Get Good With Money
Tiffany herself has gone through a financial crisis. Tiffany's dad always tells her that "slow and steady wins the race". But Tiffany said that she never liked this concept, she wanted to become rich quickly.
Soon she met with a coach named Jake. Jake told her to buy a credit card from which they will take a loan and use OPM(Other People Money) to become rich. Tiffany liked Jake's plan very much, therefore, she took a Rs 75000 loan and gave it to Jake and after some time again she took a Rs 50000 loan for a course on business building.
After some time Jake ran away with the money and the course did not provide the value of Rs 50000.
Now Tiffany was in a debt of credit cards, home loans, and student loans. Now she remembers her dad's saying "slow and steady wins the race". Therefore she understood the basics of money, read a lot of books, and became financially whole in 10 years. She noticed that there is a difference between becoming financially free and financially whole and there are 10 steps to becoming financially whole.
Here are 10 steps to become financially whole.
1. Budget Budgeting
This is the easiest step and after completing this step many people say that they are wasting their money on useless things and their savings are zero.
Tiffany said that we need to celebrate after completing this step because the maximum number of people don't know about their financial condition.
In this step, we have to follow 3 steps
- Money in list - How much we are earning.
- Money out list - How much money we are spending.
- Saving - Save all the money which is being wasted in the money out list.
Automate this process i.e. money is automatically deducted from the bank account at the beginning of the month.
2. Save Like A Squirrel
We all know that we can save money, maximum people think that they have to save money so that they can spend it later. But Tiffany says that we should not save money so that we can spend it later. We have to save money so that it can give us more money in the future.
We have to save money like a squirrel that collects food for the winter and it can be easily achieved by automation.
The more difficult it is for us to withdraw that money, the longer our money will be saved. Therefore FD or RD is a better option than a normal savings account.
3. Dig Out Of Debt
Do you know what is the business model of any bank i.e. how it earns money?
Bank takes money from us on which it gives a low rate of interest let's suppose 6%.
And the bank gives that money to everyone else on loan with a high rate of interest let's suppose 11%.
Now 11% - 6% = 5%
This 5% Is Bank's earnings and it is compounded.
That is, if you miss even 1 due date in giving a bank loan, then next time interest will be charged on our interest which can make us poor.
Therefore getting out of debt should be our priority.
We can't win against our willpower therefore we have to automate this process also.
4. Score High (Credit)
When Tiffany met a guy she was about to marry, she asked the guy what's your credit score?
For those of us who do not know, every country has a credit score that tells how our financial situation is. You can imagine it as exam marks.
In India, we measure cibil score which is in a range between 300-900.
- 300-550 (Poor)
- 550-650 (Average)
- 650-750 (Good)
- 750-900 (Excellent)
It doesn't mean that we take a loan. But if we know our cibil score then we will continue to get feedback. There are many advantages of a high cibil score.
5. Learn To Earn (Increase Your Income)
Tiffany had a friend Sandy, a human resource manager. She had a side business of selling T-shirts. She started this business with an investment of Rs 20000 and placed the t-shirt on amazon and earned Rs 5000000. Not only this she has become a small business strategist helping other in growing their business and earns a good amount from this.
In short, these side hustles can make us financially whole quickly.
To Read Next 5 Steps "Click Here".
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