The term “Personal finance” it refers to how you manage your money and plan your future. In the case of doctors, all monetary decisions and activities have an effect on your health and financial habits.
Therefore, below we discuss three general personal finance rules that can help guide you toward achieving specific financial goals.
Good habit n. # 1 is to maintain a spending plan
Most people don’t have a spending plan and hate the idea of having to keep track of their money. Whether or not they want to spend their money on what they want today regardless of what they will want tomorrow.
Consequently, many great things of tomorrow are lost without a good plan. Many people do not like to stick to a spending plan for fear that they will be restricted, and who wants more restrictions. We live in the land of the free. In fact, it is the opposite. A spending plan frees us up to enjoy spending our money on the things we really want. There is more freedom with the use of a spending plan. Better to manage your money rather than let your money manage you.
If we know a vacation is coming, we can estimate its cost and start setting aside a portion of that cost each month until vacation time comes. Then when we go, we know that we are free to spend our money with no reservations that it might be necessary elsewhere. That money is destined for these vacations. Having a good spending plan is about being proactive with your money rather than being reactive.
A good habit n. # 2 is to automate your savings
After developing a spending plan, we incorporate the savings to be made automatically. Suddenly, your savings account is growing, but your income did not increase. Many do not understand how that could happen.
Most people cannot save money because they try to save the excess money at the end of the month. Breaking news, without a plan, there is never money left over at the end of the month, almost always everything is spent, and something else. When savings are automated, we don’t see the money and we don’t lose it. Out of sight, out of mind.
For starters, aim to reserve 10% of your income in some type of automated investing. Gradually increasing this amount up to 25%. Yes, it is possible, but it will take some time. Set up direct deposit to an account that is not easily accessible to spend.
The key is that it must be automated and out of sight. If 10% feels too high, start where you can to begin with, but start with something today.
A good habit n. 3 is to pay cash for your purchases.
Debt has become a way of life around the world and it is destroying many people’s financial futures. Debt is not a necessary evil; it can be avoided or minimized. For example, almost everyone uses debt to buy their cars. I have heard many times “Using cash is not the way to do it. Today, no one can afford to buy a car without borrowing money. ” Not only is that wrong, but you can save a fortune by paying cash
REMEMBER:
Spending cash on purchases creates a direct connection to the actual cost of the purchase. Taking money out of a wallet and handing it over is more painful than simply swiping a card. Increase our awareness of cost. Because of this effect, people tend to spend less money overall when using cash.
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