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Money Basics
My 4 rules to get a solid Financial Health Score

My 4 rules to get a solid Financial Health Score

I have 4 simple rules, and I follow them religiously.

Build a budget (it’s a must!)

Why is it so scary for some people to even pronounce this word? This is actually the most important tool to manage your financial situation, allowing you to always be one step ahead. When I learned to properly budget, I can spend more on things that are important to me, and I’ve never been happier about my financial situation.

To make it simple, define, how much money goes in and how much goes out each month and plan a budget. At the beginning start by sticking to your budget for one month, when you succeeded, celebrate it and be proud of yourself, then go on for the next month. I know how though it can be to constantly keep an eye on your finances. For me the most annoying part was to collect bills in the supermarket and then add them to a budgeting book at home. I guess I tried it a dozen times like this – it never worked. That’s why I like Apps like Zuper. You just have to set up the budgets you need and Zuper does the rest for you.

The key to financial health is spending less than you earn. To make budgeting more fun, create a long-term goal, which will be possible only by following your plan. This always helps me motivate myself, even on the laziest days, when I just don’t want to do anything, especially think about my budget. You could even create a vision board, to have a reminder and see your long-term goals daily.

Use your budget

There is no point in making a budget and then letting it collect dust – your budget has to be monitored continuously throughout the month to help you with decision making. The main rule, when it comes to budgeting, is knowing exactly how much you can spend at any given time. Before making a purchase, check your budget. When you assign your money to your budgets you have a great overview of what exactly you will spend money on this month. This gives you the opportunity to see if you can afford another meal in a restaurant or if you should instead cook at home.

Don’t panic

So you have built your budget and are not so happy with what you saw? Don’t start looking for a second job yet – we will figure this out together. When planning a long-term budget, you might jump into some larger expenses, such as holiday gifts for your family, which always put pressure on you. I’ve learned that many problems seem smaller when you break them into pieces and deal with one small piece at a time. Do the same here! Cut the amount necessary into tiny one-bite pieces, and dedicate a small amount of money for it in each month’s budget. You can thank me later.

Make your money work

If you already budget and manage your daily finances like a pro, it’s time to go to the next level. In order to achieve financial freedom, you have to be prepared for the unexpected. What I do is create an emergency fund of 3 to 6 months’ worth of expenses. But don’t just leave this money hanging around – employ it. And the best way to do it is investing.

You don’t become a financial guru overnight, so stop judging yourself if something doesn’t go as planned. When it comes to many things in life, I always follow one rule – take one step at a time. You won’t be able to score a high Financial Health Score, if you stress over every cent you spend. I hope this set of rules will work as an inspiration for you, pointing you to the right direction. Just do yourself a favor and take it easy.

Paul Niklaus
Paul is a marketing manager at @ZuperBank. He's in love with marketing, standup comedy, and storytelling. In our blog, he shows you how to do the most with your money!
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