Golden rules

The 10 Commandments of Personal Finance Management

1. Determine what you really need to have, what you want to have and what you wish to have one time.
2. Keep track of your spendings for a month. And I mean: each and everything. Right it down each day or compose an excel-sheet to see where your money is really going. You will find out, at least 10%, more likely above 20%, were unnecessary spendings. You’ve could have saved this money to reach a financial goal or to fund a reserve for an emergency.

3. You can avoid these unnecessary spendings by composing a accurate budget based on spendings ‘you really need’ for the next month. Stick to it. With a plan, it’s much easier to succeed.

4. Keep your card at home. Leave the house with the really necessary cash only, you get no temptation to overspend in shops or empty your account on a bancomat.

5. Perform a regular and honest check: Do I balance my bank account each and every month? Do I know – and stick to – my monthly high and low budgets? Can I save at least 10% of my income each and every month?

6. Getting into debt is very easy, getting out is very hard. If you see no other choice, compare the conditions carefully and always prefer a higher rata for a shorter period over a lower rata for a longer period.

7. Instead of applying for a credit for your summer holidays for instance, budget and save a fix amount of money in each of the other 11 month. And stick to it – if you have a plan, it’s more likely to succeed

7a. For smokers only. Quit. I’m not telling you that as a your doctor, but as a financial adviser. Stop smoking your package a day, would save you over 1200 EUR per year – most likely enough for financially carefree holidays.

8. Don’t underestimate the effects  of a positive change in your personal cash management. Even a small success opens the door for further opportunities. You just made the first step, use to positive mood for the next.

9. When your debt-free, the world is yours. Invest the money you saved by following these points into a your personal education for instance. Make yourself more valuable for employers.

10. Negotiate a pay rise to achieve your financial goals sooner than expected. Celebrate your rise, but then it’s back to point 1 to 9 to achieve even more or start to invest your money profitable.