15 money management lessons to change your life

Money Management Lessons to Change Your Life

Mike Tyson made more than 400 million dollars during his career. His current net worth is less than 10. Let that sink in.

1. Don’t spend the money you don’t have #

Son, I get you. You want to start a new chapter of your life with a shiny ride. You are young and with a regular job. So you think you can pay it off without problems. But let this be a learning moment. Don’t sell your future for the momentary excitement. Don’t ever spend the money you don’t have.

2. The Shaq Rule #

Split whatever income you have into two parts. First is untouchable. That’s your tax money. Emergency fund if your taxes aren’t high. Simply not yours. Then split the second part into two further parts. The first one goes to savings. The second one you can spend on whatever you like.

3. Don’t become the snake #

Don’t become the snake sitting on top of your assets and not allowing anyone or anything near. Not even yourself.

4. Can you afford it #

Can you buy it thrice without affecting anything in your life? If that’s the case and you want it, go for it. In other cases, refraining from it is in your best interest.

5. Automated Savings #

So, set up automated transfers from your checking to your savings account. If you’d like to go the extra mile, make it difficult to stop the automated transactions. The more friction you can add the better. Then forget about it. Let the magic happen while you force yourself to live with the rest after the transfers. Things will add up sooner than you think.

6. Don’t trust yourself #

One rule of thumb is considering the cost peruse. If an item is worth $1,000 and gets used 10 times in years, is $100 per use worth it?

7. Give every dollar a job #

The moment your cheque arrives, assign a job to every single dollar down to zero. These assignments are the most necessary expenses. Food. Rent. Gas. Tuition. You name it.

8. Make it visual #

If you’re a notebook person, buy yourself a diary. If you’re more into technology, find a good app. Then start tracking as your life depends on it. Track every single penny without worrying about saving. This phase is for tracking purposes only. Don’t behave differently because expenses are being tracked. Live normally for a month or two.

9. Invest the right way #

10. Accumulate assets, shed away liabilities #

Don’t let liabilities rot away the foundations of your goals. Shed them away with the highest intensity possible. Replace them with assets instead. Let the money work for you. Let it allow you to taste freedom.

11. Keep the doctor away #

12. Flip table #

Instead of this cycle, flip the script. I must save at least 25% of my income. Let’s see what I can do with the remaining 75%. That’s the way to go.

13. Auto payments are the devil #

14. Spread your eggs #

Create several accounts instead. An account for emergencies. A different account of possible investment opportunities. A dry run account if you want to quit your job and pursue personal projects. An account for leisure activities and so on.

--

--

--

Writing about productivity, remote work, self-discoveries, and experiments -> http://sakytalks.com/

Love podcasts or audiobooks? Learn on the go with our new app.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
SakyTalks

SakyTalks

Writing about productivity, remote work, self-discoveries, and experiments -> http://sakytalks.com/

More from Medium

How To Stop Making Excuses And Create Wealth

What is a growth mindset when it’s at home and in your business?

How compounding effect can change you

7 Easy Strategies to Market a Health & Wellness Business