Every tenth Russian is regularly faced with a lack of money before the next salary, according to VTsIOM analysts. And emptiness in the wallet is not always associated with low income. Often people ineptly manage their personal budget. But the situation is fixable: it is enough to pump financial literacy. How to do this, we will tell further.

What is financial literacy

This is a set of skills, thanks to which a person gets rid of unnecessary expenses and creates savings. In addition to the ability to manage earned money, this also includes other skills:

•         navigate insurance and credit services (interest rates, terms and other conditions);
•         plan a budget (clearly imagine how much and where to spend by category);
•         know investment tools (understand the degree of investment risk, etc.).

If so far investments seem difficult, we suggest that you familiarize yourself with the basic principles of financial management.

3 keys to financial well-being

Ramsey Solutions consultants identified the main approaches to money management that financially successful people follow:

1.   Maintaining a monthly budget

Learning to spend less than your income will be easier if you streamline earnings and spending. Consider in your budget:

•         sources of money (salaries, benefits, tax deductions);
•         categories of expenses (rent or loan payments, transport, food and other purchases);
•         the amount you plan to set aside.

What to do

At first, just try to remember the expenses and record them. Choose for yourself where it is more convenient to do this: a notebook, an Excel spreadsheet or a profile application for a smartphone — Home Bookkeeping and the like.

Segment your expenses by type:

• fixed, which do not decrease and do not grow on a large scale (rent, loan payments, etc.);
• variables, the amounts of which change from month to month (expenses for transport, food, clothing, recreation, etc.)

Also summarize your income by category. After 1-2 months of such accounting, soberly assess the costs and income. Decide which category you can spend less on and what to exclude from it. Budget planning should be carried out in such a way that you can save a share of earnings in a piggy bank.

Simplify budget management «The 50-20-30 Principle».It provides for the following division of finance:

• Allocate 50% of your income to obligatory needs: paying for housing and communal services, renting a house or making a mortgage payment, buying clothes, food, transportation to work. The food category does not include restaurants and cafes;
• 20% of earnings will be your contribution to the future — repayment of educational, consumer loans, formation of a future pension using an individual pension plan, creation of current savings;
• the remaining 30% can be spent on recreation: tourist trips on vacation, visiting cafes and cinemas.

Another money management technique is called «The Six Pitcher Method». All income received is already divided into six categories:

• 55% of earnings should be directed to the first jar and spent on current needs: utilities, food, necessary medicines and medicine, transportation costs;
• the second jug will be 10% of income, they will go to entertainment expenses: going to a concert, spa treatments, country holidays, etc.;
• the third jug is designed to ensure your financial independence — direct 10% of your income to investing, creating passive income;
• the fourth jug is your «educational store.» 10% of earnings are deducted and sent for educational purposes, for example, taking online training courses and other ways of personal development;
• the fifth jug is 10% and is a reserve fund for possible large expenses, whether it is buying a car, carrying out repairs, and more;
• the sixth jar contains 5% of earnings, which will be used to purchase gifts and other charitable needs.

The offered percentages are optimal, but not mandatory. The final distribution is up to you depending on your needs.

2.   Accumulation of funds in the «airbag»

An airbag is called the accumulated amount in case of loss of a source of income and other financial difficulties. Economists have calculated: on average, a pillow should be equal to three of your monthly income.

In a family with children, the volume of the pillow should be increased approximately to earnings in 6-12 months. It is not known how long the “dark streak” can last, but such a piggy bank will last for a long time.

What to do

Making savings a habit will be easier with the rule «pay yourself first». That is, when you receive a salary or other monthly income, you immediately save money and only then spend the rest.

How to start postponing? The first step is to open a savings account at the bank with automatic replenishment. Keeping in a bank account will increase the money due to accrued interest. How much to set aside from each salary will depend on the size of the budget. Clearly realize: the contents of the savings account are inviolable, do not spend it on momentary pleasures.

When the reserve grows up, the second stage will be its division into several currencies. Leave a part in rubles, the rest is reasonable to divide between the dollar, the euro. There are also protective currencies — the Japanese yen, the Swiss franc. Their rate is stable even in global crises. Multicurrency will help in the event of a fall in the ruble exchange rate — you will save savings due to the growth of other currencies.

3.   Investing in the future

Think about pension accruals, even if you are still far from retirement. Look for an insurance program that compensates for damage from possible risks (disability, etc.). Of the acquisitions, first of all, equipment that will help you earn more is useful, for example, for a sound engineer, this is a high-quality microphone.

Commercials and other marketing gimmicks can lead to unnecessary purchases. But there are tricks that will help them resist.

«Stranger Test». Imagine that someone offers something you want to purchase for free, or gives an equivalent amount of money in return. If, after deliberation, you choose money, the purchase would clearly be superfluous.

When it is difficult to determine whether the thing you like is really needed, postpone the purchase date, for example, for a day or even a couple of days. Buying ardor in anticipation will subside and the mind will tell you whether to buy or not.

Do not approach shopping as a means of self-reward. There are many sources of pleasure around: a trip to the mall can be replaced by a walk in the park or a relaxing bath. Watching your favorite movie or reading an interesting book can also be a great option.

Summary

The suggested tips will help you change your mindset to “money”. That is, it is reasonable to approach spending, form a secure future, and create new sources of income. For example, mastering an additional profession with the help of educational courses at https://bizfabrika.ru will help to increase earnings. Adhere to these principles — and the right attitude towards money will enter your life, and with it the long-awaited financial well-being. I wish you success!