How to Manage Your Money When You Don't Have Any

The author suggests, not living within but below your means. This means clearly defining the difference between the thing you “Want” Vs Things you “Need”

Example – A luxury car on loan is a “Want”, while a modest car without a loan is a need. – Ideally, you should settle for a smaller Car “without” a Loan.

Pick up your bank account statement or Credit Card Statement and analyze your spending – You might notice you are spending a lot of money on many avoidable things.

If you think you are using your credit card and paying on time. That’s a flawed thought. You don’t need to buy many things like coffee, clothing and luxury things on “credit”. Buying things on credit unless your life depends on them doesn’t make sense. You can either minimise your spending on your credit card or stop using it completely.

Ideally, you should have ZERO loans. Apart from home loan cut/ finish all loans at the earliest. A home loan is fine but your intention should always to foreclose this loan earlier. Every year you are postponing your loans – you are making the banks richer by handing over a huge interest payment which ideally could have been your spending or savings.

Worst loans in order – 1) Credit Card 2) Car loan 3) Education Loan 4) Home Loan

At least 15% of your earnings need to be saved every month. If you have kids and need to plan for their education – Make this saving 30%