It is said that we learn and heritage how to manage and save money from our parents.
However, today a lot of things are changing, and attitude towards money is changing as well. Therefore, some of the classic money-saving tips can be very true, and some of them might be pretty outdated as well.
5 Money Saving Rules to Re-Think
Here are a few rules that will help you understand what you should change in order to feel financially stable for a rest of your life!
Rule 1) Always spend less than you earn
In fact, this is an excellent idea, because it is a very natural condition for a human being – the more we earn, the more we tend to spend as well.
But take notice – if all those additional purchases are only your wishes and dreams, rather than something significant and crucial for your comfortable lifestyle, start rethinking the way you are spending your money and maybe don’t always spend every single penny you own just because you can.
In fact, that money you saved will be pretty needed in the future, for instance, then you retire, or you need to pay your loans for house or education.
It always pays off to keep your money for a rainy day, rather than spend everything on fashionable outfits which won’t be necessary the next season. On the other hand, if something just has to be bought, you can start using a few money-saving tricks as well.
For instance, if you can’t live without the newest Ralph Lauren’s collection, then look for some Ralph Lauren coupons, and try to save at least a little bit.
Rule 2) Money can’t buy happiness
The law is as old as the world, but is it entirely correct? The rule tells the truth then it comes to the knowledge that you have money, and that directly helps you to avoid stress and anxiety that often occurs when a person is unable to meet its basic needs just because of lack of money.
You will feel much freer, calmer and certainly happier when you do not have to save the last slice of bread and count every penny.
According to Princeton University studies, people with an annual income of 75 thousand dollars were feeling happier than those who had less income. Of course, this did not confirm the rule “the richer, the happier.”
People with an annual income of more than 75 thousand dollars did not feel happier than those who have less money. So here, we should remember one thing – money isn’t everything, and sometimes the more money you have, the more problems you have!
Rule 3) It’s not worth saving money because you won’t be able to take that with you in afterlife
The right idea?
As it turns out – not quite. In everyday life, this idea can actually be dangerous! First, you cannot know when your last hour will come, and you need money now to pay your bills and cover the loans.
Second, if you follow this idea, you will spend money on various unnecessary things just because life is short, and tomorrow might not come.
Such behavior will sooner or later lead to financial problems and impose a debt burden.
Also, note that in some cases, your spouse or another family member will have to take
responsibility for your loans and pay them after your time on Earth is over.
So, maybe forget this ancient rule and better think of people who you are going to leave behind – you don’t want to make more problems, do you?
Rule 4) Never borrow money and never ask for money yourself
Great idea. But not nowadays.
This rule maybe made sense 500 years ago, but in realities of the present day, we have to borrow money to buy an apartment or a car, to have a healthy, functional life!
In fact, Harvard University studies have shown that people can achieve a lot more in their lives if they have some property of their own, rather than people who don’t, even if their incomes are the same.
If you are more experienced with money, you can even take part in investment and gradually improve your financial well-being. Rich people know that money makes money, so in some cases, borrowing can be that one option to increase your life’s quality.
Rule 5) Do not borrow money from Peter to return money to John
Of course, this is a good idea. But it is not always practicable.
Nowadays, this rule can be applied for loans from the bank and not from individuals. This means if you borrowed money from one bank, do not borrow money from the second bank to return to the first.
Such behavior can help you only if the second bank gives you a loan with a lower interest rate than the first.
For example, you can save if the first bank loan is 8 percent per annum while the second – with 3 percent. But keep in mind that you can lose a lot of money by doing inter-bank transfers and get in more trouble than you had!