Ok so this year you might have read something about personal finances, maybe you got mentioned in one of our posts and there were even a couple of weekends that you preferred Netflix to going out to spend money. And yet, you still can’t save enough for those big financial goals. Fortunately, we will tell you here everything you need to do in the least productive week of the year, so that next year you can save money and invest as you please.
1. Start by mentally preparing yourself
The first thing that millionaires do is decide that they are going to get along with their money. So let’s start there and get into the idea that from next year on you will be one of those people who decide what to do with their money…and not one of those who do as their money allows.
2. Summarize your wealth
We always recommend starting with the hardest task, so start reviewing these numbers. This will take a couple of hours, but that’s why you are doing it in the last week of the year. The basics we recommend are:
- How much money do you have saved?
- How much money do you have invested?
- How many cards and credits do you have?
- What is your total debt?
- How much are you earning monthly?
- What’s your score on the Credit Bureau?
3. Think of three things you want
The focus is not in how to achieve those goals and define objectives, that comes later, at the end of the year. But at least think of three things you would like to accomplish (that have to do with money) one in the short term, one in the medium term and one in the long term. If you can’t think of anything, you can look for financial recommendations for each stage of life, or we can simply tell you the most classic examples:
- Short: Going on vacation next year.
- Medium: Buy a car.
- Long: Buy a house.
4. Visualize three expenses you will not make next year
They say that man is the only animal capable of stumbling over the same stone twice, and we know that sometimes we spend money on something, just to regret it…and months later, we do it again. So decide now on three expenses that you are 100% willing to give up. Remember that we fall into many unnecessary expenses just because they satisfy an immediate desire, but Delayed Gratification brings better results.
So decide now on three expenses that you are 100% willing to give up.
To better get along with our money, we must earn more, but also spend less. We remind you that it is possible to live better with less, and you can start by swiping your house and taking out all of your rubbish. If you can’t think of how to cut expenses, here are some ideas: check your hidden costs, or just realize that you can live without one of these services:
5. Focus on saving money
We all make money mistakes, but if you want to reach your goals, you need to focus on saving. Maybe you can't start today, but start saving tomorrow. To be on the right track, we recommend three basic things:
- Following the 50-30-20 rule
- Save 20% of your income
- Keep track of your expenses
6. Acquire an Investment Mentality
It doesn’t matter if you already have under control the savings issue or not. Either way, start thinking of yourself as someone that invests their money…that’s the big difference between rich and poor.
Investing is not exclusive to millionaires, did you know that you can invest with as low as $5 dollars? Did you know that Warren Buffet started investing at the age of 11? Stop thinking like a consumer and start thinking like an investor.
7. Hack your life for more money
We believe that the secret to reaching our financial goals is something very simple: discipline and consistency.
But sometimes it’s easy to lose motivation, so here are some ideas for you to consistently gain personal finance insights and stay in line with what you really want:
- Create a basic budget. Don’t let your money go somewhere without you knowing where.
- If you see something about money every day, you will improve your relationship with it. So turn on notifications on Facebook to be notified when we post something on the Dear Money Fanpage.
- The best way to change something is with small daily efforts. Learn about habits, special attention to the habits of millionaires.
Article translated by Rodolfo Schaefer
