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9 Golden financial rules for each day
9 important financial rules How much should cost your house? And your car? And how many actually need to save for the future?
There are rules about the money that help to bring the finances in order. Everyone has their own situation, but these rules can serve as a good starting point.
1.The personal budget. The 50/30/20 rule Is a great rule for budgeting: 50% on Essentials — housing, bills, etc 20% on financial goals, pay down debt or replenish savings. Finally, 30% on current desires, for example, Lunches in restaurants or entertainment. There are other variations to this rule, for example, the 80-20 rule: you spend 20% on financial goals, and 80% on everything else. It helps to balance the commitments, goals and extravagance.
When it doesn't work: When you find it difficult to separate needs from wants. If you live in a city where everything is cheap, 50% housing and communal — it's too much. But if you earn enough, you probably can not afford such a luxury — to spend only half of income on the Essentials.2.The purchase of the machine. The 20/4/10 rule when Buying a car on credit, you need to make the first payment of at least 20%, to repay the loan no longer than 4 years and spend no more than 10% of their total income on transport costs. This rule helps to avoid buying a vehicle that you really can't afford. Costs, incidentally, include not only mortgage payments, but petrol and insurance.
When it doesn't work: In some situation, these figures can be unrealistic. For example, you have low-paid jobs, and to reach it is long and uncomfortable — then your transport costs can be higher than 10%. And if you have spare money, then perhaps it is more profitable to pay the entire cost of the machine.
3.The 10 year ruleIs for the choice between new and used car. If you want to extract from the car the maximum benefit, it is necessary or to buy used, or buy a new one and use it for 10 years. This minimizes your costs for depreciation, that the value of used cars has been subtracted.
When it doesn't work: Some people prefer to use the machine while it is still on the go, whether it is new or used. In addition, some machines can withstand more than ten years, and after six and become a headache. Consider the maintenance cost.
4.The purchase of housing. 20 percent Buying a house on credit, you must make a down payment of at least 20%. This allows not to buy a house or an apartment you can't afford,and reduces monthly payments and increases the chances of the loan.
When it doesn't work: This is a pretty traditional advice, but some people think that is too much to save. Others believe that although the house is an asset, you should not lose more liquid savings.
5. Rule 3 yearsdon't buy housing that costs more than three of your annual income. According to some versions — no more than two, according to some — no more than two and a half. This, again, helps us to understand how much house you can afford.
When it's not working: Perhaps you have unstable income. This rule also does not take into account how much money you have accumulated in case of problems. In some cases, should focus not on income but on the amount of your savings.
6. Pension. The 10% Is probably the most traditional rule: delay 10% for future retirement.
When it doesn't work: the Rule is simple, but it does not take into account how much you really will need in retirement and how much you already did. If you don't have savings or you want to retire early, you will probably have to postpone much more.
7. 20 yearsAnd one rule of thumb about retirement:your savings should be 20 of your annual income.
When it doesn't work: Your costs in retirement may differ from the current depending on the lifestyle you prefer.
8. Savings and investments. The rule is 6 months you Need to have savings for 6 months in case of an emergency. This will help not to take in such a situation, desperate decisions that will throw you back.
When it doesn't work. There are many different opinions, what should be the reserve Fund. Some believe that in 3-6 months, others that there are cases where such savings are not needed. Also, it is believed that if you keep much money on Deposit, you are missing opportunities to make money. Consider your total income, the possible risks, the monthly costs and the amount for which they could be reduced.
9. The rule of ageUsually, bonds are considered conservative investment, and stocks — more risky. So experts believe that the older you are, the less you should invest in stocks. To determine the percentage of stocks in your portfolio, there is a rule:subtract your age from 120.
When it doesn't work: This rule does not take into account the situation of very low dividend rates, as well as cases when you want to retire sooner or later. published
P. S. And remember, just changing your mind — together we change the world! ©
Source: ideanomics.ru/articles/3130
There are rules about the money that help to bring the finances in order. Everyone has their own situation, but these rules can serve as a good starting point.
1.The personal budget. The 50/30/20 rule Is a great rule for budgeting: 50% on Essentials — housing, bills, etc 20% on financial goals, pay down debt or replenish savings. Finally, 30% on current desires, for example, Lunches in restaurants or entertainment. There are other variations to this rule, for example, the 80-20 rule: you spend 20% on financial goals, and 80% on everything else. It helps to balance the commitments, goals and extravagance.
When it doesn't work: When you find it difficult to separate needs from wants. If you live in a city where everything is cheap, 50% housing and communal — it's too much. But if you earn enough, you probably can not afford such a luxury — to spend only half of income on the Essentials.2.The purchase of the machine. The 20/4/10 rule when Buying a car on credit, you need to make the first payment of at least 20%, to repay the loan no longer than 4 years and spend no more than 10% of their total income on transport costs. This rule helps to avoid buying a vehicle that you really can't afford. Costs, incidentally, include not only mortgage payments, but petrol and insurance.
When it doesn't work: In some situation, these figures can be unrealistic. For example, you have low-paid jobs, and to reach it is long and uncomfortable — then your transport costs can be higher than 10%. And if you have spare money, then perhaps it is more profitable to pay the entire cost of the machine.
3.The 10 year ruleIs for the choice between new and used car. If you want to extract from the car the maximum benefit, it is necessary or to buy used, or buy a new one and use it for 10 years. This minimizes your costs for depreciation, that the value of used cars has been subtracted.
When it doesn't work: Some people prefer to use the machine while it is still on the go, whether it is new or used. In addition, some machines can withstand more than ten years, and after six and become a headache. Consider the maintenance cost.
4.The purchase of housing. 20 percent Buying a house on credit, you must make a down payment of at least 20%. This allows not to buy a house or an apartment you can't afford,and reduces monthly payments and increases the chances of the loan.
When it doesn't work: This is a pretty traditional advice, but some people think that is too much to save. Others believe that although the house is an asset, you should not lose more liquid savings.
5. Rule 3 yearsdon't buy housing that costs more than three of your annual income. According to some versions — no more than two, according to some — no more than two and a half. This, again, helps us to understand how much house you can afford.
When it's not working: Perhaps you have unstable income. This rule also does not take into account how much money you have accumulated in case of problems. In some cases, should focus not on income but on the amount of your savings.
6. Pension. The 10% Is probably the most traditional rule: delay 10% for future retirement.
When it doesn't work: the Rule is simple, but it does not take into account how much you really will need in retirement and how much you already did. If you don't have savings or you want to retire early, you will probably have to postpone much more.
7. 20 yearsAnd one rule of thumb about retirement:your savings should be 20 of your annual income.
When it doesn't work: Your costs in retirement may differ from the current depending on the lifestyle you prefer.
8. Savings and investments. The rule is 6 months you Need to have savings for 6 months in case of an emergency. This will help not to take in such a situation, desperate decisions that will throw you back.
When it doesn't work. There are many different opinions, what should be the reserve Fund. Some believe that in 3-6 months, others that there are cases where such savings are not needed. Also, it is believed that if you keep much money on Deposit, you are missing opportunities to make money. Consider your total income, the possible risks, the monthly costs and the amount for which they could be reduced.
9. The rule of ageUsually, bonds are considered conservative investment, and stocks — more risky. So experts believe that the older you are, the less you should invest in stocks. To determine the percentage of stocks in your portfolio, there is a rule:subtract your age from 120.
When it doesn't work: This rule does not take into account the situation of very low dividend rates, as well as cases when you want to retire sooner or later. published
P. S. And remember, just changing your mind — together we change the world! ©
Source: ideanomics.ru/articles/3130
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