Reality Transurfing: Tailoring your military-to-civilian career

Today I answer questions in regards to anything from filling out an application all the way to landing the job interviewing and how to get promoted. A couple of veterans asked me questions in regards to their age. Being a specialist who used to deal a lot with the military I want to give you a piece of advice I shared with them before.

And lately I’ve had some interactions with a few veterans who have retired from the military, and they’re concerned about their age, and they’re concerned about being able to find a job. Another job in there on what we call the encore career, and they’re thinking that the millennial, younger people will be more qualified than they are. And so I told to these veterans is that we’re going to do is to work on their resume to highlight the skills that they had from the military.

You can hire a resume writer. There is even a separate service, so- called military to civilian resume writing services, which specializes in writing and taloring resumes for military professions. These specialists are people who can make your resume from scratch. So that you can give yourself a boost on the competition of the younger workers by having a knock out resume and tailoring it specific to the job that you are applying for. That make you look like a perfect match for their company.

Transferring you military background into civilian world skills set

Both of these ex-military guys retired, they were in for several years. Actually, one veteran was in for closer to 20 years and the other one was in closer to four or five years. But there’s a big difference, they still both attained a ton of skills, that they can transfer over to the civilian world.

And so what I told them to do is align some keywords in their resumes with keywords in the actual job description. But for every job that you plan to apply for you should be doing a new resume. It’s a lot of work but think about it, it’s worth of it in the end, if It helps you land a job, rather than being unemployed.

It depends on your situation obviously. So what you have to do is skillfully take keywords from what you did. For example, one of these veteran was a captain in the army, he was over a group of people. So there he has supervisory skills, he has managerial skills and it shows that he has leadership skills, because he was over a number of people.

And what you do is according to the Job Description? You tailored that to fit. You tell your leadership skills that you required and you put that in a quantifiable form on description on your resume.

So let’s say, that this particular former military army captain had ten people on his team that are in his department and what he would stay in or in the regards to the job at that he led a team of ten squad mates. He was states the goal, and he was states the ending result. So you always make it looks positive, always make sure, that you have numbers in your description. So you’re tailoring your resumes and also put in the results that you obtained and it should be positive.

It’ll be positive results, that’s a way to show that your skills from the military translate over to the civilian world and you don’t have to worry about age, just to make sure that you have a knock out resume.

Do you know how to become a successful investor: three control questions

Do you want the savings to work and generate additional income? It is quite possible to organize. Just be prepared for the fact that the money will not work on their own, but with your active participation.

The depositor can take the savings to the bank, place a deposit and forget about the money until the expiration of the set period. The investor must monitor the situation on the market, periodically weigh the actual risks and benefits.

Do you have free money – at least 30 thousand dollars?

“I have an amount, without which I can easily live until the next earnings. It is urgent to invest it in something … “, – says the person who decided to manage personal finances with utmost rationality.

The correct train of thought? Yes – on one condition: if this person already has a financial pillow. Each of us needs to have in stock the amount that is enough for six months of normal life. These means are not worth the risk. A deposit is the best option for saving them.

Investing is always fraught with a share of risk, even if in some cases it is minimal. The money of citizens stored in banks is protected by the state deposit insurance system, and the clients of mutual investment funds or, say, insurance companies act on their own responsibility.

Are you ready to learn new things?

Inexperienced investors believe that they are participating in a kind of game. They are wrong. Financial instruments do not function at the whim of Fortune, but according to completely recognizable laws. If you want to be the winner, try to understand how the whole system works.

First, you need to get an idea of ​​the main ways of investing.

Secondly, you will need to familiarize yourself in detail with a tool that seems appropriate to you. Do not limit yourself to articles from the Internet. Pay attention to the books.

Among foreign benefits of this kind, the “Reasonable Investor” by Benjamin Graham is most popular. Of the number of domestic publications, the book “Your Money Must Work,” by Vladimir Savenok, certainly deserves attention. Of course, the list does not end with two items.

The ideal option is to take courses for beginner investors instead of self-learning. They are organized by many brokerage firms.

Do you know how to manage your own emotions?

Although investing is not a game, it stirs up excitement: prices on the exchange often fluctuate, it always seems that a little more, and the moment will be missed … You cannot give in to feelings, otherwise you will have to bite your elbows.

Suppose you read an article and doubted: it takes time, attention – maybe it is better to postpone the venture until better times? Do not rush to give up the good deed.

No one forces you to dive into investing right away. Try to master it gradually, using the services of a competent intermediary – a company engaged in fiduciary management of finances.

At your own risk: what is the danger of investing in your own business

Most wealthy people want to save money and protect them from inflation. But what to do with your own assets?

At the dawn of my career, I heard the phrase of one of the leaders of the current Forbes list: there is business, but there are personal assets, and these concepts need to be separated. This idea seems to me very true. Successful periods do not last forever, and you can wake up at some point with the realization that all the funds were invested in one object and … burned out. It is a pity, many do not even think about it.

A key aspect that people often underestimate in business and overestimate in portfolio investments is risk. When discussing with a potential client the feasibility of forming a personal investment portfolio, financial advisors often come up against the objection: why do I need this? Why invest somewhere if you have your own business that brings real income? Why consider conservative investment strategies and financial instruments with an expected return of 5% in dollars if the business brings many times more?

Let’s look at the statistics. According to the unified state register of legal entities (USRLE), for two consecutive years, commercial companies have been created about one and a half times less than they are shutting down (430,000 compared to 699,000 in 2016, 390,000 against 592,000 in 2017). According to the estimates of the Center for Macroeconomic Analysis and Short-Term Forecasting, the number of bankruptcies in December 2017 reached its maximum value in eight years. The saddest situation is in the construction industry and trade, but in other non-industrial sectors, the intensity of bankruptcies is growing. At the same time, there are more and more large bankrupt companies.

Unfortunately, people tend to overestimate their capabilities. Credit risks, market, counterparty, operational, technological, currency, country, regulatory, as well as risks of force majeure and unlawful actions – all this can create conditions under which the existence of the business becomes impossible, and, as a result, lead to loss assets. This is reality. Neither businessman nor investor can avoid risk, however, they have the opportunity to hedge it.

According to my observations, successful companies often develop solely at the expense of owners’ capital. However, many have the opportunity to attract debt financing, replacing them with their own funds. Why borrow if you have your own assets? In my opinion, there are three main reasons for this.

First, you insure against the complete loss of your assets. In case of failure, you will have a chance to “restart” the business and take care of loved ones.

Secondly, the availability of borrowed funds increases the return on invested capital. At the same time, a business that brings stable income will cover interest on debt servicing.

And in some situations, with the help of borrowed capital, you can protect your company: the correct ratio of equity to debt burden can make a business unattractive to third parties, and therefore reduce the risk of “hostile actions”.

Of course, debt is also a risk. But this is not an absolute evil, even in a situation where there is no need to attract it. Borrowed funds are a bank loan or corporate debt. In Russia, the volume of loans issued by banks to non-financial organizations is three times more than issued corporate bonds. At the same time, last year the volume of corporate bonds in circulation grew by 36%.

There are several reasons for this. Firstly, the decrease in inflation and the key rate of the Central Bank allows borrowers to raise funds at a lower percentage. Secondly, the fact that banks, large institutional investors, experience a surplus of ruble liquidity and a shortage of high-quality issuers plays into the hands of those wishing to raise funds in the stock market. Thirdly, citizens have serious benefits that spur demand for debt and increase the size of the market itself: since the beginning of 2018, coupon income on bonds (issued since January 1, 2017) is not taxed, as well as on deposits.

You should not think that the stock market is accessible and useful only for large businesses. And while for now the main borrowers are precisely large companies with high credit ratings (about 70% of all new placements last year fell on them), I am sure that the situation will change.

Another question: what to do with own assets, which are put aside? There are no universal recommendations: investment tools and methods are selected depending on the goals and when you are going to start spending your savings. Most wealthy people want to save money and protect them from inflation – they invest the bulk of the portfolio in the debt market and investment funds. There are those who are willing to take risks – they increase the share of stocks or high-yielding bonds, play out individual market situations. I see many portfolios of wealthy clients – and among them there are no identical ones.

In my estimation, wealthy clients invest more than 55% of their assets in debt instruments, 30% in stocks, the rest in foreign currency and alternative investments. People begin to better understand financial instruments, so they are ready to consider hedge funds, private equity, venture funds and individual projects.

Wealthy people change their view of investment. If five years ago, almost 100% of our clients ’funds were invested in securities with Russian risk, today it is already less than 50%. A tenth of the total portfolio is invested in securities of emerging markets, a quarter – in the US, the rest – in the assets of European, Asian, Arab countries. Today, people reasonably believe that if they assume the risks of doing business in one country, then their savings should be distributed as much as possible.

The correct result of managing personal money is a situation in which, at the time of the end of your employment, investments generate a cash flow that is sufficient for all your needs. This is a minimum program, and it is achievable. You can judge how effective investments can be by this Forbes rating: many of the leaders on the list are owners of public companies whose securities grow and bring investors outstanding income.

The Millennium Generation: Who Changes the World of Financial Services

Without irony, a woman who seeks to change the world of financial services gives us an interview in a conference room named after her by Warren Buffet, who does not trust new technologies. She lists applications that have changed the way she communicates with the world for her generation: Uber for transport, Tinder for dates, and even Washio for laundry and dry cleaning. “By pressing the buttons on our phones, we can do whatever we need when we feel comfortable,” says a thirty-year-old New Yorker with a name more suitable for an eighty-year-old baroness.

Alexa von Tobel is sure that the world of financial services has ripened for the landing of young people with gadgets. And her company LearnVest has already begun an invasion of the area. Von Tobel has created a website and an app with which you can manage your money just as easily as we download music or shop on Amazon. For five years, she raised $ 72 million, including from Accel Partners Fund, Jim Breyer, one of Facebook’s first investors. During the April $ 28 million round, LearnVest was valued at a quarter billion.

Easy Money

And von Tobel is not the only one. According to CB Insights, over the past three years, more than $ 1 billion has been invested in high-tech personal finance management companies, only in the second quarter of 2014, investments reached a fantastic level of $ 261 million. Particular attention is paid to startups designed for young investors using convenient, Cheap, mobile-friendly software.

What are these startups? For example, Wealthfront, which helps young tech employees convert options into a diversified portfolio of exchange traded funds (ETFs). Betterment, automating the accumulation and placement of assets. Motif Investing, which allows small investors to invest in a business idea (for example, in the Chinese Internet or in cyber currency), and not in specific securities. “The generation of the millennium cannot be said:“ Trust us, go to sleep and let us manage your money, ”explains Motif Hardip Valia, 41, founder and CEO of Motif. “We want to attract them to our business.” All these companies have one thing in common: they are practical.

All of them require thoughtful leadership, long-term planning and the use of new technologies to reduce costs.

“I do not want to invest in only one company or in one sector. At the same time, I don’t want to devote all my efforts to managing my money, ”says Christina Cordoba, a 26-year-old Stanford graduate who invests with Wealthfront and forces the startup where she works to offer her a retirement plan. Maybe this is a manifestation of one of the few good consequences of the crisis that gave rise to the greedy generation, knowing the price of each dollar and the need to save at least one from the salary.

The stakes are very high. Public attention is drawn to people in their twenties returning to live in their parents’ home, or Lena Dunham and her part-time workers and mourning her fate as a girlfriend from the TV series Girls on HBO. Financiers see completely different representatives of the generation. According to Wealthfront, the millennium generation, which includes young people born after 1980, controls approximately $ 2 trillion in liquid assets. And this amount will grow significantly in the future, since it is precisely this generation that is now reaching the age most favorable for making money. In addition, a massive transfer of money to them begins from their parents, who belong to the baby boomer generation.

“We are influential people”

Financial startups and actively competing companies specializing in the management of inherited property, not only consolidate the savings of the millennium generation in their hands, but are also going to use this generation’s way of thinking for online innovations in the field of budgeting, planning and money management, which in turn will change the investment industry worth more than $ 30 trillion.

People in their fifties today gobble up Netflix online TV shows, send text messages, informing them that they are late, and trolling people on Facebook is no worse than their children. “The tipping point has already been passed,” says von Tobel about his generation. “We are the decision makers, we are influential people.”

And, as von Tobel is constantly convinced, – its stake in LearnVest theoretically costs tens of millions – those who help the millennium generation to gradually create small states can very quickly create several large ones.

Stephanie Halligan graduated from college in May 2009 and is a living confirmation of all the stereotypes about her generation: she clearly had no one needed a diploma (international relations), she received too expensive a private education (at Boston University), because of which she ended up in debt ($ 30,000) without any hope of employment (due to the financial crisis and the worst situation on the labor market since the Great Depression).

But at that moment, when it seemed that she had years of preparing frappuccino in Starbucks near her parents’ house, an interesting thing happened. In her final year at college, she volunteered at a charitable foundation in Boston, organizing personal finance classes for refugees, and she was invited there for an internship with a scholarship of $ 1,000 per month. In the fall of 2009, thanks to this experience, she got a job in Washington for $ 47,000 a year and began developing educational programs on cash savings for the poor. In 2012, she switched to a higher-paying job at EverFi, an educational high-tech company whose investors include Amazon founder Jeff Bezos and Twitter co-founder Evan Williams. A year ago, Halligan paid her tuition loan and accumulated enough money and self-confidence to engage in private practice as a financial advisor. “I got rid of debt because I wanted freedom,” says Halligan, who already has $ 50,000 in her retirement account, and this amount continues to grow.

Helligan embodies everything that makes the millennium generation such a grateful audience for the financial industry. Baby boomers grew up in abundance in post-war America and are used to constantly spending money. The cynical generation X (people born between 1965 and 1980) perceptively realized that neither the government nor business would take care of them, and therefore began to take risks very early. The generation of the millennium was spoiled by its caring parents, and then immediately frightened by the crisis.

It has become a generation of drives

Of course, those young people whose education was limited to high school are today in the worst situation for all the last decades. But here is an amazing statistic: according to the Pew Research Center, in 2013, 34% of people aged 25 to 32 had at least a bachelor’s degree compared to 25% of bachelors in generation X and 24% of baby boomers of the same age. Despite the catastrophic situation in the labor market over the past five years, college graduates from the millennium generation earned more than generation X graduates at their age – according to the Pew Center estimates, $ 45,500 in 2013 versus $ 43,663 in 1995.

Of course, student loan payments have increased, and university degrees will certainly slow down the growth of capital for the millennium generation. But in May, in St. Louis at a conference on personal budgeting issues, speakers seemed more concerned about the situation of Generation X, who was buying houses at the peak until the collapse of the real estate market. Conclusion: well-educated representatives of the millennium generation are the “premium customers” desired by all financiers.

Familiar technology

One of the reasons for the desire of young people from youth to save money is the desire to be confident in their future. Few of them believe that they can get anything from the social security system. In addition, they appeared on the labor market just at the moment when the US Congress facilitated the introduction by companies of an automatic mechanism for implementing the 401 (k) pension program in 2006 (according to Aon Hewitt, today about 60% of employers use this program).

Result: many of the millennials began to think about retirement when they were in their twenties, while baby boomers began to delay on average at the age of 35.

Ironically, this generation that has grown up in the digital world understands the breakdown power of new technologies and is therefore in the best position in the history of mankind to launch powerful business projects (as a result of which the zuckerberg brands and kevins of the systroma have been incredibly rich). But in general, these people are too afraid of risks to leave a good job for the sake of a risky enterprise. Last year, when the labor market began to recover, and the number of “compelled” entrepreneurs began to fall, the number of start-ups started by people aged 20 to 34 was less than in any other age group. And two times less than people aged 45 to 54 years.

“They don’t want to live, constantly thinking about making money,” says Neil Hove, probably America’s largest generational theory specialist.

Certainly, Halligan took up private practice primarily because she wanted to be her own mistress. This summer, she spent six weeks in Africa and, in particular, climbed Mount Kilimanjaro. She has been saving money for this journey since 2012. Slow but sure climbing a mountain is how most people in the millennium generation make money. And this opens up many opportunities for the financial services industry.

Invest effortlessly

So what should be the financial services for the millennium generation? Maybe you should start by making the investment process look like a computer game.

New York-based brokerage firm Kapitall allows you to invest in securities using an interface worthy of an arcade. “If you want to understand current financial services, you will need a master’s degree in this field, or you won’t understand anything at all,” says 52-year-old executive director Jarret Lilien, who previously managed an online trading company. “That’s why financial services depress people and appear to be accessible only to the elite.”

Today, people who are over twenty, two times more likely than representatives of older generations to play computer games. But it is not easy for them to deal with securities. A recent UBS study showed that investors between the ages of 21 and 36 hold only 28% of their assets in stocks, and more than half in cash. Representatives of older generations hold 46% of assets in shares and 23% in cash. Here is one of the possible solutions proposed by Kapitall: stocks that can maximize growth are represented using icons reminiscent of iPhone icons, and each sector of the economy is painted in its color to visualize diversification. To date, this company has 15,000 broker users (plus 250,000 virtual trading accounts).

At the heart of the Upstart model is another attractive concept for young people: crowdsourcing. This site, where people can lend money to each other, determines the creditworthiness of potential borrowers not only by their short traditional credit histories, but also using a special algorithm that uses information about the school that these people visited, about their grades in college, about diploma, previous work places and even the results of tests for testing academic abilities. Upstart was created in April, it considers requests for loans with a fixed interest rate from 6% to 17.5% and takes a commission from 1% to 6%. He has already funded around 400 loans.

“Some of these people will be very rich and make a wonderful career, you just need to understand who it is,” explains one of the creators of Upstart, 23-year-old Paul Gu, who studied economics and computers for two years at Yale, and then received one of $ 100,000 scholarships given by billionaire Peter Thiel to those who have left college to pursue entrepreneurship. Created in collaboration with former Google executives Dave Jiruard and Anna M. Kaunselman, Upstart raised $ 7.7 million from the star cast of venture capital firms – in particular, Thiel’s Founders Fund, Khosla Ventures, First Round Capital, Kleiner Perkins, New Enterprise Associates, and Google Ventures . The next investment round is expected at the end of this year.

But most startups, often called “consultant robots,” such as Wealthfron, Betterment, Future Advisor, and SigFig, combine algorithms and easily accessible interfaces to create cheap ETFs, while using modern portfolio theory based on the age and goals of specific investors. “Fifteen years ago, investors thought: I need a guru who could surpass the market. Today, most people no longer think so, ”explains Bill Harris, a financial computer technology veteran who was Intuit and PayPal’s executive director in the 1990s and founded Personal Capital focused on the high-end market.

Mistakes in personal finance management

The ability to properly manage money is a particularly valuable quality in the context of the financial crisis, when the purchasing power of the population is reduced, inflation is rising, and exchange rates are completely unpredictable. In our gallery – common mistakes in money matters and the advice of financial planners on how to learn how to properly manage your own finances.

Mistake number 1. Do not keep a budget

A budget is generally the most basic thing in financial planning. Therefore, it is especially important to be careful when compiling it. To begin with, you should make your own budget for the next month, and after a while, get busy with the annual one.

Take your monthly earnings as a basis, subtract from it such regular expenses as paying for housing, transportation costs, then allocate 20-30% for savings or paying a loan, mortgages. The rest can be spent on life – going to a restaurant, entertainment, etc. If you are afraid that you can spend too much, limit yourself to a certain amount in cash in weekly spending.

Mistake # 2. Pay unnecessary bank expenses

If your bank charges you a fee or commission for additional services that you might not even be aware of, you should consider switching to servicing at another bank.

To do this, try to study in detail the offers of different banks in your city. Choose the bank that will require you to pay a minimum fee for your services. When you decide to change the bank, make sure that your previous account is not closed until the last payments on the account have been made.

Mistake # 3. Do not leave a will

If you have children, if you have co-owned housing, if you are a business owner, then you must have a will. Otherwise, in the future, when the question of inheritance arises, conflict situations may arise. Therefore, it is worth making a will, even if you are still far from retirement. And be sure to use the services of a good lawyer.

Mistake number 4. Do not take out disability insurance

“People don’t like to think about death and disease, that’s understandable. And those who think about it, think that the worst that can come is a sudden death, therefore they often insure life. But it’s more important to take into account the more likely scenario namely, the inability to make money, “says Sofia Bera. Be sure to take full life and health insurance. If you already have such insurance, carefully study the insurance conditions so that the contract provides options for different occasions. And of course, we hope , what insurance that you’ll never come in handy.

Mistake. 5. Do not insure your life

It is very important to insure life if you have young children or elderly parents that no one else can take care of. See different insurance options to avoid overpaying for the contract. Perhaps you will have enough insurance covering a period of 5 to 30 years, that is, the time when the children are still dependent. Explore the offers of different insurance companies. Use the services of an expert in financial planning – he can offer the best insurance option.

Mistake number 6. Use investment expert advice for financial planning

“A personal investment expert can help with matters of investing money, but he is not always able to see the full picture of your financial situation. So, he does not need to know if you have funds for additional long-term investments and whether you have postponed enough for unforeseen expenses” – says Sofia Bera. In addition, the investment expert will also not be able to advise which insurance is better to choose and in which bank to open an account.

Mistake. 7. To think only about the return on investment

“Usually when people plan to make investments, they only think about profit and don’t think that there may be losses,” says Harold Evenski, president of financial management company Evensky & Katz. He says that sometimes people don’t do basic mathematical calculations. For example, they forget that if in one year they lost 50%, and the next year they got 50% of the profit, then they did not return to the benchmark, but lost 25% of their savings. So think about the consequences. Get ready for any options. And of course, it is wiser to invest in several different objects for investment.

Mistake number 8. Believe ratings and forecasts

“People usually look for quick ways to make a decision,” says Evenski. Everyone loves to rely on ratings or read expert forecasts. But in today’s world, things are changing too fast. And today’s experts and ratings in one day can completely change. ” Therefore, do not expect that investment next year will behave the same as in the past. “Investors earn far less than their funds because they buy securities at their peak, and it is at this point that the recession usually begins,” says Evenski.

Mistake. 9. Do not pay credit card debts on time

Often, when using a credit card, people more easily make the minimum payments proposed by the bank (usually 10% of the total debt), feeding themselves the illusion that they have settled with the bank. And then a few months later they are surprised to find a huge amount of debt on the card, because in addition to the accumulated figure of the main debt for a long period, interest was calculated on it, which in credit cards is the highest percentage for loans. Therefore, pay the full amount of debt for each statement on the date provided by your bank, and not just part of it.

Mistake. 10. Have a credit card limit that exceeds monthly income

If a credit card gives us the opportunity to use the amount higher than our salary, we can succumb to the temptation and spend more than we actually can afford. Late payment of credit card debt can result in high interest rates. In this regard, contact your bank and ask to lower the limit on your credit card.

5 ways to reach salary

Define a budget

This tip is not very relevant for those who have already spent everything. Nevertheless, holiday spending is a predictable phenomenon, so it’s worthwhile to determine in advance the amount that you are willing to spend these days. To avoid the temptation to spend more, you can defer part of the December salary to another account. It would be better to transfer part of the January spending to December, when there was still money. However, now it’s too late.

Unsubscribe from coffee shops

Walking through the winter Moscow from the metro to the office with a glass of coffee can be very pleasant. But in recent days, before the salary it is worth restricting visits to catering outlets. Remember, we wrote that the cost of a cappuccino for 200 rubles is about ten times lower? Good reason to temporarily switch to drinks from the office coffee maker.

Optimize expenses

It is worth considering how to optimize some costs. Maybe temporarily change to the subway and save on gas? View a list of paid applications and services that you are subscribed to and refuse unnecessary? This will help save more than just in January. You can reconsider spending on food: perhaps you should temporarily refrain from dessert or a chilled steak or buy less food so that you don’t have to throw it away later.

Remember bonuses

All kinds of discount cards of supermarkets, which you can’t always remember when going shopping, will also help reduce spending. Such cards are issued to encourage people to spend more, but if you take shopping carefully, you can save. It is also worth remembering about cashback on cards: depending on the bank, you can go to it in a cafe or refuel (if you have spent a lot before, you should accumulate enough points).

Use interest free period

If there is no money left at all, you will have to borrow it. Not everyone is comfortable asking parents or colleagues about this, so you can use a credit card with an interest-free refund period. The main thing is not to forget to return everything from your salary and next time to carefully plan your expenses.

How not to get into debt with a small income

It’s always important not to get into debt, no matter what income level you have. But this is especially critical if you do not earn very much. And this is quite real, although it requires a bit more work. In this article, we will look at a few reasonable ways to avoid low income debt.

The tips in the article will not make you millionaires, but will not worry about paying bills, vacations and minimal savings for the future.

  • Keep your optional expenses to a minimum

To break out of a series of debts, try 1-2 months to live with austerity. Cancel trips, do not go to restaurants, unsubscribe from all subscriptions that are not related to your work, use public transport, do not order food home, watch movies at home, buy the simplest foods and refuse to buy clothes so much as not to throw out food. The important thing is that we do not urge you to live that way. This is morally and physically difficult and will only lead to disruption and uncontrolled spending.

But trying to save as much as possible for a short period will help you partially close your debts and feel confident in your abilities. After the experiment, analyze what things it was not difficult for you to refuse, on which you saved the most. Then return to your previous lifestyle, but considering all your conclusions. If you adjust your financial behavior so that you save even only 10% of your income – this will be a great success.

  • Invest at least 10% of your income – or any other amount that is comfortable for you

Make it a rule to immediately set aside a small amount of your income for investments – this amount can be obtained from the previous paragraph. Open a long-term deposit with capitalization of interest and the ability to replenish it. Consider investing in ETFs. Remember that long-term investments are most beneficial. The specificity of the market is that in the end it always grows, despite temporary downturns in the process. If you cannot decide the minimum amount needed, use the retirement calculator. He will tell you how much you need to invest in order to go on vacation at a certain age.

  • Say no to instant gratification of big desires

The monetary habit that separates the rich from the poor is to delay large, sudden purchases. Make it a rule and agree with your family: you save any major purchase (say, from 3000 rubles) for at least 24 hours. Don’t be fooled by marketing tricks such as “just for you today.” In today’s world, it’s hard to really miss out on big gains. If you miss the discount today, there will be another tomorrow. And to buy unnecessary goods even at a big discount is a waste of money. 24 hours is enough for a momentary desire to cool, and you really realize whether you need this purchase. Plan large expenses in advance – such as holidays, repairs, cars, seasonal clothes, child education, and equipment.

  • Create a new budget

After you go through the 3 previous steps, you will already have an understanding of how much and what you can save on, so as not to get into debt, how much you can actually save monthly and how to plan large purchases correctly. Now it’s time to draw up a new budget. In addition to the planned revenues and expenses, the budget must specify financial goals with specific terms and priorities, a loan / debt repayment plan and a savings plan. If you have difficulties with budgeting, read our article “How to keep a family budget” – you will find 5 specific recommendations in it.

Creating your first debt-free budget can be a daunting task. But if you approach the issue systematically and gradually, you will surely succeed. Write if you manage not to get into debt, and subscribe to our blog so as not to miss the next useful article.

5 steps to creating a budget that works

Many people think that keeping a budget is a difficult and unpleasant task. But this is not so. Here are five easy tips from Business Insider to turn cost planning into a good habit.

  • Share wishes and needs

You have needs – housing, wholesome food, travel, clothing. It is necessary to spend money on them. And there are desires – fast food, sweets, coffee with you, alcohol, cigarettes. If you separate them from needs, you will save a lot.

This does not mean that spending on desires should be excluded. Get them a separate column in the budget. When you see how much money this month will go into bad habits, you will probably want to get involved less often. Put the saved money on a deposit or card with a percentage on the balance.

  • Include the miscellaneous category in the expense

It is impossible to predict every waste that you encounter during the month and even more so the year. An unexpected car repair or illness can harm the budget. Enter the miscellaneous category in the planned expenses and save some of the money in case of unforeseen situations.

  • Record your savings in expenses

Select the amount that you will save from each income. Try to replenish the piggy bank immediately, even before you pay bills, loans and other expenses.

If you include the category “Savings” in the column of expenses in the budget, most likely you will treat them more responsibly. The most effective option is to set up an automatic transfer of the amount or percentage from each receipt of money to a bank account.

  • Relate budget to life goals

Personal finance consultants are convinced: it is very important to build a budget in accordance with your goals and values. For example, someone dreams of a good car, and someone is ready to use public transport, but at the same time intends to buy an apartment. If you know what you want in life, this will help you decide on long-term expenses and start saving on them.

Do not forget about the family budget. It should be consistent with the goals and values ​​of each member of the family.

  • Keep receipts and receipts

Not necessarily in paper form. They can be photographed, saved in an Excel file or in a mobile application. Bank statements and expense reports in bank applications are also useful. Accurate spending information will help you more accurately predict costs when budgeting.