5 basic rules to manage your finances

5 basic rules to manage your finances

5 basic rules to manage your finances

Take a hold of tour own balance sheet

5 basic rules to manage your finances

Of course, when managing one’s finance there’s lots of factors to keep in mind. Anyway, there are some general principles, or best rules, that one can follow in order to balance revenues and expenses. Here are 5:

If you can’t pay for it, you shouldn’t buy it

Installments are useful to those who sell and not to those who buy. Therefore, it is better to avoid using deferred payments, even at low rates.

Limit credit card use

This is a rather countertrend practice. Although everyone is pushing for an ever greater use of electronic money, credit card use may have the great defect of taking away the perception of spending. It is not our argument that we should completely inhibit online or physical purchases using cards, but it is probably best to use this method only if we know how to avoid the typical “casino chip” effect: it’s difficult to perceive those little plastic colored pieces as real money. Avoid, in short, that compulsive attitude able to make you lose control of spending.

Eliminate debit cards

This is a card that is similar to a traditional credit card, with the difference that you don’t pay for your purchases at the end of the month all at once, since it is divided into installments, on which, however, a high interest rate is paid. Even banks often offer debit cards, enticing clients with the prospect of not having to face a single charge at the end of the month, but spread over fifty months at “x” euro each. Loss of control over expenses and exorbitant interest rates should lead to the avoidance of this form of payment.

Never use personal financing

We are in an era of extremely low rates: if you notice, your bank pays you almost zero interest if you leave money in your account. In front of zero interest income, you are often forced to pay double-digit interest rates if you apply for a personal loan.

Plan purchases in subsequent years

Getting away from the logic of “I want everything now” means having the ability to say no to every “whim”. At certain times it is necessary to make choices: for example, either I buy a new car or I go on vacation.

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You’ll learn how to assess your own balance sheet with a critical and proactive spirit. It’s not just about a snapshot of your assets, but a periodic analysis of your strengths and weaknesses, approached without fear of changing the status quo. The goal is a statement and a promise, and it’s the title of the book. https://onemillionformydaughter.com/


Pietro Di Lorenzo