The personal finance is an essential skill to manage properly the world their savings. There is no doubt that the ways to succeed in this ‘field’ are valid for everyone. Indeed, those who find it difficult to save money and want to succeed can follow some advice, valid for all people, in every part of the world.
What is the definition of Personal Finance?
First of all, let’s be clear: what are we talking about exactly? If finance in general is the economic discipline that studies investment processes and choices, personal finance is the set of financial decisions made by a single subject (understood as an individual or family unit) with regard to credits and debts, from the opening of a mortgage to the complementary pension choices, up to the investments in the buildings. The other types of existing finance are corporate, public and international.
Personal Finance: Our definitive guide to effectively managing your money
Create a routine
If you don’t trust yourself with regards to meeting deadlines, the easiest way not to delay is to create a routine, for example by paying bills on the same day of the month. To make things easier, moreover, it is always good to note the deadlines and the various obligations to be fulfilled on a calendar, which remains clearly visible.
Establish a budget
It may seem obvious, but it is good to remember: if we can’t save money, it’s because we spend too much compared to what we earn. In this case, the advice is to establish a monthly budget, which does not provide for any derogation. Unless there is an increase in salary.
Search to use cash
Paper or cash? Those who want to save money should always prefer the second form of payment. Presenting yourself at the cash desk with cash, in fact, allows you to understand what we are actually spending, because seeing the empty wallet materially keeps us more in check than some harmless swiping of the paper.
Reasons in percentage
According to personal finance experts, to save money we can divide expenses into percentages compared to our budget. An example? For the pleasures of life (dinners, cinema, travel) we should use up to 30% of the money available. And immediately put aside, perhaps in a secondary account, 10% of the proceeds.
Use a mantra
When you’re not sure whether to spend a certain amount or not for a certain purchase, think about what you really want, what you’re really saving for. In short, to avoid falling into temptation when you enter a store, you can repeat yourself: “Is this jacket / watch / pair of shoes or that trip to Japan better?”
Save help save
For most savers, the ultimate goal is to buy a home. To be able to achieve this dream, the experts explain, you can train with small goals, reachable in a short time. How to manage to set aside a certain amount per week, slowly raising the bar (and the bank account).
Union makes strength
There are people who are unable to go to the gym if not with a friend, because it is only by force of each other that they manage to find perseverance. Why not start saving money together with a friend (or more friends) then, perhaps by organizing monthly dinners to discuss the goals achieved?
Assess every purchase
We often struggle to save money because we buy too many things. Which are often useless. Here, whenever we have a doubt whether to make a certain purchase or not, we try to understand if it really is worth it. A blender for example can be useful for nice centrifuges, but if in the end we always have breakfast in a hurry, when will we use it? A good tip is to try to think in terms of euros for hours of use.
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A friend, as mentioned, can save you money. Provided you don’t take it with you to go shopping: in fact, it’s better to go there alone, because this makes it easier for us to make ‘painful’ choices (like leaving those pants in the shop that look great on us but are too expensive).
You decide the increase
An increase is always a pleasure. But the amount in question must be consistent with the position, your skills and the contribution you give to the company. Being underpaid, even slightly, in the long run has its effects. Therefore, let the company itself take the first step, because otherwise you risk proposing a figure (often unconsciously) to the downside. Wait to hear what they propose to you. And, if you’re not satisfied, try to raise.
Yes to insurance
In the end, the hope is that we will never need to use them. But taking out insurance is a great way to cover yourself in the event of an accident. Beyond the superstition, a life insurance is also a valid way to protect one’s family unit.
Think to invest
Difficult to establish when it is appropriate to stop in liquid savings. There are those who prefer to continue to do so, but according to experts, it would be enough to have the equivalent of nine salaries, to face emergencies. In short, from a digit card up, the advice is to invest.
Separate the accounts
The ideal would be to have a current account and a deposit account with two different banks. In this way transferring money from one part (deposit account) to another (current account) will be more difficult. And savings will benefit.
Informed on an integrative pension
If you are not sure that the pension promised by the social security fund may be enough, given that it is destined to fall every year that passes, you can think of informing yourself about a supplementary pension, able to provide a monthly plus of one once the retirement age has been reached.
It is never too soon
We talked about retirement, referring to reaching a certain age, but it is good to remember that it is never too early to start saving or, at least, to spend with conscience. It’s a bit like going on skis: those who start as young learn to save more easily.
Being able to set something aside, successfully managing your savings and successfully investing money are key skills to improve your life and that of your loved ones. The personal finance is the perfect tool to do this and is the main mission of the Personal Finance magazine.
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