If you’ve decided to reconsider your financial habits and approach to budget planning, you’re in for a tough process: it’s a real life paradigm shift. But if you follow the proven tips, you will reach a new financial level in just one year.
What do you really want? Don’t think that you can’t get what you want anyway (“Where can I get the money? I won’t make it anyway…”) and that it’s a waste of time. The dream is a powerful resource. Dreams guide our daily actions. For example, when dreaming of a new home, we look for a better paying job and learn the specifics of building a private home.
When you imagine what you want, whether it’s a new apartment, a trip or a TV, try to “see” the dream in detail. Where are you going on vacation: to the sea or to one of the European capitals? How do you get there?
What do you experience in those fantasies when your dream comes true? What do you feel when you walk into your new apartment: euphoria? A sense of elation? A long-awaited peace of mind because you don’t have to pay rent anymore? Your condition will be a beacon and the motivation that makes it easier to save the necessary amount. You are no longer “tearing away” a solid portion of your income – no, you are laying the foundation for a happy future. And by the way, a dream formulated in terms of cost and a clear deadline for achievement is already a financial goal.
What do you make money for? For pleasure, of course! You exchange it for feelings and emotions. We all have different ones: some spend a lot on protection like the most expensive VPN service, others prefer to spend earnings on entertainment like online BlackJack no download or traveling, and there are lots of people who keep buying online tutorials on SkillShare. While spending, we enjoy delicious food, watching a movie, wearing stylish clothes, and that’s okay.
Try to spend money consciously by asking yourself questions more often: “Is this really what I want right now? Will it bring me pleasure?” If the answer is yes, feel free to make the purchase (if, of course, it fits into your budget). If you’re not sure and don’t feel a rush of positive emotions at the thought of buying, it’s worth thinking about it and maybe giving up on the extra expense.
Financial plans don’t have to be limited to one year – you need to keep a more distant time horizon in mind as well.
This will give you two types of goals: medium-term – those you want to achieve this year (go on vacation, buy a new car), and long-term, for which you need two or more years (to repair the apartment). Once you have identified the goals, it is important to specify the amount needed to achieve them and choose a timeframe for achieving them.
For example, you want to go on vacation in April and for this you need $4 thousand. That means you have five months left until that vacation, which means you should set aside about $800 every month. With saved money you can buy tickets and book a hotel in advance, due to which the trip will be cheaper. If the monthly payment is too large, you can postpone the implementation of your plans or try to reduce the cost.
Create a Financial Cushion
It allows you to feel more free and independent. Let’s say there have been changes at work (a change of manager or you were demoted), and you feel uncomfortable. Knowing that you have savings, you can say goodbye to your old job. In addition, do not have to live in a mode of total savings, trying to buy only the cheapest goods.
Understand What You Can Do
Many people certainly happened, sat on a stringent diet, after a while to snap and literally empty the fridge. The same is the case with financial savings: the sharp cuts in expenditure is fraught with stress, which inevitably leads to a setback. New rules should be introduced gradually, over time, making them a habitual part of a new life. Save no more than 30% of your monthly income, but you can start with 5%, increasing the percentage of savings month by month.