It is not your income that makes you rich
An important tip from the experts, as recorded on the Arbeits-Abc information portal, is an old wisdom with regard to financial matters: it is not your income that makes you rich, but what is left of it. If all the money is squandered at the end of the month, it does not matter whether your income is 500, 2,000 or 20,000 euros. At the end of the day, or rather at the end of the month, you start the new month “rich” again. But if you manage to save an amount of money of 100, 500 or maybe even 1,000 euros every month, that amount of money will gradually add up – you just have to give it the necessary time. Your savings grow month after month, and so does your financial security.
The effect of constant saving
However, the experts warn that there is never absolute security. It is also evident that low-wage earners have far less money to spare per month than those with higher incomes. Far from every household can put aside 500 or even 1,000 euros every month, that is completely clear. But if you put 200 euros in your savings account every month, you could theoretically look forward to an amount of 12,000 euros in your account after five years. That is, admittedly, greatly simplified, but it demonstrates the dimension of the power a continuous, constant savings rate can have over a certain period of time. As inconspicuous as the amount may seem.
The family accounting department
In the first step, it can be helpful to identify the exact amount of money that can be put aside each month. To do this, you should get to know the total income and expenses, for example by listing the two items against each other. This means that you compare all the income you receive every month with all the expenses you make. Whether rent, cell phone insurance, monthly car insurance, Spotify or groceries – every single cent that is spent should be found here. Accordingly, you should first create an awareness of how much and what you spend money on each month.
Corporate strategy: Where does the company want to be in X years?
An essential part of a company is a concrete objective with a realistic formulation of where the company would like to be after a certain period of time. The same can be applied to the family household. How high should the family benefit be in five, ten or 15 years, which costs should the family benefit always be able to cover. It is important that the goals can be achieved after comparing income and expenses and the monthly savings rate determined.
The controlling department – or: the budget book
The family household should always be kept in view so that the ratio of income to expenditure does not get out of control and in order to continuously control the amount of expenditure. The keeping of a household book can be suitable for this. It doesn’t matter whether an app, a book, a pad / folder or an Excel list is used for this, because the main thing is that you can handle it.
The expenses incurred on that day are recorded daily in the budget book. The aim is to check whether the expenditure actually corresponds to the actual budget and whether everything is going according to plan and towards the set goal.
As in the example calculated at the beginning, even small amounts can develop into several thousand, even tens of thousands of euros over a longer period of time. It may therefore be advisable to run the family household in the form of a business early on and start saving.
Philipp Beißwanger / Finanzen.net editorial team
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