You go to the gym to build muscle. You practice sports to build muscle memory and conditioning. You trace over drawings to practice artistic skills. Everything in your life is under your control, and you can apply this principle to money management, too! In this short guide, you will learn how to be one of “those people” who are good with their money.
1. Set up an automatic savings withdrawal on your payday
You won’t miss the money if you never see it in your bank account in the first place. Set this up with your bank. Every payday, have 20% of your weekly paycheck transferred from your bank account to your savings account. Make it difficult for you to access your savings account. Let the money flow into it unimpeded by you or your plans for that new jetski. After you have saved enough, you will have a six-month emergency fund and an investment that you can apply toward Phil Town’s Rule #1 investing system, if you like.
2. Get a credit card that is just for building your credit
If you are in any kind of financial crisis, it helps if you have excellent credit. In case when you’re in need of money try out various available options. For example, Sunshine Loans offers fast loans to help you when you’re broke. No need to manage bigger loan amounts & pay far less in interest rates.
Get a card that you only use for your car payments or your utility bills. Pay it completely off every month. This will build your credit and make you incredibly attractive to financial companies. It will also significantly improve the interest rates on your mortgage, car payments, and any other loans you decide to take out.
3. Talk openly about money in your family
In some cultures, money is a very personal thing and is not openly discussed with anybody. However, you can still keep your privacy while openly discussing the topic of money at your family supper table. You shouldn’t hide from these discussions or be afraid of money matters. Money is good. It is an extension of each individual person.
With it, you can improve your quality of life and ensure your future security. Be open-hearted and expressive when talking about wealth and long-term savings. Sometimes, people can be difficult about the topic of personal finances. However, if you allow them to air their feelings, they often become quite reasonable.
4. See how little you can actually spend in a week (very empowering!)
Test yourself for a week. Withdraw only one-third or one-quarter of your paycheck in cash for the week. See if you can go the whole week on that amount of money. Test your ability to live a simple, but fulfilled, life on only a quarter of your paycheck every week. This will also define what things you truly value in your life. You may find that your tastes in entertainment and relaxation become very well-defined with this amount of focus. That will save you even more wealth in the future. After you have completed a few weeks of this exercise, suggest it to your closest family members. Your whole household can become money savvy under one roof.
Remember that you can perfect any skill, including money mastery. It is a knowable skill, and anybody can get good at it. Don’t put any pressure on yourself. All toddlers have to learn how to crawl before they learn how to walk. Just because someone else appears to have greater money mastery, that doesn’t mean that they do. Only their accountant knows how strong they really are in this area. Give yourself space and enjoy the learning experience along the way!