The right way to handle money needs to be learned!
But it is almost unbelievable – about 20 to 30 percent of Germans do not understand their own finances or at least some parts of it.
We want to give you some tips to help you learn how to use money and make more money out of it. The wise use of money is important for greater financial freedom. Optimizing finances is not that difficult, you just have to want it and do it.
Rule 1: Keep a household book
Even though some people still laugh at the budget book, the fact is, who keeps a budget book, knows his income and expenses and is thus able to counteract if the expenditure exceeds the income for a long time. The budget book forms the basis for the optimal use of money. However, this assumes that it is regularly managed and evaluated.
Rule 2: The Compound Interest
You do not need to understand how compound interest is calculated in detail. But they should follow the golden rule, which also makes cattle foolish and compound interest contributes to the fact that you can build a large fortune even with small amounts over a correspondingly long period.
Money worries do not have to be and even excuses like “I’m still young, I can save later” or “I just can not handle money” are taboo. Almost everyone has the opportunity to set aside some money each month to save on a regular basis and benefit from compound interest.
Rule 3: Invest money in yourself
The best investment is not necessarily in stocks or other investments. In the foreground is the human being. Invest money in education, health and the future by creating home ownership. If you take advantage of your opportunities here, you will continue your career, earn more money and become successful and happy.
Rule 4: Let the expert advise you on money matters
It is a truism that you have to know yourself in money matters. Why, too? If you are sick, you go to the doctor, if the car breaks, you go to the garage. Therefore one should not refrain from the advice of experts even with money. Tax consultants and independent financial advisers help in money matters. The costs incurred can be amortized within a short time, because the expert advice is worth the money.
Rule 5: Saving only makes sense if there are no debts
Especially in this day and age, when savings are unlikely to yield more because of low interest rates (2014), it is more important than ever to pay off the debt first and then save it. It is not wise to take out a cheap loan if you have money on the high edge. Anyone who has money available should always try to pay off the debts first. Debt interest is always much more expensive than interest paid for saving. Therefore, loans are always to be treated with caution. Anyone who has to borrow to make purchases should not do so without first making a loan comparison to save money, at least on lending rates.