In the world of personal finances, certain principles go unnoticed by most people, although They have the potential to radically transform our financial health. Experts in the field shared rules that they themselves apply and suggested strategies for both daily savings and long-term financial success.
Andrea Worocha renowned budgeting and consumer finance expert, criticizes the excessive budget rigidity. He explains that an approach that is too restrictive can be counterproductive. “While a detailed budget keeps you on track to meet your financial goals, one that is too restrictive will actually quickly backfire due to burnout.” Instead of changing all your spending habits immediately, he suggests make minor and gradual adjustments to facilitate the transition to more disciplined financial management.
He also gave an example and said that if attending a dinner with a friend or partner represents something of a priority, it must be included in financial planning.
The expert expressed a counterintuitive truth: “A low price for a poor quality product is actually a terrible deal because you will end up spending more, in the long run, to replace cheap items that break easily.” This perspective encourages consumers to invest in qualitysuggesting that such an approach, despite involving a higher initial cost, leads to significant savings by minimizing the need for frequent replacements.
Woroch seeks to economize on high quality products by opting for acquire prestige second-hand brands. For high-value goods, it suggests taking advantage of in-store promotions and purchasing seasonal products at the end of the season. He also recommended signing up for free rewards programs and exploring discounts on the web before making purchases.
Anne Lesterauthor of the book “Your Best Financial Life”, warned about the ease with which money can be spent in today’s society, especially through automatic payments and impulsive online purchases. Lester emphasized the need for conscious decision making. He recommended techniques such as creating detailed shopping lists and assign specific times for online purchasesto avoid unnecessary expenses.
He also said that when reading the list you have to ask yourself: Is this really necessary? Is there a specific occasion when I plan to use this? The very act of making the list will provide a moment to consider whether the purchase is worth it.
“You should automate everything you can about saving so you don’t have to make a conscious decision about it,” Lester recommends. Michael Finkeprofessor of wealth management American College of Financial Servicesechoes this sentiment and suggested cSet up automatic transfers to a high-yield savings account. Such an approach eliminates the temptation to spend money before it is saved and makes it easier to build an emergency fund.
Sara Rathnerof NerdWalletinsisted with pay attention to even minor charges on card statements of credit. He noted that these can be indicative of fraud. “Not all fraudulent charges are four-figure purchases,” she said. He also highlighted the importance of a meticulous review to prevent major financial losses.
Elaine KingAmerican certified financial planner, advised have a main investment account and another for short and medium-term projects. “By separating investment accounts, our goal is to match the portfolio allocation to your specific goals and time horizon, ultimately saving you time and money,” he explained. This strategy allows for better adaptation to individual financial objectives and more efficient management of available resources.
Finally, Kara Stevensfounder of the website The Frugal Feminist, emphasized the personalization of financial management. “Personal finances are personal and seasonal and should be based on values and life circumstances,” he said. He further said that understanding that there is no one-size-fits-all approach is essential to developing a system that fits individual needs and goals.
Before developing an economic plan, Patrick Yonofounder and CEO of Sure Life Financialhe advised determine personal priorities: What would the ideal home be like for you? What would be the optimal balance between your personal and professional life? What passions do you want to pursue? He said that by being clear about the desired objective, it will be possible to identify the ways to obtain the necessary income, the investments to consider, among other aspects.
