When it comes to money, we simply don’t know enough. We’ve heard so many things about personal finance– save often, invest early, spend wisely, budget weekly. We could go on and on…
But sometimes, it’s either we don’t have the best money information, or we don’t know the best way to apply these rules so that they actually relate to us.
We’ve compiled five more money truths (plus all the ones you know) to help you navigate your financial life more readily.
- Advertisements work: We know you’ve been told to save your money and all. But how do you do that when it seems every new product or service is too enticing to resist. These companies just seem to have the perfect solution to all your present problems.
This is just because they’ve done their research and if they’re good enough, they get to compel you to spend your money impulsively, with tricks that actually work.
Social media, celebrities, adverts… They regularly research your needs (and wants) and strategically position and offer products and services you ‘need’ at the perfect time.
So try to assess the things you spend money on. Was I just convinced to spend on something I can’t afford or don’t even need? Then trace your thought process and think logically next time you see that compelling advert online.
- There’s a difference between saving and investing: You’d actually think everyone knows this, but no. Because some people really think keeping money in the bank for a while will multiply their funds and create wealth for them.
Saving is when you’re keeping money safe for a few years or less (say one to five), while investing is for longer periods (at least 5-10 years), usually with a good knowledge and strategy in the target industry.
The truth is— to properly invest money towards building wealth or making ‘passive’ income, you need a lot of knowledge and dedication to understand the market over a period of time.
‘Get-rich-quick’ schemes are not a solid investment strategy either. They’ll quickly end up in a loss and you’ll miss the opportunity to either enjoy your money or even put it in some viable stocks or business.
- Mindless spending adds up eventually: Send 200₽ here, pay 500₽ there. And that’s how at the end of the month, you have nothing left.
The truth is that eliminating small daily spendings will help you save up more money over time, and subsequently grow your funds towards tangible investment opportunities in the future.
Try it: record how much you spend on these ‘little’ expenditures for a typical week— coffee, spontaneous snacking, eating out, taxis. Add it all up and see if you can intentionally avoid some of these to save up for another week.
Then decide for yourself. Which ones can you delete permanently? Which ones can you intentionally cut down?
- Spend money now to save in the future: Yes, but it’s not exactly what you think. You are actually not being prudent by spending less to buy low-quality stuff that won’t last.
The truth is that if you invest more money to buy something of a better quality, it’ll eventually last long and you won’t have to replace it as quickly, or as often.
Buy things with value. Don’t get used to buying low quality products just because they’re cheap. Rather, save up for premium products that are tested and trusted.
- Your friends determine your spending: Chances are you spend a lot of time with your closest friends and their habits and lifestyles will consistently influence your spending.
If they are the type to spend time at parties and extravagant weekend outings, you’ll most probably follow them and create a big dent in your account over time.
If they are, however, dedicated to earning more by starting a business, doing some extra work etc., you’ll find out that your interests will go more in that direction.
These are only some of the key financial facts you need to know.
But if you still have questions, message us privately on WhatsApp to get some actual advice or join our Telegram channel for the latest updates and opportunities for foreigners living in Russia.
