In the book "Millionaire Next Door", the author mentions an interesting phenomenon: those who insist on jogging, although they don't seem to need to do it to stay healthy, their health does benefit from this habit. The same applies to financial management. Those who are financially healthy tend to put an effort into maintaining their financial health, while those who are financially poor tend to ignore this.
Why is this happening? Because managing your finances requires self-control, it takes time and effort to plan and budget. These efforts will eventually translate into tangible wealth.
In our family, my husband's income fluctuated because of his sales work, but over the past five years, our net worth has grown steadily. This is due to the fact that we take the time to allocate revenue and review our budget every month.
Here are some ways we can do a good job of income distribution:
1) When you pay your salary each month, set aside half an hour to plan your savings and spending. As the book says, we often worry about money but don't want to spend time managing our finances. Turn these worries into time for planning and budgeting, and you'll find that it's a worthwhile investment.
2) Adhere to the principle of "saving first and then spending". That is, the balance of income minus savings is used for consumption. Budget well in advance every month, save an unbudgeted amount when you pay your salary, and you will find that it is not difficult to save.
3) Adopt the "12 Certificate of Deposit Method" for savings. Put a portion of your money into a three-year fixed deposit each month and take advantage of the higher interest rate. Whether it is through mobile banking or offline outlets, ensure that funds are not easy to withdraw and achieve mandatory savings. Save once a month, and you will have 12 certificates of deposit after a year, remember to record them with ** for easy management.
4) Arrange daily expenses reasonably. Deposit fixed expenses (such as mortgage, rent) into a dedicated bank card, and automatically deduct or transfer them manually. Deposit your living expenses (such as grocery shopping, utilities) into your credit card and spend as you budget to avoid interest. For large annual expenses (such as insurance premiums), it is recommended to spread them over a monthly basis to reduce stress.
5) Save other income than salary. You can choose to deposit in whole or in part as a way to reward yourself. We're struggling to pay off our mortgage, so we can save money so we can build wealth faster. Maintaining a moderate standard of living and not blindly pursuing material comforts will make you feel more free.
Through these methods, we not only manage our finances well, but also enjoy the freedom and satisfaction that comes with growing our wealth. Hopefully, these lessons will help you and let's work together to manage your income wisely and grow your wealth steadily in 2024.