Learning to deal with money – While one has to toil day and night so that he can only pay the interest on his loans, the other has a nice day and lives off his interest. How well you can handle money primarily determines your thinking. That’s why you can get your finances back on track with fairly simple rules. See scodemustang.com for details
1. How should you deal with money when you are in debt?
It’s actually quite simple: You mustn’t spend more money than you earn and you can’t go into debt. An exception to this would be sensible loans, for example for the purchase of a (not too expensive) property or an investment in your own company. On the other hand, no credit should be taken for consumer goods, since there is no security against them. Even a car loan can be too much here.
2. What are good methods of dealing with money?
Basically, the same applies here as in point 1: Do not spend more money than is collected monthly. If you manage to get at least a tenth a month, you can build a good cushion over time and always have some money at your disposal when unexpected payments have to be made. The best thing to do is to draw up a financial plan in which you list your income and expenses: This shows you which payments you absolutely have to make (rent, electricity and heating, for example) and which expenses you can reduce. If you have a certain plus in the account, this amount should remain as a framework. With a financial cushion of 2,500 USD you feel rich, if you have the same amount on the overdraft facility, this can already cause abdominal pain.
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3. What are the debt traps?
- Mobile phone and entertainment: A high mobile phone bill or the expensive subscription to the payment transmitter can be a start into the debt trap, especially for young people.
- Energy costs: electricity and heating are becoming more expensive. Here it helps to always keep an eye on the costs. If you wait for the annual accounts instead, a nasty surprise may be waiting for you, depending on how high the back payments are.
- Insurance: Which insurance is really needed? Is there a cheaper alternative?
- Subscriptions and memberships: You can save money by regularly checking your newspaper and magazine subscriptions to ensure that you are still reading them. Likewise, if you cancel membership in the clubs in which you no longer show up anyway.
- Groceries: If you prepare your own food at home, you save a lot more money than if you eat several times a week or if you use the pizza service all the time.
- Account and loans: Is your account constantly overdrawn? Then you should think about debt restructuring: it is still cheaper than paying the high overdraft interest all the time.
4. How can you save money in the household?
Is your electricity and water bill constantly increasing and have the garbage fees also increased? If you want to flip the ever more expensive cost of living, you can significantly reduce the costs in everyday life with small measures and save a few hundred USD annually.
Learn to deal with money – Here are five tips to save money:
- Electronics: Even in stand-by mode, the electronic devices consume electricity. Better switch it off completely.
- Fridge: If you operate this at level 1, you save electricity and your food will still remain cool and durable.
- Saving when cooking: For hot water, an immersion heater or kettle makes sense. If you have to cook a dish for more than 20 minutes, the pressure cooker is worth it. This not only saves energy, but also time.
- Microwave: The microwave uses less electricity than the stove for small meals because it is also used for a shorter period.
- Saving water when showering: With an economy shower you save not only water, but also the energy with which it is heated up to the shower temperature.
Further tips and recommendations on learning to deal with money:
- How to save up to 6,697 USD a year and still live well
- Suggestions for the correct handling of money
- 20 tips on how to save money anywhere in the household
- How much money do we save per month with our self-sufficiency
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9 reasons why I started affiliate marketing – and why you should imitate me.
Do you have any further questions or tips on how to learn how to use money? Then post your question or tips in the comments.