Part 1: Reasons of Investing Money
Part 2: Millionaire’s Money Mindset
How to Get Out of Debt and Start Saving
You must lessen your debts, much better if you can remove all your debts and change them into assets. Having a lot of debt can bring you a lot of financial trouble. To lessen your debt, you must pay the small debts first then followed by the big ones. You much pay the debts first that has high loan interest rate than those debts that has no interest.
Learn how to lessen your debt or totally get out of debt using effective money management principle.
|Get Out of Debt | Photo Credit: Images Money CC 2.0|
Prioritize Your Needs
Beginning today, do not get into impulse buying. Just buy the things you really need. Prioritizing your needs can help you to get out of debt and help you how to spend your money wisely. Budgeting has a big goal for this one. When making a budget, you have to decide how much money to spend each item. Organize and itemize the products you really need.
Avoid Credit Cards
If you can’t avoid credit cards, you must at least know how to use credit card with disciplined. A credit card has its own advantages and disadvantages depending on the credit card holder. When applying for a credit card, it is advisable to get those type of credit card that has no annual fees, (or low annual fees), those credit cards with rewards points to maximize their benefits and those credit card that has low monthly charge.
Manage Your Finances
You have to learn how to manage your finances. Aside from budgeting, you must know how to save and invest money. Managing your own finances is very easy. Every time you received your salary or business profits. Just cut them into 5. A large percentage for necessities, maybe 60% of your income and the rest are both 10%.
- Savings and Investment Funds – a money to set aside for your financial future.
- Giving and Donating Funds – a money use when attending church worship services.
- Necessities Funds – money use to buy all your needs.
- Recreations Funds – money use to enjoy life (movie, food, travel, etc.)
- Education Funds – money use to educate yourself personal finance (seminars, books)
You have to follow the law of attraction, if you always think debt, you will always get debt. If you always think prosperity, you will get prosperity. It is recommended to read the book of Rhonda Byrne, “The Secret”, there is a chapter entitled “the secret to money”, wherein it can teach you how to attract wealth.
In our next topic, the part 4 of how to invest money series will be related to emergency funds. Know the importance and advantages of emergency funds. Why should you build emergency funds first before investing your money.
As a guide and continuation, have time to read “How to Invest Money? Part 4: Building Emergency Funds”
Learning on how to get out of debts and start saving money will be easy if you are following the basic principles of personal finance. You don’t need to be an accountant or a financial expert before you invest your money. All you need is proper knowledge and willingness to learn investing.