I want to be honest. Math was never my favorite subject.
Fortunately, the clever Money management not all about mathematics.
This part with the math is even relatively simple.
Spend less than you earn… and start investing early.
This is the basic formula that will make you rich in the long run.
The numbers are not the problem. The psychological and emotional hurdles are what keep most people from achieving their financial goals. But there are ways and means to get around these hurdles when it comes to money.
The following 5 strategies for better money management will sharpen your financial mindset and lay the foundation for your financial freedom.
- 1 Better deal with money
- 1.1 1) Do I really need this?
- 1.2 2) Automation is the key
- 1.3 3) Perfect is the enemy of good enough
- 1.4 4) No excuses
- 1.5 5) Retire early
Better manage money
Becoming rich is basically not hard at all.
The fundamentals of prosperity have been well documented for centuries. So stop looking for shortcuts and forget about get-rich-quick methods.
Instead, focus on the simple things that work and that your parents taught you back in the day, like z.B. Don’t spend more money than you earn.
I recommend at this point the book "The Richest Man of Babylon" by George S. Clason’s. This is a real classic in money management and highly recommended.
Let’s get to the first one Tip for better money management.
You should ask yourself with every major purchase or always before you buy something…
1) Do I really need this?
You won’t automatically be happier if you work more to afford more things. Because there will always be more things to buy.
Getting out of this money management trap is easy:
Learn to be happy with what you have.
You can have everything you want, but not everything you want you necessarily need.
It doesn’t have to be the latest iPhone every 2 years. You won’t be a happier person if you throw your money out the window every month on unnecessary things that you never use anyway.
Reduce your spending on the things that don’t matter, so you can consciously spend your money on things that really enrich your life.
You love antique airplanes? Great. You don’t care about cars? Then don’t spend more money on it than necessary&
2) Automation is the key
The biggest enemy in saving and investing is YOU.
How many times have you resolved to put a certain amount of your paycheck into your reserve account each month? Or how many times have you made the decision to finally invest in an ETF savings plan to provide for your retirement?
The first 1 or 2 times you might think of transferring the amount to your savings account or putting the money aside in cash. But in the long run you will never get Perseverance Have or have the discipline to become financially free and build yourself a fortune.
So take yourself out of this equation. Automate your finances, your savings rates, your bills and your investments.
Set yourself up for your Savings rates several standing orders with your bank. I set up several standing orders and automated my finances as much as possible. At the beginning of each month these standing orders are executed.
The whole thing then looks like this…
- At the beginning of the month my salary comes to my private account (since I am self-employed, I pay myself a "salary" every month from my business account to my private checking account)
- 10% of my income goes directly to a Per diem account (Reserves for unexpected expenses and emergencies)
- 5% of my money goes to another Per diem account (to build my financial protection and money magnet)
- 10% is put by standing order into an ETF savings plan at comdirect* invested
- 5% will be paid by standing order into my account at Auxmoney remitted
- 5% I transfer by standing order to the social trading network eToro* where I copy the most successful top traders
- 5% of my money I invest in real estate projects at Exporo*
This saves me a lot of time and unnecessary work.
And since my money is divided at the beginning of the month by standing orders, the risk that I buy something stupid that I don’t need with all the money that would otherwise be in the account is reduced.
3) Perfect is the enemy of good enough
Too often we fail to act because we are looking for the absolute, surefire way to invest or save.
We do nothing instead.
The important thing is just start. You don’t have to have the most sophisticated stock portfolio or study the latest chart analysis. It’s all about trading and first step to your financial freedom to go.
A small return or yield is always better than nothing at all.
I recommend you start with a simple ETF savings plan to start. And how to get your finances under control, I have already described in detail in the article series.
Don’t make it too complicated and just start deepening your knowledge about making money, saving money and passive investing. Read the most important books about money, finance and wealth. learn how to successfully invest in stocks or create an ETF savings plan.
All the important Tips and strategies in dealing with money you can find here on this blog. It’s up to you.
4) No excuses
To whom you give the blame, you give the power.
Don’t blame your parents, your friends, business partners or politicians for your financial situation.
Your circumstances may not be entirely your fault, but they are your responsibility.
No one cares about your money more than you do. So don’t wait for someone else to tell you how to save or invest your money. Or get rid of your debts.
Only you have the courage and knowledge to run your own business. Do the same with your finances.
5) Retire early
If I can only give one piece of advice, this is it: Increase your savings rate.
Most financial gurus and experts advise you to save 10 percent of your income as a.
Dear reader… this is unfortunately not enough if you want to become rich and financially free. If you want to retire early, you should save 30 to 40 percent of your monthly income on the side, better yet 50%.
Save 1/3 to 1/2 of your money every month in a seperate savings account and your retire early will become reality much sooner. Not only because of all the money you are putting aside, but also because of the simpler and more affordable lifestyle you will live to save so much money.
Instead of 100.000 euros every year in retirement, you need so only 50.000 euros to cover your costs.
Bingo: You just moved your pension up a year&
Do you have any other tips in dealing with money?
I would like to hear your opinion about this article. Just drop me a comment below this article.