How To Save Money – 5 Personal Finance Tricks

Hello friends. Welcome back to The Comprehensive Minds.When it comes to money and finance, things can get really overwhelming, really complex, and really confusing. So what I’m going to do is share with you five Personal Finance tricks that I utilize myself, which have helped me deal with my finances a lot better.

1. Finance Management

5 Personal Finance Tricks
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First, and one of the most important things you need to learn how to do is finance management. What I want you to do actually get out of your notebook. You can do this on your phone, on your laptop. Write down all your finances, write down how much money is coming in. And also in the next column, write down how much money is going out. You really need to map out everything just to get a grasp of what exactly your finances are at the current moment.

Are you basically at a loss every single month or do you still have more money enough? How can you exactly manage it? But before we actually do that, you need to put this on paper, on your notes, whatever you can write down your income and write down your expenses to the T. Now once you’ve written down how much money is coming in and how much money is going out, the next thing to do is list down your fixed expenses.

Now, what do I mean by fixed expenses? Fixed expenses are things that you just cannot change. It can be your rent, it can be your car payment, it can be your student loans, these expenses you have to pay every single month. Now after you’ve written those lists down, think of your other expenses, expenses that you can possibly change?

It can be how much money you’re spending on groceries, or how much money you’re spending eating out. It can be how much money you’re spending going out. Those expenses separate them away from fixed expenses and other expenses which you can change. Once you’re able to sit down and get a perspective of your finances, trust me, a big Boulder is going to be lifted off your shoulder. You’re going to feel a lot better knowing, hey, I have everything mapped out right here.

Now the next step is how can I reduce the expenses which are not fixed? How can I reduce my going OUTTaking how much money I’m spending just on activities and eating out? How can I reduce it to get more money in the pot at the end of the month? Now I’ve been doing this for many years and what I actually do is every single week at the end of the week I track it.

So I look at my bank account, I look at my statements. You can actually use apps for this as well. But what I do is I look at how much money I’ve been spending every single week and how it’s progressing as the week’s progress by. And do I see a pattern as am I spending way too much eating out? Could I substitute that by just going to the grocery store and actually cooking inside? And I try to find a balance between time and money where I can spend the least amount of time but also save the most amount of money.

Now, again, once you get the system in place and you start checking it weekly, you start getting a hold of your finances where it doesn’t feel like it’s just a Dragon that’s just trying to fly away. You’re actually getting a hold of it and you can actually start managing it better so you can actually start saving to invest.

2. Time and Money

Time and Money
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Now, this takes me to my second trick, which is realizing that time is more valuable than money. Now, what do I mean by this? For example, if you were to go to Elon Musk and ask him out of his 200-plus billion-dollar fortune, hey, Elon, if I were to give you 30 years back of your life, just for $100 billion, half of your wealth, would you do it? Now? I guarantee you 100% he would say yes in a heartbeat.

Now, why is this? It’s because no amount of money can buy a second of time. And it’s very important to recognize this fact because money is something that you can always get back the next day or the next day and the next day with time. It’s one resource. No matter how rich, no matter how poor you are, we all have the same 24 hours.

So the trick that really helped me overcome this mind-blowing fact is I realized that I could not be working every single day of my life because I’m literally going to be working until I die. So I need to find a way to start making money while I’m sleeping. This is where side hustles and passive income sources come in very handy because it’s very important to find other ways to make money in your sleep while you’re constantly at your day job or while you’re being a full-time student, you need to find ways where you can start making money in your sleep.

If you’re lost on ideas on how to find passive income sources, there are some examples that I can give you right off the bat. It can be investing in stocks, investing in crypto, starting an online business where you have sales all night long, where you’re basically sleeping. It can stock is going up in value. It can be things that don’t require your effort and attention. 24/7.

3. How to Control Impulsive Buys

How to Control Impulsive Buys
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This takes me to number three, which is going to be your impulsive buys and what you can do about them. Now, we’ve all had this moment where we basically go to the store and we see that brand new computer or we see that brand new pair of shoes or a brand new outfit, and we just want it. We need it so bad. At least we think we need it but in reality, we just want it really bad. And sometimes we bite on this urge.

We say you know what, why not? We only live once and let me just go and let me purchase that. And what ends up happening is you start forming some regret later down the road and even a couple of weeks or a couple of months down, you actually forget about the thing that you bought and you’re off to the next big purchase. And what I want you to do to combat this impulse to buy situation is I want you to walk away.

Now again, it’s easier said than done, but try your hardest just to walk away knowing that the item is still going to be there tomorrow. And what I want you to do is take the next 24 to 48 hours really just thinking about this item, really thinking about am I really going to utilize this item for the next couple of weeks, months, years, and so on? Or is it just a want that I just simply want?

Because if we think about it, there is going to be a new item next month. New seasonal items come in, new laptops come, and there are always upgrades coming in. Is this something that you truly think you can hang onto for a long period of time that you can truly value? And when you actually attempt this for the first time and it goes into success, you actually feel a sense of relief that you were able to fight this impulse and you find yourself doing this more than often.

But what this ends up doing is when we actually start seeing that one thing for the first time, we have this sense of euphoria, as in wow, I’ve been finally wanting this so bad. Like this looks so beautiful. Let me get this. But once that euphoria weighs down after we make the purchase or if we walk away, we start rationally thinking about things the proper way and we can make rational decisions then.

4. Stop Saving Your Money

Stop Saving Your Money
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Now the number fourth trick that you need to know is to stop saving your money. Seriously, just stop saving your money. Period. To stop. Why do I say this? Instead of saving your money and putting it into a savings account where you’re just getting less than 1% gain, take that same amount of money and put it into stock investing account. So what I mean by this is save to invest. Don’t just save to save.

The average return for the S&P 500, the top 500 companies is 9.4% for the past 40 to 50 years. Compared to the US dollar, which has lost so much of its value in the past 40 to 50 years due to inflation and so many other factors, stocks will continue to head higher because as the years go by, these US companies will continue to grow and flourish.

Now the key and the hack here is to basically have your brokerage to your automatic investing for you. So instead of you having to basically deposit money into your account and start buying a certain ETF every week or every month, have your broker automatically take the money out of your bank account, put it into a brokerage account, and then you buy it every single month, every single week, no matter what the prices, it doesn’t matter by the same ETF that you’re going to go into.

So you have access to the top 500 companies and no matter what the value is going to continue to go up over time. We’re going to have bumps and bruises and corrections and possible bear markets. But again, you’re looking for a long-term time frame of five to ten years. Now the key and the hack here is to make sure your broker automatically takes money out of your bank account and deposits it into your broker.

And then you buy an ETF every single week or every single month no matter what the price is because you’re going to be dollar cost averaging. Because in about 10, 20, 30, 40 years from now, whenever you decide to retire, it’s going to give you the average of what you started to invest in. Now again, you’re investing in an ETF, a basket of stocks. So you’re not individually picking random stocks. You’re constantly investing in the top 500 companies which are going to benefit you in the long run.

Again, stop saving your money. Instead, save to invest your money and let your money grow over time. As these US companies grow, your money grows as well.

5. Don’t Ignore Your Credit Score

Don't Ignore Your Credit Score
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Now this takes me to number five, which is don’t ignore your credit score. Your credit score is very important so please stop ignoring it. So many people shockingly say, hey, credit cards are evil, stay far away from them. You’re basically going to go into debt, it’s never going to be useful. It’s going to kill you in the long run.

Please. Those people are the ones who are truly terrified of what credit cards can do. But if you understand the power of credit, if you understand the power of building credits, and being responsible with your spending, you can use credit cards to your advantage.

What I highly suggest you do, which I’ve mentioned in my previous articles is get a credit card just for small minimum purchases that you can do every single month and make sure you are paying it off in full every single month because that’s going to show the credit agencies, hey, you can be trusted with large amounts of limit and you can actually be responsible and paying it off and they’ll actually start improving your credit score over time.

And what happens with that credit score is you’re going to be able to get the best interest rate deals for whenever you’re shopping for a home or a car or business loan and so on. Now again, this also ties in with the impulse of buy situations. Do not use your credit card for impulse buys or for large purchases that you know you cannot pay off in full by the end of the month.

Only use your credit card responsibly by the end of the month. Make sure everything is paid off so you can safely and just surely maintain a great credit score. I really hope this article helps everyone.

Also Read:

Top 7 Tips to Protect Your Portfolio Against a Recession

The Only 10 Personal Finance Tips You’ll Ever Need

What Happens to Your Money When an ETF Shuts Down?

6 Financial Goal to Achieve In Your 30s (ACHIEVING FINANCIAL INDEPENDENCE)

12 Life-Changing Money-Saving Hacks for 2022

Small-Caps Investing as Performance Booster? THE TRUTH EXPOSED

10 most held and the 10 most bought stocks by smart money Q2 2022

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