Build the right budget

The most valuable part of budgeting is actually the process of building a budget correctly.

You build a budget based on looking at your actual spending over the previous few months. Get real numbers, not estimates. Dig through your bank statements and credit card statements and figure it out. This will easily show you the areas where you actually overspend.

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How much 1 hour of your time costs

Figure out how much you earned last year after taxes.
Subtract from that all of the costs of commuting, professional clothes, work-related meals, and other expenses you paid out of pocket.
Figure out how many hours you worked, plus the hours you commuted ...

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The 10-second rule

Whenever you’re tempted to splurge on something cheap, simply hold it in your hand for 10 seconds and ask yourself honestly whether you need it or not. Actively try to think of reasons why you shouldn’t buy this item. Will you really get enough value out of it to make it worth the co...

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The 30-day rule

For more expensive items simply choose to wait 30 days after your first serious impulse before buying the expensive item, provided that it’s not an essential or emergency need.

Use that time to do a little research and make sure you actually want or will use the item, and also give i...

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Unused subscriptions

Cancel your unused memberships and subscriptions.

Unused subscriptions and memberships do nothing but devour your money month after month.

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Investing money in stocks

Money in stocks, over the long term, tend to offer very good returns, but stocks tend to be very volatile, with lots of short-term jumps and falls in value. Hold on and be patient.
Shoot for the average by buying index funds with low fees.
Don’t bother with i...

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Renting vs. home ownership

Rent unless your total monthly cost of home ownership is lower than renting.

It’s easy to get sold on the home ownership dream, but if it’s going to jack up your bills, it’s probably not a wise move.

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Keep everything as simple as possible

The more credit cards you have, the more chances you have for identity theft and the more chances you have to miss a payment. The more investment accounts you have, the less attention you can give to each one and the more likely it is that you’ll miss a big problem.

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Focus on...

Building an emergency fund: set up an automatic weekly or monthly transfer from your checking account to your savings, then leave the savings alone until an emergency appears.
Eliminating high-interest debt: Set up a simple debt repayment plan by organizing your debts b...

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Don’t ever let your “future self”...

...take care of your current situation.

Your future self might have more income, but it’s also fairly likely that your future self might have less income and you’ll find yourself in a really bad situation.

Even if your future self is doing well, there are probably going to be other b...

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