Loans, separate family accounts and the lack of strict budget planning are not such an absolute evil, as is commonly believed.
1. First pay small debts
It would seem more profitable to pay a loan with the highest interest rate so that more debts do not accumulate. But researchers from Harvard, after a series of experiments, concluded that our motivation rises when we see how small debts gradually disappear. Paying them first, we notice our progress – and we try to pay back all the others more quickly.
2. Have separate accounts in the family
In many cases, it is even wiser to have separate accounts: for example, if one of the partners does not know how to handle money or each has children from a previous marriage.
You can also open a general account for family expenses and separate accounts so that everyone has financial freedom.
3. To rent a house
For young people, rental housing is perhaps even better. You are not attached to one place with him, you can always move if you find work in another city. In addition, owning a home is also not cheap: real estate tax, repair and maintenance bills, mortgage interest.
But regardless of whether you rent a house or pay for your own, strive to ensure that monthly payments do not exceed 30% of your income.
4. Take loans
There is nothing wrong with a loan if it helps to achieve one of two financial goals: to get an education or to acquire housing. Both of these options will pay off over time. In addition, if you have a mortgage , you can get a tax deduction.
5. Do not plan expenses
Budget planning is like dieting or playing sports: if it isn’t fun, you won’t be able to stick to it for long. If careful planning is not at all to your liking, just try to keep track of expenses using the app . Then you will not have a feeling of guilt with every purchase, and if necessary, you can reduce your spending.
In addition, start by paying yourself first. First of all, save money from every salary for pension savings, investments and unforeseen events. And the rest of the income you can safely dispose of.
6. To make investments without understanding the market
In order to receive investment income in the future, it is not necessary to be a genius in selecting stocks or to earn millions. John C. Bogle, founder of Vanguard Group, the largest investment firm, said it was best for an average person to invest in index funds. They include shares of many enterprises, which reduces the risk, and they do not require large investments.
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