How To Save Money Without Denying Yourself In Anything
Posted By tsauthor on January 24, 2011
Few people know how to properly plan the budget. Not only those, who receive little, have not extra money till salary, but this happen with the people whose income is more impressive.
The whole point is that in the money management most people have no system. Here we will reveal some secrets of the proper disposal of finances.
As an ordinary people we know how best to spend our income. But how do economists understand the term “planning of personal finances??
It is first of all assessment of your financial situation and creation a system of protection against any risk of life. This system includes the preservation and increase of the savings. And, of course, with the option of deductions for the future – the so-called pension schemes. Three main factors in planning are time, money and interest.
The next question, we are interested in is how to dispose the income best?
After you get your income, it is best to split the money into 3 baskets immediately. If you do not do this, it would seem that you have a lot of money, you take them out without looking, and there is the risk to remain without any means. The classical approach assumes that 70% of income is the cost of living, 10 – for help to relatives or charity. The remaining 20% are going to the accumulation, i.e. the making of the fortune.
The last sum should be divided equally: one piece – to pay off debts, the other – for large consumer purchases, and capital. Capital, in turn, too, should be divided into three baskets. 20% can be invested in profitable business, 40 – go for financial security (buying stable securities or health insurance), and another 40% – funds for a rainy day.
Of course, this option is suitable for more or less wealthy people. If incomes are not high enough, is first to fill the basket on a rainy day, and only then proceed to attachments mentioned above.
In the basket for a rainy day may be not only money but also any tools that keep the cost – diamonds, real estate, antiques, and precious metals. That is minimally risky and highly liquid instruments – such as gold bullion. They can be left in the bank and earn, as gold is now more expensive because of the instability of the dollar. In any case, it will remain in price and in the future.
If a person has already paid off all the debts, so there left those money, which were meant for the third basket, so he should allocate that sum as the initial income: the ratio of 70: 10: 20 for current consumption (not to indulge in something), charity and accumulation (large purchases). If a shopping cart and living expenses are already filled, free money is usually sent to the capital.
World crisis has made lots of people look around for various ways to save money and saving money expert. Another part who already earned some cash and would like to make more, no doubt might require mutual funds investment advice. Moreover, financial planning might be of great interest to young people as they need to manage with many things in their lives, and here financial advice for young people site may help them.
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