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Financial literacy

Further to my previous post "What about money" a few advices on basic financial literacy.


1. Plan and analyse your spendings and income.

Nothing new here indeed, just required exercise if you want to have a control over your money. Boring and time consuming until you get used to it, though there are dozens of mobile apps available to make the tracking more fun, and good old MS Excel is still here. When you start to understand what are the spending patterns you have, it will be much easier to save, even if you don't change the income flows. For me - Excel does the job:)


2. Create financial Safety cushion.

Highly recommended, doesn't matter what is your income. Put aside 10-15% of net income your earn, to ensure peace in mind and to have some money to see you through the crisis.


3. Check the prices before you buy something.

Shopping malls or chains are using various marketing strategies, so the price for the same product can be different. No need to purchase the stuff just because it is "on sale" now. But if you have decided to buy something, look for the shops where the item is on sale. With online shopping such hunt becomes even more interesting.


4. “I am not rich enough to buy cheap things”.

Sounds paradoxical but more you try to save, poorer you become. When you buy the high quality and expensive thing, usually it serves you for a long time. While the cheap stuff you have to replace more often, spending additional money.


5. Avoid risky investments.

Unless you know well enough modern financial instruments, don’t rush to make the investments, even if everyone is talking about it. It is not good neither for your wallet nor for your nerves. Indeed it is possible to earn bigger money while investing into shares and cryptocurrencies, as well as lose everything you have invested.


Do not fall a victim of social expectations.

We follow the social norms of the society we live in, which dictates us to radiate success through expensive stuff we buy. Though I see another tendency in Switzerland. The lifestyle and spending patterns of really rich people may appear "average" to the citizens of, for example, the post soviet countries.

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