. However, if you don’t know what else to do, you can plan your retirement. There are plenty of options on how you can secure your retirement, but the most important thing to remember here is compound interest. I will not dive deep into this topic, but long story short, it is basically interest on an investment that already has an interest in it.
HAVE SOME FUN:
Last but not least, go out and have some fun from time to time. It is important to reward yourself with the fruits that you have taken the effort to acquire to keep you motivated. Understanding that we are humans is crucial and as robots need maintenance from time to time, we need a break as well. So go spend some of your hard-earned money on that new suit, watches, or whatever you fancy.
THE FINAL NOTE:
In this article, we have covered the importance of money management in real life. Money management is nothing else than a process of planning, budgeting, distributing, spending, and saving a person’s finances. It is important to incorporate these habits into your daily life in order to achieve your financial goals in the long run. If you are not born into a wealthy family (like me), or if you are not married to a wealthy family (like me as well), chances are you will need to implement money management eventually.
As you have noticed, money management is a nice theory for creating wealth by distributing your finances correctly into different jars. However, in order to consistently follow the set of rules you have laid out, it will take you a lot of discipline and self-awareness.
The good news is, by focusing on money management you can potentially eliminate some of the psychological barriers such as emotional attacks. Moreover, Psychology decides 80% of your success rate especially when it comes to Forex Trading.
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