5 Must-Learn Money Principles This 2020
Not only is it a new year, but it is also the turn of a new decade. Most people are making resolutions revolving around money, looking for stock tips or studying the movements of the market. But if you want to succeed financially this year and for the long-term, these are the wrong questions to ask.
You want to learn solid financial money principles that will teach you how to effectively manage your money and keep building your wealth.
1. Spend less than you earn.
This is not a groundbreaking financial tip, but the majority of the population is not wealthy because they cannot seem to follow this simple money principle. Spending less than you earn is not about being stingy. This is the result of avoiding unnecessary shopping.
Put your focus on earning. The more you earn while keeping your spending the same, the bigger the savings you create for yourself.
Nobody became successful in finance without budgeting. You do not necessarily have to implement a detailed budget, focusing on categories is enough. Have one for housing costs, transportation, food, savings, debt, and any other category that is relevant to your life. This will allow you to see where your money is going.
If you want to save more, determine how much money you wish to save every month and live on the rest of your income. As long as you meet your savings target, it does not matter how much you spend on everything else.
3. Watch out for fees.
4. Examine your three biggest expense categories.
It is the same for most people: housing, food, and transportation. If you can reduce these costs, you will immediately create more room in your monthly budget.
5. Automate your savings.
Every time your paycheck comes in, set up automatic payments to your savings accounts, retirement accounts, and debt payments. The more you can automate, the better your chances of sticking with your money goals!