An overview of your money matters gives you peace of mind. You also see what you can save if you know how much is coming in and going out.
Avoid Spending Money Without Having Insight into Your Financial Situation
Keep your eyes open to your financial status. Having some vague rules to make sound financial decisions is not enough. So, take the necessary time to map out your financial situation thoroughly: what are your incomes, both the certain (e.g., wages) and the uncertain (e.g., pocket money, money that you get as a gift on your birthday or on public holidays or the money you earn if you occasionally do some weekend work)? What are your fixed costs (e.g., house rent, electricity bill, telephone costs), and what variable costs (e.g., clothing, clothing, supermarket) do you have? Ten steps to put it all together.
Ensure you have a good overview of your total assets, including ALL your income and expenses (and therefore the amount you only have to spend once a year, e.g., the home insurance or the tax). You can use a budget planner to overview your income and expenses (see, e.g., budget planner. be). Also, keep the documents related to your finances (invoices, payment receipts, account statements, insurance contracts) organized and always keep this “paperwork” in order.
Investigate which Expenses You can Save and Spend on Social Rights/Premiums
After you have figured out your financial situation, you can adjust it if necessary. Decide which platform you do not want or cannot save and then save on less essential expenses. You can eliminate some costs while you can look for cheaper solutions for others.
It might also be interesting to schedule some new releases. Also, make sure that you use the premiums you are entitled to. After all, this can cause certain incomes to rise and decrease certain expenses.
Be Prepared for Unforeseen and Significant Expenses
If feasible, keep a piggy bank for unforeseen costs (for example, if your washing machine or automobile breaks down) and significant future purchases. You can build this piggy bank by putting an amount aside every month. Give this amount a place in your budget plan. Inform yourself about the various savings options at the bank and choose the most suitable product for you.
You can insure yourself against various potential setbacks (e.g., hospitalization insurance if you fall ill). Buying used products might be advantageous for significant purchases: you won’t have to empty your savings account!
Think Longer Term
Do not save on necessary expenses (e.g., hospitalization insurance, family insurance, pension savings) that seem unnecessary in the short term but can be of great use at a particular moment.
Keep in mind that your financial status can change drastically if you or your partner become unemployed or long-term ill if you have children, if you start living together or get married if your relationship breaks down as you get older, and if more medical problems—or health care expenses.
Even if you are young, it is never too early to figure out your pension prospects and, if necessary, adjust them. When making (large) purchases, you should consider many more durable products that involve lower maintenance costs.
Be Sensible When Using Credit Cards
Credit cards are handy, but ensure the installment fits your budget! Be sure to think long-term. For example, consider possible future setbacks: make sure you still have a buffer in case you suddenly have to make urgent payments and pay off the credit. It is cheaper to save for some purchases and only afterward to make the purchase.
Borrowing money is typically highly costly. When using credit cards, be particularly cautious: “plastic money” entails the danger of spending more than you want, and interest rates might be considerable. So, if you don’t have any other options, utilize credit cards.
Avoid Impulse Purchases and be Alert to Temptations
Thinking longer-term also requires you not to get carried away when a salesperson approaches you on the streets or at the doors. An “amazing offer” online or in the supermarket can be less attractive than it seems initially. If you buy something in emotions, there is a high risk of forgetting the financial consequences or purchasing something you do not want or need. And if you go shopping in the supermarket, it is best to take a shopping list with you and not leave with an empty stomach. If you have given in to a whim, you sometimes have a right to cancel the purchase, but you must do this quickly. In concrete terms, you can cancel an online purchase or a purchase through a door-to-door seller within 14 days; this does not apply to purchases in stores, but sometimes the store allows you to return purchased goods.
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