As you may have probably already know from my other articles, I am a security oriented guy. In my childhood, my family taught me the importance of savings as financial cushion and of a parsimonious life. As children sometimes do, I internalized these lessons and exaggerated the concept, spending (very little) money only for strictly necessary items or services, and often negating myself any kind of “costly” pleasure. I started investing money actively only in 2019, as until then I saw investing only as a way to quickly lose money.
Although it not always easy to cope with such a consolidated behavior, a pleasant side effect is that all the money I did not spend was accumulating on my bank account. Decades of savings paid off, at least financially, as I could suddenly dispose of a considerable amount.
This finding was quite a surprise, because several friends of mine were always struggling to find a balance between income and expenses – I lend some of them money up to 8.000 Euro at once – and since then I was just content that my financial situation was stable.
Observing the relationship my friends and other people I knew had with money, I can identify one big difference leading to the (financial) antithesis I was part of – and that you probably have already figured out. In the article “Keep track of your expenses“ I point out how important it is to know the balance between your income and your expenses, and how you use the knowledge you get from knowing how you spend your money to fine tune your expenses.
But what can you do with the money you save month after month?
Every month, I invest ca. 40% of my netto income in different fonds and ETFs, using the Broker App Scalable Capital (click here for more info*), as all saving plans are fee-free there.
Additionally, I put aside 10% of my netto income as a financial cushion.
Why do I need a financial cushion?
A financial cushion can be good for the mind, as I think it is never wrong to have a certain amount of money to help me in case I have any emergency or even for everyday things, as I don’t want to borrow money from someone or take a credit from a bank. That’s why I’m going to list what I think are the 5 most important reasons why I have a financial cushion – and why you should have too.
1. Financial independence
A certain amount of money means independence, for example from my job or my family. This means that having money in my savings account to keep my life running for the next six months, I don’t need to worry about a new economic crisis or another Covid pandemic lockdown. In other words, I have a safety net that catches me in difficult situations, so I can avoid major financial/existential fears.
2. focus on important topics
Maybe you have already experienced or know from acquaintances: The month hasn’t come to an end, but the money seems to being vanished and you have to scrape together all the leftovers to pay the bills left. Every penny has to be turned over twice before it can really be spent. Money is then drawing all your attention and you cannot focus on anything else. With a financial cushion, such emergency situations can be approached without fearing for your existence until your financial situation improves.
3. Increased psychological well-being
The financial security gained by having a financial cushion takes a big burden off my shoulders. The certainty of having enough money in the short term for the next few months strengthens my general sense of well-being and I am more relaxed.
4. one-off “unexpected” costs are covered
Sudden car repairs or any other major purchases, commonly known as “unexpected” costs, can be easily paid for with the help of your financial cushion. It is important to replenish the financial cushion after such an expense, so that you will be prepared as well for the next unexpected situation.
In the US, a often quoted survey of GOBankingRates shows that almost 70% of the respondents did not have more than 1,000 USD as a financial cushion in their savings account.
5. discipline in money management
A financial cushion strengthens discipline in dealing with money, as the discipline is not to touch this money and to use it only for emergencies. Many people find it difficult not to spend money when they have it just lying around in a bank account. Once you have learned how to build up a financial cushion, wealth accumulation is only half as difficult, as it follows the same principles.
How can I build a financial cushion?
Once that you have found your personal motivation to have a financial cushion, you will need to find out the causes keeping you from increasing the amount on your savings account.
For example, start to make saving money a priority. You shouldn’t wait until the end of the month to see how much money you have left to save. Instead, create a budget and put saving money at the top of your list of most important expenses. To determine how much you can set aside, add up the expenses you need to pay and determine which non-essential expenses you can cut to make more room in your budget to save. In case you don’t know where to start, I suggest you read the article about tracking your expenses.
Automate savings. To make sure you are saving money, ask your workplace HR department to deposit a portion of each paycheck directly into a savings account, or create a standing order to transfer the money amount from your main bank account into a savings account . This approach can work for even the worst savers.
You can then also find someone to hold you accountable. Being accountable for your goals is not something everyone can do for themselves. Scientific studies show that you are more likely to succeed if you get positive support and encouragement from other people. Share your savings goals with a friend or family member, or request the help of a professional, like a wealth adviser, your coach etc.
Final thoughts
A strong motivation is essential to start building a financial cushion, as with it in mind, you will always have a good reason to keep going.
What are your suggestions for having a financial cushion and maintaining a savings account?
Newly I discovered one of the most entertaining TEDx Talks I watched so far: “The Life-Changing Magic of Not Giving a F*ck” by Sarah Knight. In her TEDx Talk Sarah shares a very important lesson she learned by chance and she reveals the secret to inner satisfaction and joy in our life.
What is the TED Talk about?
The premise is, that we all have a limited amount of time, energy and money, or as Sarah calls it, a limited “F*ck Budget”. It is therefore very important to know what exactly we spend our F#ck Budget on.
When you think of a minimalism lifestyle, it’s about decluttering your life from unnecessary things and owning only what you really need.
When physical items are involved, the process is easy. For example, you use the “decluttering after a move” method: you pack all the items you own into moving boxes and whenever you need an item, you take it out of the box. After a few weeks – or months -, you’ll quickly realize which items remained in the boxes and you can safely dispose of, sell or give away.
But according to Sarah, disposing of superfluous items alone is not enough!
So what if we could apply the decluttering idea to also get rid of all our daily tasks, obligations, relationships, worries etc., in order to only keep what is important to us and brings real joy in our lives?
Concerning this matter, Sarah has discovered a simple method, a kind of mental clear-out she calls “Not Sorry Method”.
Life-Changing Magic of Not Giving a F*ck – Not Sorry Method
Step 1: Find out what you don’t care about in your life, i.e. all the things you “don’t give a f*ck” about.
Let’s say all your colleagues binged Money Heist – meh! -, Game of Thrones – watched it till the end -, the Olympic Games or the soccer World Cup – both boring beyond belief – and expect you to watch all the episodes/matches too, so you can join in the conversation at lunch. But now you realize you are not interested in the show/the sport event at all. Here step 2 comes in.
Step 2: Don’t waste any of your f*cks on anything that doesn’t interest you.
In the example, this simply means saying “no” to Money Heist, Game of Thrones, the Olympic Games or the soccer World Cup. If you really don’t care, why waste your precious time watching all the episodes or Olympic discipline, waste energy worrying about what might happen in the next episode or what soccer team will reach the finals, or waste money buying t-shirts, DVDs, pay-tv subscriptions etc.?
The important message is: you don’t have to be sorry if you say no to something you don’t like, to an invitation to a party you don’t want to go to or anything else. After all, you can openly admit that you are not interested or that you simply don’t want to.
Always be fair and not rude, because others have very different interests and believe you share them too. And if you need any advice on how to overcome your limiting beliefs, I wrote this article that will interest you.
Sarah also wrote this book*: Life Changing Magic Of Not Giving A F**K on the topic. The problem nice people and conformists suffer from is that they haven’t learned to say no, to live your own life and to stop fulfilling the desires and wishes others have. Above all, you have to stop thinking about what other people think about you.
The topic of saying no is important, many people spend most of their time doing things they neither want nor need to do, wasting their time, energy and often also money – not to mention the negative feelings they develop doing all these things.
This book really helped me to take a closer look at my own life and to change it. The advice she gives is presented in a very practical way. Admittedly, I also had to read the whole book with mixed feelings, as the language contains many scatological allegories.
The bottom line
By consistently reducing what doesn’t interest you, you will have more time, energy and money – more “F*ck Bucks”, as Sarah says – for what interests you and brings you joy.
There is no need for “using money you haven’t earned to buy things you don’t need to impress people you don’t like”.
We humans tend to act to impress others, sometimes we even think it is expected. But this is your life, your time, your energy and your money. So use it for what is important to you and don’t feel guilty if you are actually consistent.
Who is Sarah Knight
Sarah herself has climbed the career ladder over the years and has been a managing editor for New York City’s top publishing houses. Her problem, however, was that she was unhappy in her situation; so unhappy that it was hard for her to get up every day and go to work. Quitting her job, which certainly wasn’t easy, gave her the opportunity to realign herself and use her time, energy and money for what she enjoys – that still includes work, but in a different way.
Be sure to check out the video of her TED Talk. It’s worth it and really entertaining! Anyway, I learned something very important and that’s why I took the time to write this post.
In this post, I want to tell you the best 4 money saving tips that have helped me a lot and improved long-term my financial situation. Some of them are very concrete, others can be adapted to your own requirements.
I grew up in a very parsimonious family: I can still remember we didn’t have a TV when I was a small child, and it was an iconic event when my parents came home with it one day. We still kept it for more than 20 years (thank you Grundig for such quality!) despite it was a tiny and old box with bad sound.
And then came the time when my mother took me to the bank for the first time – I was still a child – and we opened a savings book account for me, where I could deposit huge amounts (of Italian lire, so not really worth anything but still impressive when one comic book cost 3.500 of them). Being instigated by stories of Uncle Scrooge, I loved to stare at the savings book and to imagine what to do with all that money.
Now savings books are outmoded and the younger generation cannot even imagine how it was when every country in the EU had a different currency, but my basic attitude is still the same as 30 years ago.
5 helpful money saving tips
1. a concrete goal
One of the best ways to save money is to set a goal. Start by thinking of what you might want to save for—perhaps you’re getting married, planning a vacation or saving for retirement. Then figure out how much money you’ll need and how long it might take you to save it.
I can tell you that to lower my sights on expenses is not always as easy as I wish it was. So what keeps me going?
For any negative action, like not spending money for Amazon Prime Video, I need a positive goal I want to reach. Saving – or building up assets – still isn’t enough for me; I have to visualize a specific goal in order to deprive myself from spending money.
Whether it’s for paying off the mortgage for your own property, a sailing boat trip around the world, or being able to pay yourself an unconditional basic income without the necessity to work after your 40s. Everyone has something that motivates them personally to save and invest. So if you’re at the start of saving money, you should be aware of what motivates you – this will help you stay on the right course for the years to come.
2. Cancel Unnecessary subscriptions
Subscriptions are a money-making dream for a lot of companies. This is because once a customer subscribes to their service, they’re more reluctant to cancel their subscription—even if they hardly ever use it.
One of the biggest costs I always underestimated were monthly subscriptions, which can quickly add up to a considerable amount. Many of them were often not even necessary or the same service is cheaper elsewhere. Subscription are particularly “perfidious” when you pay in advance for a long time period, giving up to the promise that you will save lots of money by choosing a yearly subscription.
Subscription are not only limited to the digital world: public transportation, fitness center, magazines or newspapers are money-hungry services that engulf part of your earnings on a regular basis. Some of them are probably necessary for you, but you can check if you need all of them.
As since over one and a half years ago the obligation of working from the office ceased to apply, I cancelled the subscription to public transportation. When I have to go to the office, I can still ride my bike to reach it, or in exceptional situations – like very bad weather -, I can take the train and in the end I am still saving money.
One good advice is to send the cancellation already when you have just subscribed the service, at least I don't have to keep all notice periods in mind and sometimes the vendors come back to me with good offers if I withdraw the cancellation. What also helped me is to make a list of all my subscriptions, analog and digital, and sort out what I really needed. The others I don't need I terminate.
3. taking food from home
Meal planning is one of the easiest ways to save money. Use the food you already have in your cupboard, pantry, garden and freezer to save money.
One of my biggest monthly variable costs is food, but the variance is given by how often I have lunch at work or order the food at takeaway’s. Depending on where I am, this can be more or less expensive. During my academic studies, in Italy as well as in Germany for a total of almost ten years, I have usually taken my lunch from home.
Nowadays, with a good basic income, I like to order food for dinner at least once a week. I am aware that doing so, I spend up to 100 Euro (25 Euro a week) every month when I could cook at home and so spend only 20 Euro in total, one fifth of the expenses. This is a tiny luxury I allow myself, fully aware that the amount adds up to over 1.000 Euro a year.
4. invite friends over
Save time and money by doubling the recipe. Next time you make a family favorite, double the recipe and freeze the leftovers for another day. That way you can get two meals out of one and use the ingredients more efficiently with less waste.
If you do a lot of things with your friends, this money saving tip will help you.
Often when I went out with friends, it was in combination with going to a bar or some other cost trap like Oktoberfest, Go-Kart or other expensive recreative activity. Now I prefer to invite friends to my place more often and they do the same, as they also enjoy just being together without the need of distracting ourselves with other activities. You can also cook for – or with – your friends and enjoy a good meal.
Additionally, you are not bound to opening hours and can also have an all-nighter.
5. minimalism
You’ll only start saving money when you learn healthy money habits and let your future needs be more important than your current wants—aka when you make saving money a priority. So do it!
I am not an extreme minimalist in the sense that I only want x things in my life and nothing more. For me, minimalism is about a mindful consumption. I do not need a new smartphone or laptop every year. Minimalism also helps me to get rid of things and sell them on Ebay-Kleinanzeigen, Vinted or other platforms.
I believe that everyone has things in their home they no longer need. If you add up the sale value of all these things, most households could end up with several thousand euros instead of having the garage, cellar or attic full of stuff they don’t need anymore. You kill two birds with one stone, you get pocket money and you have more space at home.
And you?
Are you already implementing one of the tips or a similar one?
Taking a look at my private calendar, I noticed that there are short time slots throughout the day that I did not use to schedule. I didn’t schedule anything, because either it seems impossible to me to find any activity to do in-between two other events, or because these idle time slots just seem too short. (But theoretically they still last 15 minutes or more.)
In this idle time – I used to consume classic time wasters: YouTube, Facebook, Instagram, … YouTube is probably the biggest time sink.
Exactly because I was so annoyed to have no time to read a book I bought months ago – or several books -, or to read the articles that are saved in my browser and prolongate the list more and more, I have been looking for ways to spend this idle time in a meaningful way.
If I extrapolate, I theoretically have at least 1 hour of idle time every day, on some weekends even significantly more.
Sometimes my appointment calendar looks like this.
Some examples:
Getting to Munich from Erding – or vice versa – already takes over one hour one-way;
I have 30 minutes idle time when making lunch and dinner and waiting for the food to get cooked;
at work, I need 30 minutes for lunch but after eating I wait (and waste) 15 minutes to start the digestion;
Getting ready to leave the house, I am ready always way too early and then wait up to 15 minutes till it’s time to go;
When I boot the PC, it takes 10 minutes to be operative – the booting is oven after 1 minute, but the PC is terribly slow right after the start.
I’m not talking about taking advantage of every last minute. Especially not when I am with other people.
I do realize, however, that it’s incredibly worthwhile to think about the idle time and how to use it wisely, for whatever that may be. One hour every working days – let’s say 220 in a year – adds up to 220 hours idle time: Over 9 days!
In the next section below you can find some ideas on how I use my idle time (when I want to). Yes, they all sound obvious, but sometimes it takes the right impulse at the right time to act accordingly.
Suggestions for your idle time
Some years ago, I wouldn’t even listening to podcasts. But now, I listen to them almost daily. Here’s why.
Idea #1 – Podcasts
I love listening to podcasts in my idle time.
Whether I’m on my way to work, in the car or train, working out, or otherwise on my own, podcasts are my first port of call.
I can find everything from entertainment (e.g. “Couples Therapy with Candice and Casey“) to motivation, inspiration and education (e.g. “The Tim Ferriss Show” or “TED Talks Daily“). If you use an iPhone, just check out the podcast app and search for the topics that might interest you. You’re sure to find what you’re looking for!
Some podcasts I like to listen to at 1.25x or 1.5x speed. I can still follow the conversations and dialogues, and this way I can listen to 50% more content in the same amount of time.
Idea #2 – News & Blogs
I prefer reading news on my laptop in my idle time, but I also used to be a subscriber of the Süddeutsche Zeitung and to read the analog, paper version.
When there are no new podcast episodes or I have a chance to sit down, for example on the train or plane, I read the articles that pile up in my bookmarks. I also use medium.com and some newsletters, gathering articles every day based on my interests.
Idea #3 – Books
If my next idle time slot is long, like the upcoming one hour train ride, I take one of my many unread books with me, mostly in digital format on my Kindle*.
I have been reading since I was a little child and honestly I still prefer printed books where I can make my onw annotation and mark interesting sections. However, eBooks are very convenient, especially when I devour a novel in a few days.
Idea #4 – Eternal To-Dos
I try to write new blog posts whenever I have some spare minutes in my idle time.
When it’s really only 10-15 minutes, or I don’t feel like listening to podcasts or reading but I still want to be productive, I rummage through my perpetual to-dos.
It’s not uncommon for me to write things on my to-do list and feel like I’ll never get rid of them, as the list sometimes gets longer and longer. They’re usually sucky topics like “cleaning out notes on my phone” that you can fit quite nicely into your otherwise empty and unused time.
Final thoughts
I think we all have more time than we think and as you can see, there’s practically always something to do when you’re feeling productive.
The valuable thing about idle time is that I don’t have to free up time elsewhere when I want to listen to a new podcast episode.
I’d be very interested to hear what you do with your idle time. For example, I’ve found that I tend to use that time less for creative things (even though it’s not uncommon for good ideas to come out of it).
As far as I know, no one has ever become rich by just spending money. To find out where my money flows or how much I spend for this and that, it’s in your my interest to know my expenses. In the following article I will explain why it is also good for you to keep track of your expenses and of what you’re spending your precious, hard-earned money on.
Why it is so important to keep track of your expenses
Your own income is usually easy to keep track of. If you are employed, usually there is only one or a few main sources of income. For most people, the source is probably their full-time job, and the money is usually transferred once a month to their bank account.
When it comes to expenses, things are more difficult. There is a large share, such as rent or insurance, you know very well about. However, there are countless other expenses that occur randomly within a month or that are spread over the year.
You probably have experienced it too: you start the month and the first week seems to be manageable. €15 here, €50 there, another €20 here, the rent is quickly transferred and so on.
From the second week on, the show begins: “Did I spend 200 Euro last week or maybe 350?”. Towards the end of the month, you feel like you have been withdrawn several time money from the ATMs and still have no cash in your wallet.
I go now through life being financially mindful.
What used to bother me a lot is exactly this feeling: not knowing how much I have actually spent and how much I am still allowed to spend before my bank account is empty.
This is the reason why I started tracking my expenses back in May 2018, shortly before I started a new job. After all, taming one’s expenses is important independently of the income; however you can learn that wealthy people are usually very aware of their expenses.
A few years later, I have come up with 3 good reasons (plus a bonus one) you should keep in mind as reasons why you should keep track of your expenses.
Reason #1
Keeping track of your expenses is often the first step in getting your finances in order.
Reason one is obvious: Tracking your expenses and knowing at any time how much you have spent so far ensures you stay in control of your spending. You also know exactly how much room you have for improvement.
After I started documenting my expenses in 2018, I used a real budget planner App relatively quickly and still use the same planner today, as it fulfill all my expectation. Over time, I have accumulated quite a bit of income and especially expenses, which I can now filter, evaluate and compare as I please.
But you don’t have to wait several years before you can use the data and get actionable insights from it. After just one month, you will have a very good idea of where your money is exactly going.
The longer you track your spending, the more you will learn about your money and yourself. You will get a very good picture of it after 12 months, because by then all costs, even the ones that happens once a year, will have appeared once, even those that are only paid once a year, such as insurance, vehicle tax, etc.
Reason #2
by tracking your spending and understanding what you spend money on and how much you spend, you can see exactly where your cash is going and areas where you can cut back.
Keeping track of your expenses is the unique chance to evaluate your consumption behavior over time. Due to the fact that many budget planners offer numerous functions such as filtering, comparing, exporting, etc., you can very easily analyze different types or amounts of expenditure month by month and draw actionable conclusions.
After you have tracked your expenses for some months, it is now time to let them talk. Your goal should be to have more money left at the end of the month and at the same time to get more out of your money – in other words, to increase your savings rate without having to renounce to what you enjoy.
And this can only be done if you identify unnecessary expenses and fight them.
After you constantly evaluate your expenses, you will notice, for example, that you pay monthly for a music streaming service and have subscribed another one without really using it. Or you realize that you spend more on electricity than on food every month and that you could easily change providers and perhaps identify one or two electricity guzzlers. Or you realize how much other supposedly small expenses, such as smoking or your morning coffee to-go, cost over time.
Reason #3
How you manage your money is a personal decision that only you can make. While some may prefer logging each of their transactions manually, others may like an app that syncs to their accounts and tracks expenses for them.
This is the absolutely necessary basis for being able to optimize your expenses. Then once you know where your money is flowing to, you are able to cut unnecessary expenses and to save actually more of your income.
Then monitoring and tracking your expenses doesn’t help you any further, as long as you don’t take action based on this knowledge. Like an entrepreneur, you decide which expenses are necessary to keep you growing, which ones are required for “maintenance” and which ones are utterly unnecessary.
Bonus
No matter what route you choose, make sure you are setting aside routine time to check on your spending and evaluate your financial progress as you go.
The 3 reasons mentioned so far are more of a financial nature, which means you will know how much money you spend, what you spend your money on and how you can optimize your money.
However, there is a bonus reason you shouldn’t underestimated: Having full control over your finances.
Not having control over my finances, whether I earned well or not, had quickly lead to stress and depression.
In combination with a sufficient financial cushion, being in control of my own expenses – and finances in general – has been the foundation and recipe for success for a restful and carefree sleep. So the psychological value of knowing what is going on is very important for my well-being.
Perhaps you and your sleep can benefit too from having control over your financial life.
Common objections and rebuttals
Keep yourself motivated: At the end of the month, you have the option of rolling the money over into the next month’s category or transferring it to a savings account.
“I can’t follow every single issue; it takes too much time.”
If you have so many expenses that you can’t write all of them down, then let’s reflect on this. I’ve been using a budget planner since 2018 and I track every single expense.
If it was a holiday where I didn’t always have my mobile phone with me or if it was an evening where a lot of individual expenses came together, then I write them down consolidated as one expense. It’s better to consolidate and round off than doing nothing.
(In case you feel like you suffer from chronic lack of time, consider reading this article about the topic – and how to manage it.)
If it costs you too much time, it’s certainly advisable to track all your expenses, because it sounds like there’s a lot of potential for optimization!
I don’t want to save my expenses and income online.
I use an online budget planner and I know that some people may not necessarily like documenting their expenses and income online.
However, this perceived insecurity can easily be put to rest.
First, use the App of a reputable vendor. Almost every bank offers one or several budget planer App you can download and use. Or you take a look at legitimate vendors in the Apple or Google App marketplace, watching out for data security and a high level of encryption.
Secondly, make your entries anonymous. When you enter your salary, you are not forced to write down which company you work for or to add your company ID. The type (income), the category (salary) and the amount are sufficient.
You can also anonymize the email address needed for registration (e.g. use an abstract name for the email address instead of your own), if you want to get the maximum anonymity.
Third, use offline solutions. If you are still skeptical about an online budget planner, there are also offline solutions such as Excel templates or even entire offline budget planners.
I already manage my money well; I don’t need a budget planner.
I bet you do. And I can promise you that you can easily save 100 Euro every month after the first 3 months just by taking a closer look at your expenses.
In addition, at least for me, it awakens the ambition to get more out of my money and I spend my money in a much more targeted way without even having the slightest feeling of having to to renounce to something.
In the end, your household is very comparable to a small business that has the same income and expenses. A healthy company is characterized by the fact that it achieves positive profits month after month, year after year. So you should also earn more money than you spend, month after month, year after year. And I think the best way to do that is to know your expenses.
How I keep my spending under control
The budget planning / budget tracking App I use
Categorizing your spending is the most important step in keeping track of your expenses.
As already mentioned, I have been using the free web budget planner App since 2018.
The core of the planner are the categories that you can select for income or expenses. I suggest you adopt at least the following ones, but feel free to add more if they suits your need.
Groceries: This includes food, drinks and small items you can buy in any supermarket.
Restaurant: Whenever I buy or order food somewhere, I keep track of the expenses here.
Housing costs: This item includes monthly rent, but also accommodation costs in hotels or other accommodation.
Clothing: This takes into account all clothing items needed.
Education and training: For example learning platforms, books, etc.
Entertainment: Cinema, concerts or festivals.
Travel: Money spent on holidays.
Transportation: All expenses for cars, public transport or airline tickets.
Hygiene and personal care: From deodorant and shower gel to perfume, drugstore items are included in this category.
Insurance: Everything related to insurance expenses.
If you have special expenses that should be included in a separate category due to their amount, you should of course include them. One example is the costs of keeping pets, if you have pets. Categories that appear rather infrequently can of course be consolidated just as well.
The following rule applies to the categories: as many as necessary; as few as possible.
After you have tracked your first weeks and months, your Budget Planner will look something like this:
This overview allows you to see when your expenses exceeded the income. Here you can see that in December 2020 and in March 2021, I spent more than I earned.
The main reason why I still use the Budget Planner App is that it is very easy to use on the move. I make all my entries via smartphone in the moment I spend the money; it only takes a few seconds.
Try the web budget planner yourself and create some income and expenses. If you find a better budget planner, let me know. I think this one is really great so far.
In any case, I advise you to watch, analyze and optimize your expenses. Believe me, it will be one of your best investments for the future!
Here I can check where the money flows: The biggest item – almost half of the expenses – are the different investment plans.
Keeping track of your expenses In a Nutshell
Know your expenses inside and out, because that’s the only way you can get the most out of your hard-earned money and start building your wealth sustainably.
3 important reasons why you should track your expenses, e.g. with the help of a budget planner app:
Reason: Knowing at any time how much money you have already spent;
Reason: Evaluating your spending and know what you are spending your money on;
Reason: Optimizing your spending and cut unnecessary spending.
A budget planner that has worked very well for me for years, especially on mobile devices, is the free budget planner App Our Budget Book for Android.
Keep track of your expenses; Check your account statements; Categorize your expenses; Use a budgeting or expense-tracking app; Explore other expense trackers; Identify room for change; Stick to Your Spending Limits; Choose What to Do With the Money You Did Not Use; Track you expenses; Use a budget planer app/our budget book; On the travel photography blog of claudio salvati photography.
Tracking your spending is often the first step in getting your finances in order. By understanding what you spend money on and how much you spend, you can see exactly where your cash is going and areas where you can cut back. How you manage your money is a personal decision that only you can make. While some may prefer logging each of their transactions manually, others may like an app that syncs to their accounts and tracks expenses for them.
No matter what route you choose, make sure you are setting aside routine time to check on your spending and evaluate your financial progress as you go. At the end of the month, you have the option of rolling the money over into the next month’s category or transferring it to a savings account. For bills that vary, like your power bill, you may want to roll the balance forward to help even out the cost of the utilities each month. For things like groceries, you may want to transfer it to savings so that you can build up your emergency fund or work toward other goals.
Taking care of my own projects, may it be finances, hobbies or voluntary/community service, takes time, no question. Time that I don’t always have, however, because we all usually have a full-time job, have to take care of everyday problems, and some of you perhaps even have children, so that sometimes there is no time even for hobbies or other personal activities.
Apparently I don’t have enough time
Sometimes, I feel myself overwhelmed by all the apparently important tasks to do in addition to my full-time job. I firstly didn’t believe that I will find any time for private activities.
But I found a solution!
Even in such situations, when I think I don’t have enough time for other things, there is usually much more time than I assumed in the beginning.
Because it wasn’t easy to arrive to this realization and I know some people who often are themselves in such a situation, I want to share my thoughts and my strategy with you. I hope it helps you as well.
Understanding time correctly
What to do when I don’t have enough time.
Time is finite. Unfortunately – or fortunately -, there is nothing we can do about that.
However, it is more important to know that we are in charge to decide how we spend our freely available time.
I have understood that it is not about optimizing the things I do and getting 10 minutes here or 30 minutes there of “more time” out of it. It’s much more about how I use my free time in the first place, and whether that’s in alignment with what I want.
Laura tells us, among other things, the story of a successful and busy woman who had little spare time in her calendar. However, the malfunction of her water heater not only resulted in her basement being flooded and needing a quick fix, but also meant that she was suddenly able to free up 7 hours at short notice in her busy week. Why? Because the water heater became a priority.
Another example she tells is the story of an entrepreneur and mother who initially didn’t have time to interview Laura because she wanted to go hiking at the same time. This woman didn’t have time for the interview, not because she was chronically short on time, but because the interview simply wasn’t a priority for her, but hiking was.
Since that video, I’ve come to see the saying “I don’t have time for …” with different eyes. It should mean not so much that you don’t have time for X or Y because you simply don’t have time, but rather because X or Y is simply not a priority.
But not only Laura’s TED talk was an epiphany for me. In January 2020, I ready the book The power of now* by Eckhart Tolle. The basic message of this book is that everything we experience, think and do happens now. easy to apply and also a help in some situations. I still don’t feel the spiritual enlightenment the subtitle promises, but the book is nevertheless worth reading.
Making correct use of my time
What to do when I don’t have enough time: Prioritizing and heading for the activities that are the most important.
A week has 168 hours in total. Having a full-time job with at least 40-hours a week and 8 hours of sleep a day on average, that still leaves 72 hours for what’s important to you. Even with a 60-hour week, there would still be 52 hours available for you.
The basic principle is to always schedule priorities first, similar to the case of the broken water heater. So if your priority is to read a new book every month, then schedule time each week for your book within those 52-72 hours.
Everything else should happen around those priorities and perhaps fall to the backlog if there are other priorities. Acting this way I can make sure that I have always time for what is important to me.
Laura recommends to have three different life areas: career, relationships and yourself. That is, when I plan my priorities for the week, I try to set priorities for all three areas and to grant each area enough time.
I know from my own experience that this usually happens almost the other way around, but it can also be seen in the statistics. Distractions lurk everywhere, which supposedly only cost a few minutes here and a few minutes there.
Besides, you can’t be productive anyway if you have to leave in 30 minutes or less, or come home in the evening exhausted and then prefer to watch a movie, right?
German spend on average 17 minutes on Snapchat, 21 minutes on Instagram and a whole 42 minutes on Facebook, per day! And that’s just three of many social media platforms, not to mention YouTube, Netflix and Amazon Prime Videos.
As I said, I have realized for myself that chronic lack of time is not caused by the fact that the day has only 24 hours, but rather by the fact that I – consciously or unconsciously – make Facebook, Netflix & Co. a priority and then at the same time I complain that I am making progress in more important activities like reading a new book, taking care of my finances, starting a new project, etc.
Now this doesn’t mean that I give up YouTube and the other apparently time wasting platforms. It means that when I have some idle time, as I do now, I consciously decide what to do. Now I am writing this article for example and next time it could be the next chapter of a book I want to read.
What to do when I don’t have enough time: Prioritizing and heading for the activities that are the most important.
As described at the beginning, I have a lot of stuff going on, at work but also privately, so I often work till late and sometimes I honestly go to sleep right away. In the worst case, my free time is then limited to the weekends, because after all, I don’t really want to give up my 7 to 8 hours of sleep.
I would by a lie to tell you that I now manage to do everything I want after all the knowledge and tips I told you. Nevertheless, I am in control of my time and I can always manage to get the things done that are most important to me.
This includes, for example, writing a new blog post, continuing my education, exercising or simply relaxing. It works if you give your needs the urgency of a broken water heater.
This is exactly where it is important to prioritize. When something is important and urgent, I make it to my priority number 1. Things that are not important enough, or pure distractions such as Facebook or the new Netflix series, I then simply have “no time”. They are not a high priority to me, as long as I haven’t done what is more important.
In the meantime, I’ve also adjusted my morning routine a bit. For example, I try to get up an hour earlier than usual (I still need 7-8 hours of sleep) and use the time mainly for myself. In the morning, my thoughts are still fresh, so I can be creating and write new blog posts or take care of other priorities.
Final Thoughts
The whole strategy comes down to one basic principle: I plan my priorities first and I don’t have time for what is not one.
What are your suggestions for accomplishing what you set out to do despite a lack of time?
What to do when I don’t have enough time. what to do when you don’t have enough time. how to get more hours of sleep. how get more free time from a full-time job. how to overcome lack of time. some advice on what to do in idle time: listening to podcasts; short time slots: ideas for idle time activities. On the travel photography blog of claudio salvati.
I noticed that I set myself limits that hold me back, at least sometimes. This is unfortunately a common behavior, and in the end it prevents me from growing and developing.
What limits do I set myself?
A good example is that I would love to take time off and just do my own thing. That means business, blog, my personal daily routines and so on. Funnily enough, I am in the privileged situation that I could do that without any problem, at least for one year.
But I honestly hate the thought that I would have to eat – even partially – into my saving and investment assets. That’s why I’m sticking to a 100% job at the moment and continuing to raise everything else on the side.
My need for security with regard to my asset cushion is enormously high, but this is also a problem from another perspective: the more assets I accumulate, the less I want them to be consumed.
Mostly because every euro I have less cannot work for me and generate more money. So it’s like a vicious circle.
“You are 100 percent responsible for what you do in your life.”
Gary John Bishop
In the past, I was often told that I couldn’t do many things, even though I had never tried them. Often, you can’t really do them because you subconsciously tell yourself that you won’t succeed, not because you aren’t able to. So I did not even try.
Now I just try things out and see if I like them, and after a while it becomes clear whether I succeed or fail.
A good example is photography. I started taking pictures at a very young age, and I stuck to it over two decades. Deciding to make a business out of it, I was used to hear some family members and friends saying that I won’t succeed, that I couldn’t do it.
Anyone who has been in a similar situation will know what comes next: You can decide to make these beliefs become reality, as you stop following your dreams. Or you decide to try anyway and to face all the difficulties that come with it.
Photography is not black magic and running a (very) small business neither. You can learn a lot by yourself, you can ask people who already walked this path for advice and then you get used to it.
Am I now a world famous photographer the most prestigious magazines want to work with?
Not at all! But I am going in the right direction, and you know what? I will stick to it, until I fail or succeed. Because doing nothing is worse than failing, as I won’t learn any life lessons or gain any experience. Not to mention I won’t have the possibility of achieving my goals and growing into a better version of myself.
The advice I can give you is to stop holding yourself back and to start taking the chance of bringing your intentions into action.
I am my only limit.
It is about little things. Little things that we can change. For this we do not need an hour a day, not even ten minutes. We don’t need silence or undisturbed moments either. We simply need to learn to listen to ourselves again. And then we need to reflect on what we have heard, so that we can then identify what needs to change. Nothing more, nothing less.
Recommended reading
A great book about self-acceptance and developing an awareness of how we treat ourselves and how we think about ourselves is “Unfuck Yourself” by Gary John Bishop*.
Furthermore, the author explains in a very clear way how we influence our reality and our feelings through our self-talk – the conversations we have with ourselves in our thoughts.
For example, the author points out that we are always talking about what we WILL do, and at the same time he raises the question of why we don’t just change the verb when we want to do something. We certainly will not lose weight when we say we will lose weight. “Will” always refers to the future but we need to act now in order to change the future. We could just as well say that we are losing weight now, and act accordingly.
In today’s society, we are told when we have to work, mostly according to the 9-to-5 rhythm. With luck, you have “escort” times and can better arrange when you want to work, but even this framework is limited. In this post I want to explain you why understanding my inner clock was so important for me.
Of course, there are professions where you have direct contact with customers, so it is understandable that you have to work within a fixed time frame. But many jobs are actually completely independent of the time of day and could theoretically be done at any time.
When are you most productive?
If I asked you this question, could you answer it immediately? Probably not, and if you could, you’d be a lot further ahead than other people. For me, the time when I am most productive is after a good sleep in the morning, beginning at 6 a.m. till noon, so by definition I am an early bird. Once you know when you are most productive, you can use that for yourself.
In case you have to stick to a fixed working time, you don’t need to surrender. The food news is, that you can had train yourself to be extremely productive at other times of the day – or the night. One of the reasons I am most productive between these times is probably that most people are asleep and are busy getting to work, so that I get less distractions from emails or phone calls. I also have the incentive of knowing that I am working on my goals.
Understanding my inner clock is important for keeping my inner harmony.
What do I mean by productivity?
For me, productivity means using time efficiently and having little downtime. Downtime includes breaks, distractions, motivational or thought blocks. If you use your time really productively, you can get a lot of things done. In addition, you can divide your activities in such a way that you can work more efficiently.
An example: When I create my post pictures, it takes me about 3 minutes, depending on the picture, if I were to do them individually. I would open the program, edit the picture, then upload it and insert the picture into the post. But when I create and edit 5-10 post images at once, I only need 2 minutes per post image. So I save 33% of the working time and am more productive and efficient.
Understand my inner clock and time management were be a great help for coming closer to and achieving more of my goal. If you want to learn what could also be of great support for you, take a look at Getting things done* by David Allen. This book helped me a lot in being more productive and efficient.
Self-employment
If I ever become self-employed, I will completely restructure my working day so that I can adapt my daily routine to my inner clock. It is also important, regardless of when you work, to never interrupt yourself when you are in flow. You can tell because you are extremely productive and you don’t even realise you are working. Similar to sports, when you have a perfect run that you don’t want to suddenly stop, but to keep going until you reach the finish line.
Real-life Actions after Understanding my inner clock
I worked several years for a consultancy agency in the automotive sector, having as usual the constraint of 9-5. In the first years, I focused on my performance, trying to do best in the fixed (time and location) frame I was in. After a while, I started working from home: first one day a week, then two, three and so on, till I finally wasn’t bound to the office anymore.
From home, sometimes I worked early in the morning, starting before sunset, as I was motivated and energized by finishing working at noon at enjoying the rest of the day. But I wanted to push the boundaries. So I started experimenting and I realized that all the work of one week could be done on just one weekend, reducing 40 week hours to less than 20.
Why did it work? Because I could relax and accomplish so much for myself during the five days, and in the last two days I was highly motivated and energized. And the results were amazing: I was one of the best performing employees, not just for a short time period, but for several years.
Now I spend the first hours of the day writing for this blog or editing pictures and videos for Instagram, YouTube and other social media channels I use.
With this new blog posts series, I want to share with you thoughts and experiences I had in the last years that are not related to travel or photography but that could actually be interesting for you.
The short summary of this article: Long-term thinking – Why it was and is so important for my life! When you think long-term and act accordingly, a fulfilling life is rather easy to achieve.
Why all this?
Over time, I have collected a lot of advice, much of which I use for myself on a daily basis and has served me well.
Many of these tips, wisdoms, basic rules, etc. sound quite simple at first glance and you may even already know them. However, in the past I was used to ignore them after having picked them up somewhere. This was especially true when I didn’t have a personal connection and haven’t seen the results with my own eyes.
For this reason, in this article series I not only want to document the tips and advice for myself, but also pass them on to you.
The pieces of advice I will tell you about have often come from successful people I have had the privilege to meet – a few times – or I have read about. Most of these people were not only successful businessmen or businesswomen, but also mentors, people who built their own businesses after being employed for their entire life, real estate investors, supervisors and colleagues with decades of professional and life experience.
Nowadays I take advice very seriously, even if it doesn’t come from direct acquaintances, because I now know how much knowledge from personalities like Warren Buffett, Gary Vaynerchuk, Tim Ferriss, Mark Cuban and many more is available to you for free and how much this knowledge could change your life and mine.
And when I write “could,” it is on purpose, because one of the biggest keys to success doesn’t lie in theory but in action and implementation.
But first things first, let’s get to my first best advice.
My best advice #1 – Always think long-term!
The first thing you can do to think long-term is to make conscious effort to think long-term.
I would like to start with a piece of advice from someone I unfortunately do not know personally (yet), Gary Vaynerchuk.
Some biographic information about him: He is an active entrepreneur from the US America who has increased his family’s wine business annual sales from $3 million to $60 million in just a few years and has become well-known through his digital media company and his shows on social media. His YouTube videos are absolutely recommended.
“Unless you’re gonna die, you should always play long-term!”
Gary Vaynerchuk
In other words, unless you’re going to die soon – which you hopefully won’t! -, you should always think long-term and act accordingly.
According to Gary, 99% of people want to see short-term results. Success must come to them as quickly as possible, everything else is a waste of time. The main reason for this behavior is that we humans are wired to think that consumption today is better than consumption tomorrow. This phenomenon is know as temporal discounting and its proliferation took place with the beginning of the industrial age.(Galor & Özak, 2016)
In the course of his career, however, Gary has repeatedly observed that the 1% who think long-term and have the necessary patience and discipline are more successful than the remaining 99%.
We [Bezos and Amazon shareholders] can’t realize our potential as people or as companies unless we plan for the long term.
Jeff Bezos
This is what he wrote in a letter to Amazon shareholders in 1997. Every subsequent year, Bezos has ended shareholder letters by attaching the original 1997 essay with a reminder of the importance of thinking long term. And every year, he is proven right.
The following examples show that Gary and Jeff are not only right, but that this advice can be applied to pretty much all situations in life.
Shares
A long-term investment is often safer, as with a long-term investment horizon, short-term fluctuations are not relevant as long as the portfolio is well diversified.
The “yield triangle” of the German Stock Institute is the best example of how it pays off in the stock market to think long-term. (Being in Germany and studying the German market, I will mostly propose you examples with reference to Germany or Europe, but the concept applies worldwide.)
Over a period of 50 years, the institute calculated what the respective annual return would have been if one had invested in the German DAX index, consisting of the 30 largest German companies, at a predetermined time and held the portfolio for at least 1 year to a maximum of 50 years.
While with an investment horizon of 15 years the worst return would still be +2.3% p.a. – covering at least the annual inflation, and the best +15.4% p.a. – so one has made money despite several major crises – with an investment horizon of only 5 years the worst result is -9.4% p.a. and the best +29.8% p.a.
Of course, a higher return is often achievable in the short term. However, the underlying risk cannot be controlled, so the probability of losing money is higher then when investing long-term.
With a long-term investment horizon, short-term fluctuations are not relevant as long as the portfolio is well diversified. So if you had invested in the DAX in 1993, for example, and survived the dotcom bubble and sold in 2008 shortly after the financial crisis, you would still have been rewarded with an annual return of +5.1%. Not bad!
In addition, a long-term investor is not forced to sell. If the same investor who had invested in 1993 had held his portfolio for up to 8 more years till 2016, even +7.5% p.a. would have been possible.
In figures: With an investment of €10,000 in 1993, after 15 years and after the financial crisis the total value in 2008 would be about €21,000. In 2013, after 20 years and an average return of 7.5% p.a., the total would have been as much as €42,480 – and this despite several market crises.
Real estate
Real estate has been the long-term investment par excellence.
The situation of real estate as a capital investment is similar to the precedent example, whereby additional criteria are added here.
Real revenue drivers such as rising rents or the increasing value of the property itself can usually only be realized in the long term. In addition, keep in mind that 10% or more of the purchase price is due in incidental costs. This means that the property must first increase its value by 10% or generate corresponding income before you get into the black.
However, if you invest for the long term and hold the property for at least 10 years, you will not only be rewarded for your patience every month, but will also be exempt from capital gains tax when you sell it – assumed it is privately owned by you).
SportS, friends, relationships
First, in order to think long-term, you must focus on building your characters. You must build success habits, cultivate a growth mindset, and think far into the future.
I don’t have to tell you that long-term thinking pays off not only in investments. (But I still do, I know…)
When it comes to getting better at soccer, building muscle mass or losing weight, it’s not enough to play with a ball for a single day, to spend one day in the gym or to eat vegetables for one meal. Success lies in continuously pursuing your goal and not succumbing to a torn muscle on the first day. Even if the short-term effect will not always be visible, the result will be and it will last for long. The same principle applies for blogging, but also in my professional life.
Contacts in one’s own network or even relationships are no different. If you want to get the best for yourself in the short term, you may be able to take advantage of other persons in the first round, but in the long term you will destroy valuable relationships. Also in this case it is extremely important to build long-term and healthy partnerships, because the closer these persons are to you, it is either a win-win or a lose-lose situation. We all are in the same boat.
So, really take this advice to heart. It’s one of the basic attitudes I get up every day with and that will make my life easier in the long run.
