Not a lot of people have a background in business or in personal finance. A lot of people today are ignorant when it comes to jargons and basically how to handle their own money. In most occasions, these are people who make bad decisions. They end up filing for bankruptcy. And also, these are the same people who are making bad financial decisions.

Now, the good news is that there is something that we can do about it. There are instances when you can actually improve your finances with the simplest steps and strategies.

List down your expenses

The very first thing that you have to do is to list down all your expenses. It means that you will have to write down the small ones and the big ones. This will help you realize, by the end of the week or the end of the month how much you are actually spending. In addition to this, it can also help you reassess your spending habits. Do you tend to spend on things such as food too much? Or are you the type who is spending more on sweets and snacks?

Invest half

Investing is a habit. You want to make sure that at least half of what you are earning automatically goes to investment. Next, you want to make sure that you save 10% of whatever it is that remains from the half. And the rest can be used for your expenses. This is a key ingredient if you want to retire early or if you want to live comfortably in the latter years of your life.

Now, a common question is where to invest your money? You will have to assess your situation. For instance, if you are going to retire in the next 30 years, then you can go for a bit of a risky investment. This means that go for long term investments such as stocks and mutual funds.

Live in a place with a lower cost of living

Cost of living is another important consideration that you will have to make. In fact, a good way to assess if you can afford to live in a city is by doing a lot of research. You have to keep in mind that the minimum wage is most likely not the amount of money that you want to make if you want to live comfortably in one particular area. You want to make at least three times the minimum wage.

Downsize your lifestyle

You also want to assess the home where you live. If you can downsize your lifestyle, then it becomes an ideal situation wherein you can save some money and just work. You will be surprised by the amount of money that you can save just by doing this.

The reality today is that you have to be very particular about your consumerist behavior. You will need to ensure that you don’t end up spending more than you should. In addition to this, you also have to worry about the different types of investment that you will make.

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