Make more out of your money? These 5 financial rules help you save clever, reduce debts and use your assets.
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Especially if you are planning a larger investment in times of high inflation and want to save money, you should consider a few things to make your money sensible. To do this, it is important to take a closer look at your own finances. In order to create an overview of your own financial situation, you should first list income and expenses. A budget book is ideal for this.
Afterwards you know how high the monthly fixed costs are and how much you spend on other things. This also results in an amount that you can save every month. But what happens to the money then?
We have put together 5 financial rules for you, which you should always consider if you want to make more of your money.
1. Pay debts
If you have more money, the money should always flow into the repayment of your debts. Special repayments are possible for many credit contracts. In any case, you should make use of this before you put the money elsewhere. The reason for this is that loans are usually more expensive than the profit that you achieve through an investment. Therefore, the repayment of your debts should always be in the foreground.
In addition, investments such as a car or a house are also part of your assets. However, these invests must first pass into your possession. As long as you haven't paid them off, they are actually not you.
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2. Set investment objectives
Before you put on money, you should always set a investment goal, as your investment also depends on your savings goal. Ask the question of what you actually save for. Do you plan an expensive vacation, do you want a new car or do you plan to buy a property? Depending on how expensive your wishes are, you also have to save more.
If you want to buy a property in the next three years and want to save equity, you should not invest the money for example for over ten years. However, if you want to save for your retirement provision, an ETF savings plan is worthwhile, for example.
3. Keep an eye on inflation
Your money is less worth the money during inflation. To illustrate this using a simple example, you can imagine a ball of ice cream that cost a euro a few years ago and now costs two euros. So you pay more money for the same product or for the same performance.
In principle, saving is less worthwhile during inflation. Nevertheless, with the right strategy you can get more out of the savings.
4. Risk scatter
The following applies to both stocks and any other investment: you should never put everything on one card. A good option is the investment in ETFs because you can spread broadly here worldwide. Nevertheless, your portfolio should consist of a mix of overnight money, fixed deposits and ETFs. Depending on what you prefer yourself, you can also invest in real assets such as in art or in classic cars if you are familiar with it. Nevertheless, this should only make up a small proportion of your portfolio, because this is also associated with higher risks, or not every real value is also crisis -proof.
Attention: The higher the return options of your system, the higher the risk. You can add your investment depending on the risk behavior as you want, but you should not invest in anything, which you don't know about it!
5. Att aside
Another important financial rule revolves around the money reserves. Let's say, suddenly the washing machine breaks or the refrigerator gives up the mind. Usually there is not much left than buying a new device and that can get a lot of money. Even worse: the car breaks and has to be repaired extensively. This also causes high costs. For such unforeseen expenses, you should always add an emergency sig.
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A call money account is the most available for your money reserve. Because this is not a fixed system. You can do your money at any time if you need it. When it comes to how high your emergency sector should be, the spirits differ. But you can tell that you are on the safe side with three to six monthly salaries.
Savings plan, pension scheme, stock investments-dare to dare and actively deal with your finances. Read up and get advice. So you get the best out of what you have. Your financial freedom is in your hand.
