Regardless of what stage of your life you are in, financial education is and will always be a topic of great importance. As time goes by, securing the future in increasingly complex monetary terms becomes more complex.

If you’re 30, you’re halfway to retirement and it’s time to think more seriously about your finances. It is possible that during 20’s you have built and established professional career, purchased a house, a car and feel that everything is going very well. However, we make a lot of mistakes along the way, especially when it comes to money. Maybe you’ve been a compulsive buyer, a lousy saver, a terrible planner, and you’re just good at spending.

Regardless of the situation, it is mandatory that you fully master the 4 financial techniques as explained below:

Stop spending everything you earn

Many millionaires spend their money moderately, and if they do, it is for reinvestment. What do you get by spending everything you earn on luxuries and entertainment? It has been discovered that individuals who lived in the most luxurious mansions and drove the most luxurious cars are not really rich. In fact they are submerged in debt and financial problems.

Establish a percentage of savings and do it after receiving money. If you think, you will save what is left over at the end of the month, you run the risk of not saving anything or even remaining in debt. Start at 10% and gradually increase this amount to every extent possible. If you save what’s left over at the end of the month, you’ll never save anything.

Know your debt

As time goes by, we allow debts to increase to a point where you think it is normal. It is possible that, you have acquired a credit to pay for your studies, new apartment and the car you wanted so much. Not to mention the credit card that always saves you and pays for your trips. In any case, each time you acquire new and more expensive debts.

Evaluate how much money you owe and create a budget that will help you avoid more debt and pay off what you already have. Set the minimum payment on the highest debts and use as much money as you can to pay off small debts. Getting rid of your debts will have a significant impact on your personal finances.

Create an emergency fund

An emergency fund is extremely important not only for your finances but also for the mental health. If luck is on your side, you will never have to face a health problem, a family calamity, a bankruptcy, the loss of a job. But what would happen if due to poor luck, you fall into an emergency situation without a fund to support it? Wouldn’t it be terrible?

On the other hand, not having a fund to protect, makes you more likely to fall into debt with credit cards, loans or spend all your savings.

There’s one thing you need to be very clear about. Saving is one thing and your emergency fund is another. Within your financial plans you must put money in these two variables that have different purposes. The saving is for investment and the emergency fund is to deal with situations beyond our control.

Create budget

Sure you know the importance of a budget for your personal finances, but do you really have a budget, are you following it as it should be? The reality is that few people govern their habits based on a budget.

It is very important that you place where every penny you earn goes and commit to a plan. It doesn’t matter if you spend money on clothes or travel as long as these expenses are included in your budget. If you planned it, you won’t get any unpleasant surprises when you look at how much money you have in your account. Knowing your financial habits will allow you to reduce unnecessary expenses and increase your savings.

And remember that, if you’re really interested in starting own business, you should know how to manage time, money and motivate yourself while you start a business.

Author Bio:

Hi, I am Nikesh Mehta owner and writer of this site.

I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.

I can be reached at nikeshmehta@allonmoney.com. You may also visit my LinkedIn profile.