Hacking Personal Finance: What You Need To Know

Investing, Personal Finance, Real Estate, Retirement
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Hacking personal finance is crucial if one is to survive whatever life throws at them at a time when the global economy appears to be in turmoil. Successful financial planning is all about figuring goals first and then determining the necessary steps needed to achieve them. Likewise, Money Hacks by Lisa Rowan and Psychology of Money by Morgan Housel are must-read books for anyone looking to master financial objectives and avoid sabotaging themselves financially.

Behavior Change

In his book, Mr. Housel maintains it is important to think long term when it comes to finances and strive to keep investing expenses at a minimum. In the book, it is clear that doing well with money has little to do with how smart one is and much with how one behaves.

Housel advocates for behavior change when it comes to using money. In this case, people should strive to use and manage money in such a way that allows them to catch sleep at night. In addition, money should be treated as a tool that allows one to gain control over time to enjoy financial security benefits over time.

Saving for things that are hard to predict determines a great deal the level of financial success one is going to enjoy in the future. Ordinary as it may seem, it is important to save for unforeseen events. Through saving, one can avoid making financial decisions they are likely to regret.

For financial prosperity and security, it is important to refrain from showing people how smart you are or trying to impress people with your wealth. Likewise, never try to show or prove to people how quickly you can make money.

Money Management

Ms. Rowan, in his book, presents a series of hacks that make learning about money easier and intriguing. For instance, she advocates against trying to track every penny spent as a way of keeping personal finance in check.

Instead, she advocates dividing money into three buckets, one for essentials such as housing costs, and for accounting for 50% of the total income. In return, 20% should go towards savings of all types and the rest placed in the everything else bucket.

When it comes to saving for short-term goals, using a certificate of deposits would be the best way to go about it. Such investments not only protect against a drop in the value of a pool money but also pay the penalty whenever liquidated. In this case, C.Ds is perfect investment tools that eliminate the risk of dipping hands into funds set aside for a given purpose.

Avoiding financial temptation is also important if people are to keep their finances in check. The idea is to un-follow any favorite brands that are likely to force one to spend haphazardly. This can be achieved by simply unsubscribing from email lists and following any brands that often come with exciting online offers.


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