6 financial habits that seem bad, but will benefit
Get Rich / / December 20, 2019
Loans to separate accounts in the family and the lack of a rigorous budget planning is not so absolute evil, as is commonly believed.
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1. First, to pay small debts
It would seem more profitable to pay the loan with the highest interest rate in order not to have accumulated more debt. But the researchers from Harvard after a series of experiments concludedRepayment Concentration and Consumer Motivation to Get Out of Debt. That our motivation increases when we see how small debts gradually disappear. Paying them first, we see their progress - and we try to pay quickly and everyone else.
2. Have a separate account in the family
In many cases, even more reasonable to have separate accounts, for example, if one of the partners does not know how to handle money, or everyone has children from a previous marriage.
You can also open a joint account for household expenses and separate accounts that each had financial freedom.
3. remove housing
For young demountable accommodation, perhaps even better. With it, you are not tied to one place, you can always move if you find a job in another city. Besides its own housing costs is also not cheap: property taxes, for the repair and maintenance of accounts, interest on the mortgage.
But regardless of whether you shoot accommodation or pay his own, aiming to monthly payments do not exceed 30% of your income.
4. borrow
There is nothing wrong with the loan, if it will help to achieve one of the two financial objectives: to get an education or buying a home. Both of these options will pay off over time. In addition, if you mortgageYou can get a tax deduction.
5. Do not plan on spending
Plan your budget like a diet or exercise if it is not fun, you will not stick with it for a long time. If careful planning you do not like it, just try to keep track of expenses using apps. Then you will not be a feeling of guilt with every purchase, and you can reduce your expenses if necessary.
In addition, start to act on the principle of "Pay yourself first." From each paycheck primarily save money for retirement savings, investments and contingencies. And the rest of the income you can safely dispose of.
6. Make investments, do not understand the market
In the long term to get return on investment may not necessarily be a genius on the selection of shares or earning millions. John C. Bogle (John C. Bogle), the founder of the largest investment company Vanguard Group, said that for the average person it is best to invest in index funds. These include stocks many businesses, which reduces the risk, and yet they do not require large investments.