The Best Savings Trick Ever!
How many times have you financed your expenses with money you borrowed? Countless times right. Like when you needed to pay rent and you didn’t have all the money or when you paid for that fine car of yours and you had to borrow some more money to make up the whole amount.
Check this out: Have you ever gotten a loan from a friend or family strictly for the purpose of saving it and then worry about creating the income to pay back the loan? I reckon you’ve never done this!
I tried it this month and I ended up saving more than I ever did since I started my quest to financial freedom in August 2010. I call it “putting your tomorrow ahead of your today!” I did not only successfully save my minimum of 20% but I was able to squeeze out of my income the sum to pay back the loan. My urge to earn more was very high as every passing day I had to worry about how to create the income to pay back the loan.
I’m going to try it in February too. This should be easy for you to implement as a lot of your friends have money they have saved that they are afraid of spending and will be willing to give it out as a loan only if they are sure of getting it back. It’s a win-win situation. You not only increase your savings and improve your ability to earn but you also get to improve your credit rating with your friends. When you take a loan and payback as at when due chances are that such a person will be willing to lend you more money in future if he or she has the funds at their disposal.
However, if you have a hard time earning the income to pay back, do not hesitate to withdraw it and pay back as at when due. That way you improve on your credit rating. But I can assure you, you’ll earn it. Please don’t try this out if you haven’t successfully gotten a mastery over your urge to spend. But if you think you can weather the storm… then go ahead.
Golden Rules of Personal Finance
Golden rules of personal finance
One of the positive aspects of the recent financial crisis, is the rediscovery that many people have made saving and multiple benefits. No matter if it is experiencing a situation of economic constraints, or has a thriving period of expansion, economic solvency and the saving should always be present as the starting point of any plan or budget.
But not always work well. For various reasons, it is common to lose the north and make mistakes in how money is handled, so when starting a new year is helpful to make a recovery plan to put personal finances in order, attending to some rules basic, with discipline and common sense lead to the success of this purpose.
1
Determine what your true financial position
This can make a simple relationship that reflects the following:
* Income (wages, investment income, business)
* Expenses (food, housing, services, includes all the expenses)
* Results: Set a period, for example, the last six months, total income and subtract expenses
Then prepare a personal balance pointing assets (investments, bank accounts, property), liabilities (mortgages, loans, credit cards) and wealth (assets minus liabilities). Review the information obtained with objectivity to know where to make cuts and adjustments. Ideally, the resulting figures are positive, otherwise it is losing money and risking stability.
2
Create a budget
This should be as realistic as possible so that you can stick to it and fulfill it. Not have to be complicated, can be guided by the advice and worksheets that provide some specialized sites on the web. With the income and expenditure in view, it is easy to set limits on money management.
3
Set your goals
Now, you have everything you need to chart the way forward, knowing that should increase income and investments, pay off debts and reduce costs. The important thing here is to set measurable objectives, measurable and time bound. For example, set goals every quarter, revenues increased by 20%, cut costs by 30%, fully repay an account.
4
Draw a plan of action
Here note down the ideas that occur to you to achieve the objectives. For example, start looking for a new job, or any other source of income such as consulting, teaching, a small investment that will generate immediate profits.
Also note down the steps to save, with actions that are part of the routine, and can be done more economically: start bringing food to the office instead of eating out, limit the outputs of fun changed for distractions Home, jog or walk in the park instead of going to the gym or subscribe to a plan of saving gasoline.
5
Commit responsibility
When you set a goal, the person is posing a challenge to be overcome at all costs. It helps if you share with someone you trust, who can review the progress or failure periodically. Whether the case of the couple, friend, partner or co-worker, the idea is that this person can make contributions and called attention to help maintain the course set.
6
Start paying debts
To heal the economy is a priority to begin paying the outstanding debts, even if with small repayments, while achieving increased revenues. It seems obvious, but it is amazing the number of people who have high debt and intend to hold savings, whose rates are negligible compared to the interest paid, for example, credit cards.
In short, you can not invest or save money without paying off debts. Review your finances, set priorities, make a plan and follow it with discipline, and soon begin to see the results.