Since the money is just with many families due to the Corona crisis is tight, and also on my Instagram channel more and more frequently questions around the Save money reach, I have times my Blogpost with our concrete tips and experiences revised.
The back story: When the dreams are bigger than the bank balance
There are phases in life when the Money is not enough for a variety of reasons I know pretty well what I’m writing about, because when my husband and I met, we really(!) little money. I was still in school, my husband was in training, and after deducting all the expenses, in some months we only had approx. 200 DM (thus 100 € ) to live. Even if the situation was not easy at that time, I must say that in retrospect this time was quite good for us.
We inevitably learned during that time:
- Set priorities (1 Starbucks coffee = 1 home-cooked lunch for 2)
- Defining goals (What is really important to us in life??)
- Our dreamsStep by step into reality.
The beginning was the decision, to take responsibility for our finances. Over the years, we have thus not only managed to balance our overdrawn accounts, but almost exactly 12 years ago, despite a initially really low family income fulfilled the dream of owning a home – and that, without having to other things like vacations to do without. How we did it, I would like to explain to you today step by step.
The basic requirement for financial independence: The desire, to take responsibility for my own finances!
In the last few years, I have made the experience that many people have a interesting relationship to the topic of money have: The desire for a lot of money While often high on the personal wish list, at the same time the topic of money is annoying / stressful / overwhelming for many people in their everyday lives So much so that they shy away from dealing with it intensively. The true dreams (z.B. a trip around the world, a house in the country etc.) are ignored because they seem unattainable anyway, and replaced by Compensation purchases Or replacing filling out a lottery ticket every week. The result: the years go by, the account is empty at the end of the month and you don’t really know why. The problem:
As long as you suppress the topic of money because it stresses you out, overwhelms you or annoys you, nothing will change! But as soon as you start to see through your finances, everything changes. I started, for example, at that time to consider the conscious handling of money as a personal challenge that makes it possible for me to do so:
- my Lifetime overall better use
- to have more time for my family
- financially more independent to be
The thought, that we pay for everything we buy, in principle, with our lifetime, since we have to invest it first to earn any money at all, changed my attitude a lot and led to the fact that we spend our Have significantly reduced expenses. We stopped spending money on things we didn’t really need and really questioned EVERY expense (from folding chairs to lattes).
In Japan this method is known as Kakeibo known – but more about that later. The low expenses have led us to from year to year more money available had and also in unexpected situations (z.B. Job loss) did not have to panic. Interestingly, this did not feel like abandonment. On the contrary, we have enjoyed the opportunities that have resulted, such as.B. our trip around the world in summer 2019 , enjoyed very much.
The key to success: Low spending!
Why it makes so much sense to also staying as modest as possible for now as our income increases, you can see in this very simplified graphic. You see here income, which increases over the years (black line) and expenses, which are 1 x oriented to the income (red line) and 1 x relatively constant (blue line). The area between the respective dotted line and your income is the money that is available to the respective family in the month.
My definition of rich = when you have permanently more money available than you need to be happy!
7 concrete steps to take control of your finances
So, now I have told enough about us. The following 7 concrete steps, which help you to be Financial topic in the shortest possible time to finally get a grip on it. All you have to do is work through the following points one by one:
- What do I spend my money on?
- Track down savings potential!
- Start with the reduction of fixed costs!
- Reduce debts!
- Understand and change your own consumption behavior!
- Saving in everyday life!
- Start with asset accumulation!
Step 1: What do I spend my money on??
To find out how much money you can save per year, you first need to take find out how much money you spend. The easiest way to start is to sit down quietly and make a List with your expenses created. After that, it makes sense to spend a month (or at least a week) on a Budget book to keep. It’s a pain in the ass – but it quickly makes it clear where your money ends up and where the Saving potential the biggest is. Important: Do not forget the expenses that are only 1 x per year or. quarter are debited.
I have simply created one for this purpose List created (> here go to the free form). If you would like to know more, you can also use an app (e.g., a web browser).B. financial guru)! Certain data about you is collected in the app, but if you currently feel that way from the financial chaos feeling overwhelmed that you don’t even know what all is being debited from your account, what contracts you have, and where or. how you can start, this app is a real help. In any case, I am satisfied and have received positive feedback from readers several times.
Step 2: track down savings potential!
Now that you know what you’re spending your money on, it’s time to pull out the red pencil and start cutting back mark all the expenses that you think can be reduced. Ask yourself the following questions:
- Which expenses are particularly high?
- What could you do without / what do you hardly use anyway?? (Jogging instead of going to the gym)
- What is there in similar quality also cheaper? (phone provider, electricity, etc.)
Be honest with yourself and think carefully about what you can do without. want. Honestly: Informing in advance& planning sucks. I also have more fun just going to the store, putting everything I like in the cart and pulling out the card at the cash register. But always remember that you pay dearly for this convenience and could spend this money much more sensibly: For a short vacation, for example!
Step 3: Start reducing fixed costs!
This step is especially important because it has a concrete impact on your account balance.
I did it this way:
- I looked at my list with the marked points from step 2 and cancelled all unnecessary contracts.
- If you don’t know who to send the cancellation to, you can google for the company name + cancellation. Often a cancellation is also possible online directly on the provider’s site.
- In the next step, I looked at the contracts where there is potential for savings, have the notice periods clarified and on comparison portals such as
Check24Affiliate link or Verivox etc. searched for alternatives. Often a change (incl. Cancellation) with a few clicks possible and the savings potential is huge. We save z.B. only by the change of the electricity and gas supplier, the ca. Took 10 minutes, approx. 400 € per year!
It is important to pay close attention when switching Services / Ratings , and not only to pay attention to the price. On the subject: Change of the electricity supplier I have summarized the most important points here. A contribution to the topic: "Which insurances are really useful?" follows.
Step 4: Reduce debts!
If you have overdrawn accounts or debts, I think it makes sense to reduce them as soon as possible and avoid them in the future (exception: real estate loans).
For this there are, besides consequent reduction of expenses, 2 options:
1. You use the possibility of a favorable refinancing, to pay off all debts – and then pay off this loan as soon as possible!
2. You go by the Snowball principle sort your debts according to their amount and gradually pay them off completely, starting with the smallest amount.
The Snowball principle is supposed to be especially advantageous from a psychological point of view, because you quickly see successes. I would consider refinancing especially if you are currently paying very high overdraft interest or are still paying off old loans that were taken out at very poor conditions. In this case, be sure to contact your bank in advance and find out what amount you need to pay off the loan completely in the short term.
Beware: If you don’t change your spending habits, debt restructuring risks quickly falling back into old behavior patterns and ending up in a credit spiral. In a case like this, I would get professional help. How you can recognize a serious debt counseling, you will learn z.B. at your Consumer center .
Step 5: Understand and change your own consumption behavior!
It can really be very interesting to reduce your Buying behavior to question, as it is in the Japanese Kakeibo method recommended.
Following this method, you should ask yourself the following questions before making ANY purchase:
- Can I live without this item?
- Can I afford the purchase due to my financial situation??
- Will I actually use it
- Do I have the space for it?
- How did I come at all on it? (Have I seen it in a magazine? I came across it out of boredom?)
- What is my emotional state today? (Do I feel calm? Stressed? Do I have a guilty conscience?)
- How do I feel about buying (Happy? Excited? Indifferent? And how long will this feeling last?)
Afterwards you should ideally write down the answers in a small Notebook write. You can also skip this step. The questions will help you to Cause for your consumption behavior to understand.
- If it is about the short Feeling happy when buying (> and the part ends up in the closet?)
- Is it the Stimulus, to grab a bargain (> So saving money by spending money?)
- Is it the feeling of finally giving you something to treat? (> to do something good for you?)
- Are there Compliments of the fellow human beings that make up the attraction? (> or would you also need 30 pairs of shoes on a desert island?)
- Do you want to talk to other people "keep up" can? (> and prove to you that you are successful?)
- Or is it really a matter of THEPART
More on this topic (and the answer to why buying doesn’t make you happy, you can also read in my post Guide to happiness).
Step 6: Saving in everyday life
If you now have a taste for it, and wonder how you can still save in everyday life, here are 5 concrete Saving tips for families:
1. Cash instead of EC card! Paying by card is convenient, but it can quickly cause you to lose track of your spending. spontaneously buys things that were not actually planned for.
2. Leads a fixed household budget per month one! This is then divided by 4 and calculated to 4 envelopes divided. There is now 1 envelope per week! With us such an envelope contained for a long time 100 € per week.
3. Buys at the Discounter and writes best before the purchase one Weekly meal plan (> here you can find my free form). This not only saves money, but also time and nerves!
4. Use cashback or. Discount cards, coupon books, coupons etc. But make sure that these are also worthwhile. At Rossmann you get z.B. 10% discount if you show the Rossmann App at the checkout, at Payback you also get 10% discount in combination with 10-fold points coupons.
5. Drink tap water! It’s not only cheaper, but also better for the environment and almost always healthier as well. The background I have -> here in my contribution to the topic tap water vs mineral water summarized.
Basically it is extremely helpful by the way, to get away from the principle of immediate need satisfaction and to spend only the money, which also belongs to you. Yes: The "Now everyone can afford everything" 0% financing sounds extremely tempting at first – the many small installments (credit card, Ikea card, H&M purchase, installment purchase at the mail order company, etc.) can be very expensive.) but add up to considerable sums over time, which in turn will eventually cause you to change the Overview or. lose control over your finances. From my point of view it is not worth. Happiness can not be bought anyway!
Step 7: Start building up wealth!
If you have successfully worked through steps 1 – 6, you can now turn your attention to the following Wealth building dedicate. My most important tip on this subject is: Acquire knowledge and trust in money questions only EUCH SELF! Everyone else wants only your best: YOUR MONEY! Regardless of whether you are an investment advisor or a bank employee: The People in the financial industry live off the commissions from contracts, which they convey to their customers – or are at least indirectly evaluated on the basis of the transactions made / goals achieved. An exception are independent financial advisors who you pay in advance for their services and who then work commission-free.
The specific approach: If you have no reserve, I would personally first 1.Save € 000 for absolute emergencies and on a Extra account pack. In the 2. In the first step, I would then regularly deposit money into this extra account until I reach a sum of 2 net monthly salaries have reached.
Afterwards you can then use the actual wealth creation / retirement planning dedicate. For this you can deal with commission-free ETFs (#MSCIWorld). The book Anlegen mit ETF Amazon Affiliate Link offers a good overview for beginners. Further information is available z.B. also on the -> Page of the consumer center NRW.
I personally think a lot of it, Split risks and divide up savings – E.g. invest a part in real estate / stocks (e.g. in the form of ETFs) and a part in cash + a small part in cryptocurrency. This does involve great risks (incl. Total loss), but in the long run, from my personal point of view, also very great opportunities. Here I have the most important information about Bitcoin& Co summarized for you.
Of course, I can’t give concrete recommendations or tips here –
but I would like to encourage you to develop more self-confidence in financial matters! After all, the feeling of financial independence is priceless!
So, those were my saving tips for families. I hope you liked the post. If you have any other tips, feel free to write me – I’d be happy to hear them!
You can also find more posts about finances here on my blog: