Financial protection – these are NZ (emergency reserve), debit and credit balance, and competent budget planning. The text is short but informative.
The content of the article
5 ways to play it safe:
- Calculation of expenses and income;
- Determining deadlines for adaptation after a force-better situation;
- Determine the minimum amount required to provide financial protection;
- Budgeting is a conscious approach;
- Planning
Let's consider each item in more detail:
1. Learn to regularly count where your money goes
Cost accounting is the basis on which financial protection. Banks that take into account the interests of the customer understand this. For example, Tinkoff offers a simple smartphone app through which you can not only transact money, but also track your expenses and income. It's very comfortable. If you have nothing to hide.
But if you don't want your financial history to be known to others, stop using plastic cards. Make financial transactions in cash or with cryptocurrencies. Transactions can be manually recorded in a special notebook, in an Excel spreadsheet or, in the case of cryptocurrencies, the blockchain system will remember and save everything. Both transaction data and your anonymity.
In general, there are many ways to account for finances. Choose the most convenient for monthly calculations. Determine how much money you spend each month and whether that amount correlates with your income. Analyze expense items to identify and eliminate “unnecessary expenses”. Turn them into savings by eliminating purchases you can afford to do without.
You can “fill” this pillow with any amount. The cumulative effect of regular financial investments will still work for you.
What are you willing to give up to organize a strong financial protection?
You probably have a lot of little habits that you could easily live without: a cup of coffee with you on the way to work, an addiction to refined sugar desserts, a bottle of foam at night, etc. Take out a small habit that is silently and imperceptibly harming your overall health and move it to another status.
Accumulate not the effects of bad habits, but the money you spend on them. In this case, illness, job loss, and other force-better circumstances will not surprise you.
2. Financial protection works when you set a deadline.
Remember the best strength situations in your life and calculate how long it took you to get out of them. Set a deadline to determine the amount needed to provide financial protection in the event of unforeseen circumstances. The standard cash reserve is a period of 6 to 12 months. This is how long it takes to recover after losing your job, given the unstable situation on the job market in Russia.
3. Calculate your minimum
What is your minimum monthly budget? Multiply it by the time needed to restore systematic financial injections.
For example, 50,000 reais and 6 months. We multiply each other. 300,000 reais – a financial pillow six months in advance. This is your bare minimum for survival.
Until you have that value, trust in the future will remain an abstract concept. If you care about your future, find ways to get those funds. Otherwise, you can be assured of security, for example, by subsistence farming away from civilization. Your own land, farm and garden is obviously a more reliable “cushion” than the numbers in your account. But that, again, depends on your lifestyle and plans for the future. If you travel a lot, your home and family are a burden. If you don't own your own property, you will be forced to pay the owner extra for housing each month.
Analyze all aspects of your life. Where are you now and what do you have? What are you looking for and how much time do you set to reach the goal? Start with long-term global issues to build everyday life towards big goals.
4. Make a conscious budget
An analysis of expense items will show where the earned money is flowing. Review your priorities. How do you eat? Where do you live? Do you have transport? Are there children in your family? How much do you spend on leisure and hobbies? Each expense item is a puzzle piece in the big picture of your life. How does your choice affect your life in general? Make a list of questions that will help you understand how vital these or those activities are to you right now. which are essential for survival? What is important? What is missing?
This process isn't easy for everyone, but if you learn to consciously approach spending, you'll find a way to not only save but also increase your income. By raising the standard of living, you have access to new tools for self-development, take your business a step further and improve your personal qualities. There is no single puzzle that makes up a picture of a complete picture – everything is connected.
5. Plan and you'll have strong financial protection
Once you've audited your financial situation, start planning. When you can see your situation clearly in the here and now, you can make a plan to strengthen financial protection.
Change habits. Revisit your beliefs. Saving is not difficult. The main thing is not to get carried away by the limitations of yourself. Sudden changes do not bring results painlessly and everything has to be rebuilt. So don't feel sorry for yourself, but don't break your knee. The path to success starts with small changes. For example, with clear thinking.
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