What Does The 1 Represent In The Compound Interest Formula 8 Money Tips to Live by – Revamping Your Spending Habits

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8 Money Tips to Live by – Revamping Your Spending Habits

Spending habits, good habits, are an important part of our lives, and like any habit, we can learn to control our spending habits by practicing. Below are 8 money tips that we should develop to live by so that we can control our spending habits:

1. Pay attention to the interest rate

If you have loans, try to pay the one with the highest interest rate. Search with the best/highest interest rate to save. Always check your interest rates on both savings and debt – compound interest can be your best friend (savings) and your enemy (debt). Check out this formula to find compound interest on savings.

2. Have a budget

Net income is what you budget for! Not the money you expect somewhere! Not the money so-and-so promised you! And definitely not your credit card! You don’t budget for gross income, so the money your employer or business brings in before all your deductions, such as taxes, pension contributions.

Use 50/20/30 budgeting rule – divide your net income into three; 50% goes to housing, transport, utility bills and groceries, known as essential expenses; 20% goes towards your debt payments, savings, investments and pension contributions (some employers deduct this contribution from their employees’ gross pay), these are called your financial priorities and finally 30% of your net income should go towards your lifestyle choices, these include personal care, restaurants, internet, entertainment, gym membership fees, shopping and other miscellaneous and discretionary expenses.

3. Treat your money as part of you – set specific financial goals

“I want to pay off my credit card debt this year.” This statement is simply silence; it doesn’t force you to do anything. Now let’s look at this statement: “By the end of July of this year, I want to pay off $250 on my ZXY Bank credit card, and by September of this year, I want to pay off $100 on my Shop-by-Choix clothing credit card. .” The second statement is clear and makes you do something. You can divide $250 by the months until July and determine how much you need to pay each month to reach your goal, the same goes for $100 in debt.

4. Love yourself and be grateful

Appreciate the things you have first and don’t base your life on others, not even your friends, because we all follow different financial paths. Getting more materials will NOT make you happy – the more you get, the more you want.

5. Avoid co-signing a loan

If a bank requires a borrower to have a co-signer, it means the bank doesn’t trust the borrower to meet their payments, and neither should you. Co-signing for friends or family can affect your credit score if they don’t make payments and the bank can come after you.

6. Rethink what your money can do for you – invest in the stock market

One of the reasons people don’t invest is because they believe they can’t afford to invest in stocks with little money and that it’s just a waste of time, but if you start with the little you have, you’re actually making big money. a step towards increasing your wealth. Almost anyone can start investing in stocks for themselves – if they learn to be disciplined with their money. The danger of not investing now is losing time, and losing time means losing wealth growth!

7. The increase in your income should support your savings and investments

Getting a raise isn’t about automating a bigger spending habit—instead of spending more, use your raise to grow your investments and savings.

8. Apply for a reward card from your local supermarket

If your local supermarket offers a loyalty program, sign up as it can help you save on groceries by using the rewards they offer on your purchase or even by buying at a lower price than a cardless shopper. Just make sure they sell products at or below other local stores, otherwise the loyalty card isn’t worth it – the whole point is to make the card work for you.

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