Read the first book to understand investment and financial management

Chapter 41 Spending money is a balanced art of living (1)
Live within your means and spend wisely
Living within our means is a kind of wisdom and a virtue.No matter how much money you have, if there is no end to squandering without limit, even if you are sitting on a golden mountain, you will become a pauper sooner or later.Living within your means does not mean that you reduce your quality of life, but spends money reasonably, only when it should be spent, and when it should not be spent, even a penny will not be wasted.Every time you spend, not only depends on the amount of money, but also whether it is worthwhile to spend, and also evaluates your own financial strength, don't slap your face and pretend to be a fat person, and be taken advantage of.

The famous "Auman financial concept" tells us that only by living within our means can we construct a stable economic structure, and we must measure our economic capabilities in advance when spending and spending to achieve a balance of income and expenditure.Don't be overwhelmed by some external stimuli and make unwise unnecessary expenditures.Take buying a hot property, for example, if you don't have enough emergency money on hand, then don't chase the "housing fever" trend, and make yourself for a vain, unbuilt house Running an economic deficit month after month is foolish.

To live within our means, we must first figure out how the money should be spent.As the saying goes, spend money wisely, no matter how much money is spent, it is composed of pennies.We cannot ignore the value of a penny because of its small face value, nor can we become a victim of being slaughtered because of a large face value of a hundred dollars.

The Kennedy family is a prominent family in politics, but this political success is based on strong economic conditions.They were still poor when they immigrated from Ireland to the United States, but after only a few generations of hard work, they became a well-known wealthy family in the United States.A very important aspect of their success is that they are good at financial management, no matter how much wealth they have, they must spend every penny well-founded.

It is said that Kennedy Sr. gave the children an average amount of allowance each week.Children can freely dominate in this range.If they want to buy the products they like, but they don't have enough money, they can't ask for it from home. Instead, they can only accumulate enough money through a few weeks of savings.In this way, Kennedy Sr. instilled in the children such an idea: to cherish every penny and learn to spend every penny.On weekends, Kennedy Sr. held a family meeting at which the children reported where they had spent their money.Children who spend freely and spend without planning will have their pocket money reduced for the next week, while those who spend money planned and even have a surplus will be rewarded financially.

The Kennedy family has set an example for us: No matter how much money you have, you should live within your means and not waste a penny. This is not only a manifestation of stinginess, but a manifestation of wisdom.

On the surface, living within one's means and the right to enjoy one's life may seem contradictory, but they are not.When we talk about living within our means, we are not talking about only earning and not spending, but setting the limit of expenditure according to the amount of income, so that life can be rich and colorful.You may feel that enjoying life and living within your means is impossible at the same time, but if you think so, you still don't understand how to spend money.Learning how to spend money is an important part of living within your means, and it is also the premise and guarantee for you to enjoy life.If you regard profligacy and waste as the enjoyment of life, then your future life may only be left with the pain of purgatory.

Therefore, living within your means is not only an important step in financial management, but also an important part of ensuring your happiness in life.We are all emotional consumers, and we all have times when our consumption gets out of control, but these accidents are just a small high note on your financial management song. As long as the basic tone of the whole music is within your means, then your financial management song will be It is a beautiful piece of music.

Learning how to spend money is the most important skill for a financial manager.Look at those successful people who can make money, but also those who can spend the most money.Living within one's means, careful planning, and no extravagance are the characteristics of a truly wise and rich person.

Making money is technology, spending money is art

Everyone knows that earning money is because it costs money, but when dealing with the same money, people with different realms of life will have very different approaches.Different ways of spending money reflect different understandings of life. Some people are drunk, some are muddling along, some are constantly creating, and some are savoring life.So it is said: "Making money is technology, spending money is art."

Making money is a skill, and spending money is an art. Those who can earn and spend are the most commendable, but it is not easy to achieve this.The traditional consumption habit of the Chinese people is to live within their means, and later evolved to save as much as possible, and some reasonable consumption was also omitted.In the context of the continuous invasion of Western consumption concepts, a group of young people have gone to another extreme, excessive consumption, and become "moonlight clan".In fact, neither excessive saving nor excessive consumption is a healthy consumption behavior, and both will have an adverse impact on family life.

One of the symptoms: spending money without a plan, becoming a paycheck to paycheck
Zhang Li is 26 years old, single, and an administrator of a foreign company with a monthly income of 30 yuan.In terms of expenses, Zhang Li is not a big spender: In order to reduce the rent pressure, she and her colleagues rented a house together; dinner usually is to eat foreign fast food with her own coupons; she rarely buys brand-name clothes, and basically changes them frequently Chang Xin's "big street goods"... Although so "thrifty", at the end of each month, Zhang Li's salary is still spent and there is no surplus.She always complains: "Where does all my money go?"

Chen Xiao is different.He is a marketing planner for a company with an average monthly income of 50 yuan.But although this big boy earns a lot of money, he spends more.Dare to play anything, dare to buy anything, and occasionally borrow money from "brothers" to get by. Almost every month is a "rich man" at the beginning of the month and a "loser" at the end of the month. I have worked for three years and still have a little savings nor.

Holding a generous salary, but playing the banner of being poor, the monthly salary is exhausted—Zhang Li and Chen Xiao both belong to the very "fashionable" "moonlight clan" nowadays.What we need to analyze is that these two people have different income levels and different spending habits. Why have they both fallen into the quagmire of the "moonlight clan"?
Chen Xiao's "Moonlight" is naturally derived from "dare to play anything, dare to buy anything", spending money too extravagantly and without restraint.What about Zhang Li?It turned out that although Zhang Li did not spend money "lavishly", she was very unorganized and planned.For example, she is called "shared renting", but renting a house is not necessarily cheaper than renting a house alone; she eats discounted foreign fast food, but is it cheaper than cooking at home?She does not pursue famous brands when buying clothes, but pursues "frequent replacement and new ones". How many pieces of "high-end goods" do she buy every month? Is the frequency too high?There are many, many mistakes in spending money like hers.

Therefore, both Chen Xiao and Zhang Li should reflect on their living habits, especially their consumption habits. If you don’t want to become a member of the mighty "Moonlight Clan", you may wish to improve from the following aspects.

prescription:

1. Live within your means and spend money in a planned way

As the saying goes, "money is the guts of a person". Without money or with little money, the desire to consume will naturally be small. With money in hand, the desire to consume will immediately expand. Therefore, it is best for the moonlight clan to control the desire to consume. Can record and "monitor" monthly income and expenditure to prevent unnecessary consumption.

You can also use the very practical "envelope" spending method, which is to budget all necessary expenses in advance. For example, you can only use the money in the "clothing" envelope when you buy clothes, and you can only use the money in the "eating out" envelope when you eat out. The money is earmarked for special use, and it is guaranteed not to exceed the budget, so there will be no moonlight.You can also set up a psychological defense line, requiring yourself to only use 80% to 90% of the special funds in each envelope. If you have a surplus at the end of the month, you will have a sense of accomplishment.

There is to resist the temptation of various promotions.Buy 1 get 50 free, [-]% discount, points VIP card and other more and more sensational temptations have caused many young people to suffer from "crazy buying syndrome".For the moonlight family, this seemingly preferential consumption must be restrained, and tell yourself that "want" and "need" are not the same thing.

2. Compulsory savings, gradual accumulation
After the salary is paid every month, 5%~20% should be deposited in the bank first, including savings or investment funds.In addition, many banks now offer flexible savings services. For example, they can be authorized to the bank. As long as the amount of the salary passbook reaches the agreed amount, the bank can automatically convert the excess part into a fixed deposit. This method of compulsory savings can make you Get rid of the habit of spending money indiscriminately, so as to continuously accumulate personal assets.

3. Do it yourself, have enough food and clothing

Just like Zhang Li, eating fast food and restaurants is a common problem for some singles, and their expenses sometimes account for more than one-third of their monthly income.It is recommended that single people learn the common sense of cooking. When they get off work, they can buy some vegetables or semi-finished foods that they like for processing. This not only achieves the purpose of saving money, but also practices their skills and enjoys the joy of life of "do it yourself, have enough food and clothing".

4. Use credit cards carefully to avoid excessive spending

The appearance of "swiping the card lightly, life is more chic" often conceals the fact of excessive consumption, especially for the money-spending paycheck-to-payers, credit cards should be used with caution.

Symptom [-]: Excessive savings, affecting quality of life
Unlike the young "Moonlight Clan", Wei Ping and his wife are typical "diligent and thrifty housekeepers". The 32-year-old Wei Ping and his wife are both ordinary wage earners, with a monthly income of 35 yuan and 30 yuan respectively.The two have a child who just turned one year old.Under the careful management of his wife, the total monthly living expenses of the family of three are basically maintained at around 25 yuan.The monthly balance is about 40 yuan, and the balance ratio is as high as more than 60%, all of which are deposited in the bank.

"We have a [-]-year-old mother and a one-year-old son, and our salary is not high, so we often dare not spend money." As a "sandwich family", Wei Ping and his wife consider the upbringing and education that their children will need in the long years to come. Expenses, the pension and medical expenses for the old mother, and the pension security for the husband and wife, so now we are "tightening our belts to live", and we can save as much as we can.In the year since the baby was born, in addition to buying clothes and toys for the baby, his wife has bought new clothes twice, and Wei Ping has not gone shopping for many years.

prescription:

For many ordinary working-class families, Wei Ping is quite representative.Their income is not high, and various tangible or intangible life pressures in the future force them to follow the life consumption principle of "taking thrift as the first essence".

Although their concerns are not unreasonable.But from the perspective of financial management, being too frugal and having a high savings rate is not necessarily a good thing.Because life must have a long-term vision and "live in the moment".When making good financial preparations for the future, take care of the quality of life in the present as well. The "Moonlight Clan" put too much emphasis on "timely gratification", while Wei Ping and the others were too worried about the burden of the future.Only by finding a balance between the current and future living arrangements is the ultimate realm of financial management.

For this reason, we suggest that individuals and families with high savings rate and low current living expenses should appropriately increase current consumption, effectively improve the current quality of life, and enhance the current life happiness of the whole family.

In addition, these households with high savings rates often do not know how to make money more effectively on the basis of savings.In other words, they currently only learn to "reduce expenditure" and do not know how to "open source".On the one hand, you can convert excess savings into other various investment tools, such as funds, government bonds, etc., to increase the speed of your own wealth accumulation, and you can also appropriately alleviate the current pressure of "throttling expenditure" and transfer some of the funds that you originally planned to save. Released for current consumption.On the other hand, you can use part of your savings for your own skills training, to “charge” yourself more, increase your competitiveness in the workplace in the future, and improve your future earning capacity.

Earning money reflects a person's ability to earn money and determines your material life; spending money reflects a person's art of using money and reflects your spiritual life.For modern people, it is not only necessary to learn how to make money, but also to be good at spending it. The two complement each other and jointly build your beautiful life.

Impulsive consumption is the enemy of life

They often have no money, often borrow money, earn less and spend more.When they have money, they dare to play and buy everything. When they have no money, they are poor and live a difficult life. They hold a good salary, but they pretend to be poor.Their slogan is "no distracting thoughts, enjoy the present", and advanced consumption is their persistent pursuit of life philosophy.This is the white-collar "new poor" that was once popular in the city.

For the general "new poor", financial experts offer you the following advice:

1. Have a clear understanding of personal property status, control debts rationally and be a "benefactor".

The monthly payment of a family's monthly repayment is best not to exceed 30% to 40% of the family's monthly income.Within this range, household finances are relatively secure.

2 Optimize portfolio liabilities.

In the case of debt, there must be overall consideration. In order to reduce interest expenses, you can use the product with the lowest interest rate as much as possible.Mr. Hu's family loans accounted for a relatively high proportion of income, especially in the past three years.Therefore, you can adjust the loan term and loan type in time, such as negotiating with the bank to extend the loan term and reduce the pressure.Then save the savings and pay off the renovation and car purchase loans first to save interest.

If you are a "new poor" who has been deeply poisoned, and the general money-saving tips can no longer save you, you must try the following first aid methods:

1 Formulate life goals
According to the process of life planning, understand your own life needs, formulate short-term, medium-term and long-term financial goals, and then formulate a financial plan based on this.Of course, you must first understand your own expenses, establish income and expenditure records, and prepare the necessary budgets, formulate appropriate financial goals, and improve financial management motivation.

When formulating a financial plan, it is necessary to consider the actual financial ability, and conduct regular reviews and flexible adjustments so that the financial plan will not become a burden on life.

2Start from accounting and find financial loopholes
Because only in this way can you go from being used to saving money to investing money, and then continue to accumulate assets.Of course, saving money is not enough, you have to learn how to keep accounts.

3 The formula for getting rich completely: Accumulate first and then consume

Many young friends think that as long as there is still a balance after deducting expenses from monthly income, it means that they have savings and money to manage.This erroneous concept must be completely reversed. Don't regret it when your income is exhausted and your credit card is maxed out because you can't restrain your desire to consume or become "numb" to expenditure figures.Getting into the habit of saving regularly is a fundamental principle of building wealth.

4 Forced savings
(End of this chapter)