In this article, we will tell you about well-known methods that will help you sort out your personal finances: start saving money, stop spending it spontaneously, create a personal budget and pay off loans.
Pay yourself first
A rule popularized by investor Robert Kiyosaki in his book Rich Dad, Poor Dad. Its meaning lies in the fact that after earning income, you should first put some money into savings and investments, pay yourself in the future, and then spend the money on everything else. According to Kiyosaki, this method develops self-discipline, without which it is impossible to save a large enough amount of money.
The 30 Day Rule
This rule will help avoid unnecessary spending for those who are prone to impulse purchases. The main advice for them is not to buy the thing immediately, but to wait 30 days. If after a month thing will still be needed, it is worth buying it. By following this principle, you can get closer to the ideal of conscious consumption and learn not to spend all the money at once (one of the main reasons for the lack of savings). You can read more about this method in paperhelp review.
The 6 Jars Method
The method of allocation of the personal budget, first described in Harv Ecker's book "Think Like a Millionaire. According to him, all of your income should be distributed in six jars or envelopes. If you pay mostly online, six different virtual accounts will also work, which you can open in the bank's mobile app. In the first "jug" you need to put 55% of your income - this money will be used for the essentials (paying rent, utility bills, and food). The second one contains 10% for savings, which can be used for major purchases, vacations, and keeping in the account as a safety cushion. The third "jug" also contains 10% for entertainment. The fourth - 10% - for education (books, courses, professional development, working with a coach), another 10% - a contribution to future financial freedom, it can be just savings or any investments. Finally, the author proposes to spend the remaining 5% on charity (and this is not just altruism: helping others increases the level of happiness).
10% of income
If the previous system seemed too complicated for you, try putting 10% of all your income into a separate account. It is believed that this is a comfortable percentage that will allow you to create savings without too much belt-tightening. But if you want, you can change the proportion: some advice to set aside 20% or a fixed amount that you determine yourself, such as 10 thousand rubles from any income.
The Snowball Method
This method of getting even with debts was suggested by financier Dave Ramsey. He advises making a list of your loans and first concentrate efforts on the smallest. The rest should continue to be paid but in the smallest possible amounts. After paying off the smallest loan, you should revisit your debt obligations and concentrate on the smallest one. This method should be used, however, if the terms and percentages of your loans are about the same. If one of them has a higher interest rate, it is worth trying to repay it faster.