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Just Keep Buying: Proven ways to save money

Just Keep Buying (2022) is a straightforward guide to personal finance that revels in debunking myths and eliminating old cliches. It explores the psychology of money and offers practical advice on saving and investing.

About the Arthor

Nick-Maggiulli

Nick Maggiulli is the chief operations officer and data scientist of Ritholtz Wealth Management. He is also the author of Dollars and Data, a popular blog that takes a data-driven approach to personal finance. Maggiulli has written on money for the Wall Street Journal, the Los Angeles Times, and CNBC.

Money will disappear if you don’t use it wisely

My grandfather was addicted to horse racing.Despite earning $2,200 monthly with minimal expenses, he never invested a dime.. Had he invested, he would have been a millionaire. Instead, he gambled it all away and died with zero assets at the end of his 26 years of retirement.

 It is effortless for money to evaporate. One night out with friends can quickly drain your funds. However, focusing on saving and investing can transform your attitude toward money for the better..

 Most people avoid investing because they don’t understand where to start. Small steps and deliberate decisions, on the other hand, may be all that is required.

 The subject of savings comes first. After all, you cannot invest what you don’t have. But the amount you save will differ from the amount another person may choose to invest; we all have different financial capabilities.While enjoying the comfort of a regular salary is important, it’s equally crucial to save a good portion for your future.

But how much? The way to figure out where your focus should be is to think about how much you think you can save over the coming 12 months; this is your expected savings. Then, think about how much your investment should grow in the same amount of time; this is your expected investment growth. Which is higher?

Understanding where to place your focus is the first step toward a brighter financial future. After all, that’s what we all want, isn’t it?

If your expected savings are higher, you need to save more cash before you start investing. If you’re aiming for higher investment growth, focus on diversification. This summary is perfect for those struggling with savings and investments, helping you answer common financial questions and build confidence for a better financial future.

Savings Don’t Have to Be Traumatic

Most people want to save but never get around to it. While it may not be the most glamorous subject, it’s one you should address. Saving part of your salary each month means less spending now, but it greatly improves the quality of your future. Your future self will thank you!

The Misconception About Saving

A common myth is that you need to save a large chunk every month. The truth is, you don’t need to save as much as you think. There’s no universal amount that applies to everyone. Your financial situation varies, and responsibilities differ month to month.

Flexibility in Saving

For years, we’ve been told to save 20% of our salary, but that doesn’t always work. You might struggle with cash in January and find yourself with more in August. It’s okay to save more in good months and less in tougher ones. The key is to save something rather than nothing.

Finding Balance

While saving, you should maintain a decent quality of life. You shouldn’t be miserable at home, rejecting every social invitation to save more. The goal is balance. If you can save a little each month, you’ll feel less stressed and see your savings grow. This way, you won’t constantly worry about meeting unrealistic goals.

Save What You Can, When You Can

A good rule of thumb: subtract savings from your income, and the remainder is what you can use. If you want to save more, consider finding ways to increase income, such as offering a skill or service or selling unused items.ings from home, studying something that will bring additional income, looking for a promotion at work, or taking advantage of available opportunities.

 Spending without guilt is entirely possible

 We all enjoy spending money. It is universal because it brings a brief period of enjoyment and happiness. Of course, we dislike spending money on bills and other frivolous matters, such as purchasing something nice for ourselves. That’s always fun. The good news is that there is a way you can spend money without having a large amount of guilt attached to it.

 If you choose to splurge, make sure it’s worthwhile and not something you will throw in a cupboard after a few weeks.

The author has developed what he calls the “2x rule.” When you want to buy something, big or small, you should invest the same amount of money in something that will bring a return in the future. Then you are not only getting what you want, but you are also positively investing. There is no sin in that, and therefore no guilt.

 A second way to spend without having a mountain of guilt afterward is to make sure that you maximize the fulfillment you get out of whatever you are purchasing. however author points out that for fulfilment and happiness are two different things; you can easily be happy for a short amount of time when you buy something, but fulfilment is for longer lasting

Make sure that whatever you choose to spend is aligned with your life goals and reflects what you are trying to achieve in life. For instance, if you have a life goal to write a book, buying a new laptop will help you achieve that. In that case, you’re getting the most out of your film investment because it’s assisting you in achieving your life goals.

 Did you know? according to a 2017 survey by nerd wallet, 49% of Americans blame their emotion for spending more than they can actually Afford

Rethinking Debt and Financial Strategy

Debt can be a red flag if you rely on credit to make ends meet, but it’s not always a negative. In some cases, it can help secure a better financial future. However, it’s crucial to approach debt with caution and strategy.

Be Cautious with Credit Cards

Before signing a credit card agreement, always check the interest rates. Compare these rates to the current averages to avoid getting stuck with excessive fees.

Financial Hedging: A Strategy to Manage Debt

Some people opt not to pay off their credit card debt with their savings. This is called “financial hedging.” They keep the debt, knowing they can pay it off faster with lower interest, while preserving their savings for future security.

Using Debt to Reduce Risk

Debt, if managed wisely, can increase liquidity, smooth cash flow, or reduce uncertainty in the future. It’s important to understand how it works and use it strategically.

Mental Health and Debt

Debt can affect mental health. The pressure of owing money can be stressful, and it’s essential to take on debt by choice, not necessity. If debt feels overwhelming, seek financial advice for better strategies.

Paying Off Debt Smartly

Only paying the minimum on a credit card won’t help reduce the balance. Ensure you’re paying enough each month to make progress on your debt, so you can clear it and use credit wisely in the future.

The Big Question: To Buy or to Rent?

At some point, many of us face the dilemma of whether to buy a house or continue renting. While buying a home has become more challenging, it’s not impossible. However, renting long-term can feel like throwing money away, which makes homeownership a dream for many.

The Challenges of Buying a Home

Buying a house comes with various costs: a hefty down payment (3.5% to 20% of the house price), application fees, and ongoing maintenance costs. Saving for the deposit can take time, depending on the home’s price.

The Investment Potential of Buying

Owning a home can also be a valuable investment. You may be able to sell it for a profit later on. However, there are costs involved, such as repairs and maintenance, and the uncertainty of the housing market.

The Risks of Renting

Renting involves uncertainty—unexpected costs, rent hikes, and the potential need to move. While renting offers flexibility, it’s not without risks, especially over the long term.

Should You Buy?

Buying a home should only be considered if you meet these criteria:

  • Plan to stay in the area for at least 10 years.
  • Have a stable job and personal life.
  • Can comfortably afford the home.

If you can’t check all three boxes, renting remains the better option until your situation changes.

The World of Investment Does Not Have to Be Complicated

Investing doesn’t have to be overwhelming. While it requires research and careful planning, with the right advice, you can invest wisely and secure your financial future.

Why Is Investing Important?

Investing provides the money you need for retirement, ensuring you can enjoy a high quality of life in your later years. It also helps protect your wealth from inflation, making it a smart financial move.

Managing Investment Risk

If you’re worried about market volatility, consider lower-risk investments. Market crashes are rare, so with the right strategy, you can minimize risk and invest confidently.

Investment Options to Consider

There are many investment avenues beyond just stocks and bonds:

  • Stocks
  • Bonds
  • Property Investment
  • Real Estate Investment Trusts (REITs)
  • Small Businesses
  • Farmland
  • Franchising
  • Royalties and Personal Products
  • Cryptocurrency
  • Art

Stocks vs. Bonds

  • Stocks offer long-term growth but are volatile.
  • Bonds are safer, providing lower returns with more stability.

Start Investing Early

The key to building wealth is starting early. Delaying investments can lead to missed opportunities and higher costs in the future. Don’t let fear of large investments hold you back—start small and build your portfolio over time.f cash, but stick with a smaller investment if you have real concerns; that way, you still get some return without the stress and risk. 

Conclusion

Money is a leading cause of stress for many, mainly because it’s often misunderstood or mismanaged. However, savings and investments provide a solution for a financially secure future.

It’s easy to feel overwhelmed when researching how much to save each month. The good news is that money management is personal, and every situation is different. Even if you can only save a small amount this month, that’s a step in the right direction.

Don’t rush into complex investment plans right away. Focus on building savings first, then invest when you’re ready. Avoid overloading yourself with too much information to prevent burnout.

By following simple steps, like budgeting honestly and opening a high-interest savings account, you can steadily grow your wealth over time. Keep learning about investment options and don’t hesitate to ask questions—this journey is a process, and you don’t have to do it all at once.

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