How to manage your money like the rich
Over the years I have noticed a pattern that leads to why some become financially successful or fail. If you are not aware of this pattern, it will be almost impossible to change anything about your financial future, nor will you even realize what is causing your difficulties. What this pattern is and more importantly, how you can change it with a simple concept to take control of your financial future, most of your financial success is from your behaviors and habits with money. And people with less financial success also show certain patterns in how they handle their money.
Now you have seen the spending behavior of people who have bad money management, It is important to learn how to manage money effectively or how to get my finances under control and how to avoid these negative consequences and improve my overall financial situation. So, In this article, we will help you to manage your money and learn how to get control of your finances like financially successful people and how to get better at finance. So let’s get started with the cycle of financial success, which starts with your salary at the top, which is now divided in percentages as follows:
Financial Freedom Account
This account is 10% of your salary and this account is used solely to build your financial freedom by using this money only for investments such as real estate, stocks, or passive income projects. It is important that this account is never used for any other purpose.
Long Term Saving
long term saving Another 10% is set aside for later expenses, for example, to cover major repairs or unexpected expenses. Because of this, you are always well prepared and you don’t have to take out loans or borrow money when things get tight.
10% goes into further education, for example for seminars or books. This serves to increase your income in the long run by adding more value to others, which often comes back to you in more income.
55% of your salary goes to just necessities, like food, clothes, insurance, rent, gym, and transportation.
Other Basic Requirements
We plan another 10% for basic requirements, for example, going out to eat. This is where the biggest difference lies, and I think it becomes clear. In the previous example, it was almost 50% for pleasure, here it is just 10%. And this is also what differs the most between people who are financially successful and those who are not those who have bad money management spend most of their money in this area but often simply unconsciously. They simply aren’t aware of what they are spending their money on.
Donations of 5% should be used for charity, but if you have debts, I recommend using this 5% to pay off your debts faster. With this concept, you can completely change your financial future and change bad money management habits by replacing them with better ones.
Concept of Financial Future
The consequences of poor money management can be serious and long-term. People who do not know how to manage their money often encounter problems such as the inability to meet basic needs, Having to borrow money to meet expenses, incurring debts that they cannot repay, Facing financial ruin and poor money management can also have negative consequences for the individual’s mental and physical health. Especially at the present time when interest rates are rising, the cost of living and energy prices are increasing, poor money management can lead to not being able to afford one’s basic needs or to financial ruin. It is all the more important to recognize and change these patterns of bad money management. But in order to change certain habits in the first place, you have to be aware of these habits, which is why I would now like to share with you the cycle that often people with bad money management go through.
The cycle begins with the salary that everyone receives each month. And now it is important what this money is used for, you see the salary, which comes in every month. This salary then divides itself with the humans with bad money management. This money is then spent on debt, shopping, parties, new gadgets, the car, and eating out. Often I hear from these people that they do not spend so much money on these areas, but this is often because they are not even aware of what they actually spend their money on.
But to make it even easier for you, you can also open a separate account for each of these areas and then automatically allocate the respective percentages to separate accounts via standing orders on the day you receive your salary. This will take the decision out of your hands and you won’t be tempted to spend the money for other purposes. Another tip is to build a money magnet. The concept is based on the saying “money comes to money“
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We are not financial advisors. the above information and the ideas presented are for informational and educational purposes only and should not be construed as financial or other professional advice. It is your responsibility to take all necessary steps to independently verify and ascertain any information you choose to rely on from or take action based on this as we are not responsible for your use of the information obtained