In The Financial Diet book summary, we’ll look at how you can improve your relationship with your money. This book tells us how you can create a budget for yourself, get rid of your debt and secure your future through your financial planning.
A guide to becoming better with money.
In today’s time many people believe that money is not necessary. Money may not be the most important thing in your life, but it affects everything that is important. With money you can improve your life, improve your relationships, improve your health and all these three things are important to you.
But still many people do not do financial planning. This book tells us how you can easily manage your money and how to invest it at the right place and save yourself from the troubles of the times to come. This book tells us what are the benefits of investing money early.
What should you do for a better future?
How can you make your budget?
What are the benefits of investing money at a young age?
Four things you should never do to maintain your finances.
Before we know that what you should do to make yourself financially strong, first of all let us see what you should not do. You should never do these four things.
First of all, don’t ever use your credit card if you can’t pay it off in a month. Using a credit card has its benefits, but the day you start using it more, you will start getting into debt.
After this, never spend too much money, spend as much as you can. We end up buying a lot of things that we don’t need. It is not necessary that you eat in a five star hotel every day, so spend money only as much as your budget is.
Third, never forget to check your bank balance. Just as a careless person does not see how many calories he is consuming before eating, in the same way a careless person does not check his account. You should check your account at least twice a week to see how much money is coming into your account and how much money is going out.
Fourth, don’t think that you are young now and will start saving later. Many people feel that retirement is too far away, so they don’t save. Later when they realize their mistake, it is too late.
Try creating a budget to see where you are spending your money.
Many people don’t like budgeting because they want to be independent. They want to sleep, get up and live according to their own accord, and thus find it very difficult to restrict themselves. But this difficult task can save you from future troubles.
You can use apps like Mint to create a budget, but a simple spreadsheet will do well. First of all, write how much money is coming to you, now it is coming from wherever. After this, write where your money is being spent. In this expenditure, write down every small thing in which your money is being spent, whether it is a cold drink of 10 rupees or toffee of 2 rupees. After this, write at the end how much money you saved and deposited it in the retirement fund.
When you’ve done that, start looking at how much money you’re spending on waste. Can you save some money by not drinking the cold drinks you’re drinking every day? Is it really necessary to go to that restaurant and eat food? In this way if you save 20 rupees everyday, how much will you save in a year? And how much money will you save doing this for 20 years?
This way you can decide where you can save your money. Apart from this, you can balance your budget and your expenses by using the 50/30/20 plan. According to this plan, 50% of your income should go towards your essential expenses, such as food, living and ration. 30% of the income should be spent on other things like going for a walk or staying with friends. And 20% should be your savings.
It is not necessary that like everyone else, you should spend 50% of your income on your daily expenses. Maybe only 40% of your monthly expenses go in, and you see your other expenses in only 25% of your income in a month. With the help of this system, you can see how much money is coming to you and accordingly how much money you are spending and saving.
Save your money and invest it.
Many people when they are young make the mistake of thinking that they have a long life to live and they do not think of saving money and investing. But being young is a very beneficial thing and at this time you can save money and invest it, so that your money will be invested for a long time and you will get more benefit from it.
If you want to understand how investing money first can be profitable for you, then you have to understand the rule of 72. According to this rule, if you want to know in how much time your money will double, then you divide the interest on it by 72.
If you want to buy a 5000 suit for example and you can’t decide whether you should buy it or not, just think about it. If you invest that 5000 and you get 7% interest on it then (72/7=10.28) in about 10 years it will be equal to 10,000, in 20 years it will be equal to 20,000 and in 30 years it will be equal to 40,000 and equal to 80,000 in 40 years. If you invested that 5,000 at the age of 25, then by the age of 65 it would be 80,000 back to you.
So do not think that you will start investing from tomorrow, because the longer you delay in this work, the less benefit you will get from it.
Always keep some money for yourself for tough times and pay off your debt as quickly as possible.
It is not necessary that investing is very difficult or that you have to spend all day with your phone to do it. But before you can make some investments, you should know a few things.
First of all, save some money for yourself. That money should be enough to cover your expenses for three months. Maybe you need money all of a sudden or you get sick. After this, think about eliminating your debt as soon as possible. If you are getting 6% interest on the money you have saved and paying 7% interest on your loan, then it is a loss and you should pay off your loan as soon as possible.
Once you’ve done these things, you should save money for your retirement by investing in a 401(k). Your employer will match your contribution so that you will get some money for free. If you have already invested in it, then you should invest in IRA i.e. Individual Retirement Account as this will help you save your taxes.
After this, you can invest your money in index funds, in which you do not need to do much work. You just have to give your money to the Asset Management Company and they will invest it at different places according to you and return your money with profit.
In this way, by first saving money for yourself, then investing it in different places, you can invest a lot of your money and there will come a time when you will not have to worry too much.
To be successful, get to know the right people and improve your career.
It is not enough just to work, save money and invest for a better future. You have to build relationships with the right people and move forward with their help. The writer’s first mentor was Joanne Cleaver, a journalist and an entrepreneur. He told the writer about the benefits of building a network. He told that the easiest way to build a network is to work for someone for free. It can be a little tricky, but it’s a great way to get closer to someone.
When Cleaver was working for a newspaper, she wrote a very funny story on the front page of the newspaper about how the situation in her city was getting worse and how things could improve by giving donations. Is. As a result, the newsroom gave a lot of money to donations and was invited by the president.
But no matter how good a networker you are, if you don’t get what you want from your network, you’ll never be successful.
It is important that you ask for what you deserve when it comes to salary. In today’s time, you can know that what is the minimum salary you should get for your job. You can use Payscale or Glassdoor to find out how much money you can earn based on the amount of experience and skills you have.
Asking for your salary may sound intimidating, but it’s a must. Also, when you bargain for your salary, it shows that you have self-confidence. Not only do you do good for yourself, but you also create a good image of yourself in front of others.
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