In Good Finance I write about a wide variety of topics. All related to personal finances but I am pretty sure that not all of them interest you. Like the rest of readers.
You may love articles related to cost reduction or investment advice. Your favorites may be about psychology to save more and better, and so on.
As much as I write about different topics, however, there are some fundamental principles that flow through everything I write in Good Finance. These are not individual investment advice or nice ways to save a few euros. They are fundamental principles that are valid for any situation.
As always it is good to have very clear the basic concepts that will guide you at all times we will see what these fundamental principles or foundations of personal finance are.
The Foundations of Personal Finance
You have to know how much your time is worth
If there is something that is going to make you save a euro but at the same time it will make you waste an hour of your time, don’t do it. Calculate an approximate estimate of what your time is worth and, before getting on with a task, decide if it is worth investing that time. Time is money so don’t waste it if it’s not worth it.
Spend less than you earn, every month
This must be the fundamental commandment if you want to have healthy personal finances. Sometimes there may be exceptions and that in a given month you do not comply with it but it should only be that, an exception. If the exception becomes the rule you will have very important economic problems in a short time.
Do the things you like. The money will come later
This is very important advice. Especially if you are a young person who is starting his career. Follow what you really enjoy or strive to find what you love. Money will follow you if you do, no matter what you do, because passion and effort will bring money.
There is nothing free
Everything that needs money, even if it doesn’t cost you euros, requires some kind of investment of your time and effort on your part. If you think you are getting something absolutely free, it is not so. Do not fool yourself. Even public services are not free. You don’t pay taxes?
The simpler the investment, the better
If you need a lot of hours to manage an investment or a lot of time to investigate it normal, for most people, it is that this type of investment is not worth it unless the benefits are enormous. It is much better to invest your money in a simple and easy to understand investment, such as an index fund, before looking for complex investments.
Don’t spend money on things you can get for free
Look around and see the things for which you have already paid money. Many times those same things could have been achieved without a financial cost. It is very common that with a little imagination and effort you can get many things for free. For example, if you like to read, visit a library. Since part of your taxes are used to finance it, take advantage of it.
Improve your skills and learn new things
Improving your skills and learning new things has huge dividends. For example, learning how to organize your time will allow you to do many more activities and tasks in the same number of hours and in a more productive way.