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Planning a personal budget
Drawing up a budget

We hear the word “budget” almost every day. But what exactly does it mean? Actually, the word itself originates from the old Norman language and means “a purse”, “a bag”, “a leather bottle” or “a money bag”. Conceptually, a budget is understood to be a scheme of revenues and expenses received or spent by a certain person (or a family, some business, an organization, a state, etc.) within a certain period of time. A budget is a combination of projected revenues and expenses. In the Budget Code of the Republic of Belarus a budget is construed as methods of accumulating and using monetary funds to ensure the fulfillment of the state’s objectives and functions.

Taking into consideration the available definitions of a budget several approaches may be applied when dealing with a budget: 1. a budget implies comparing revenues and expenses; 2. depending on the type of budget one can differentiate between a personal and a family budget or between a state and an organizational budget, etc.; 3. a budget is drawn up for a certain period of time; 4. each particular budget has its own objectives and tasks.

Option A: it is when revenues are less than expenses, which means a budgetary deficit; in other words, money is not enough to cover actual costs. In order to balance a budget it will be necessary then to either increase revenues or to decrease expenses.

Option B: it is when revenues exceed expenses, thus one may speak about a budgetary surplus, i.e., money is enough. If this is the case, one will have to think of how to more efficiently use excessive money.

Option C: it is when revenues are equal to expenses, which means that a budget is balanced. However, an externally balanced budget does not imply that it is also balanced internally. Let us detalize on the point. All sources from which monetary funds are received are considered to be sources of revenues. Revenues conditionally may be divided into permanent and variable. Permanent revenues include wages and salaries, bonuses, felloships, interest accruals on bank deposits, etc. Variable revenues are those revenues which you do not receive every month – this may be a quarterly bonus, a bonus for work results, money received from selling vegetables grown on your personal plot, payment to pupils for the work they do in summer, etc.

Expenses are costs incurred by us. Expenses may be obligatory (necessary) and non-obligatory. Obligatory (necessary) expenses include those expenses with the help of which we satisfy our essential needs. These are expenses on communal services, food, clothes, telephone communication, transport, etc. Non-obligatory expenses are those which help meet our momentary wishes, i.e., these are expenses on what we would like to buy but what we may decide not to buy at any time. Non-obligatory expenses often encourage us to save up. Therefore, if in Option B all revenues have been taken into account and expenses are of non-obligatory character, only such balanced budget is considered to be correct. If however expenses include non-obligatory ones and revenues are equivalent to expenses, such budget is balanced incorrectly.

Thus, a conclusion which may be drawn in connection with the above is as follows: a correctly balanced budget should be the aim of one’s personal (family) planning of revenues and expenses. 

The second approach is related to the type of budget. To understand things better, let us differentiate between the personal budget and the family budget. A personal budget is drawn up for one person, while a family budget is drawn up for a family. If a person does not have a family, he/she will not have to draw up a family budget, and this person’s budget is personal. A personal budget is a means of managing person’s money. As soon as a person becomes a part of a family, this person’s budget turns into a family one. Of course, there are families in which a family budget does not simply exist and each family member keeps his/her own personal budget. As a rule, lack of family budget negatively affects family relations and often leads to a divorce. Drawing up a family budget unites a family and makes every family member responsible for any joint decision on each family budget item.

The third approach is based on the fact that a budget is drawn up for a certain period of time. Depending on its objective(s) a budget may be drawn up for different periods of time (a week, a month, a quarter, half a year, a year, or several years). In case we need to evaluate our monthly budget, it will be necessary for us just to draw up a monthly budget. If we plan to buy some expensive technical items, to go on holiday or to make a present to somebody, the period of planning then will be longer. Planning may be short-term (usually, for a month) and long-term (more than a month).

The fourth approach is connected with the fact that any budget has its own objectives and tasks. As for budgetary objectives, these include comparing revenues and expenses, regulating a family budget, optimizing expenses, receiving permanent revenues, planning for a certain purpose, etc. In case of a budgetary surplus or a budgetary deficit the tasks will be, respectively, to efficiently use excessive money and to decrease expenses alongside with increasing revenues. With a balanced budget harmonization of non-obligatory expenses, if any, will be a task.

So, what do we do to draw up a monthly budget? It is required:   

1. To exactly establish what revenues a family has, in other words, what monetary funds a family possesses at present, or may have in the future. Say, it is necessary to calculate a wage to be received. Nowadays, with lots of programmes on the Internet it is not at all a difficult task. The most often applied programmes for the purpose are Home Accounting and Family.

2. To further classify expenses as obligatory (necessary) and non-obligatory.

3. To compare revenues against expenses. If revenues exceed expenses, you definitely go the right way and may use the margin to earlier cover credits, to plan expenses in advance or to save money. If it happens to be otherwise, you will have to thoroughly calculate your non-obligatory expenses and to reduce them to the maximum so that your revenues are the same as your expenses. Again, you will have further to exercise strict control over your revenues and expenses.

To draw up a budget for a longer time it is also necessary to take into consideration such factors as the economic situation in the country and the current rate of inflation.

So, it appears that drawing up a personal (family) budget makes the basis for financial planning of revenues and expenses of a person (a family). Drawing up a family budget and its implementation will result in saving certain sums of money which may be later used to reach one’s vital goals. International experts recommend saving 10% of family revenues thus creating “the safety cushion” for a family. Such “safety cushion” must comprise from 3 to 4 monthly budgets as there always occur some unexpected expenses. Experts also advise that 5% of family revenues should be saved monthly for creating the “safety cushion”. The average figures of an ideal family budget are as follows:

- Obligatory payments and money for buying vitally important things comprise 50-60%;

- Expenses on entertainments, travelling and rest constitute 20-30%;

- Savings (a reserve fund, future investments, money saved for buying something very expensive, pension savings, etc.) make 10-20%.

Winding up, let us recollect what Benjamin Franklin once said, “There are two ways for us to be happy: to minimize our wishes or to increase our money ....”

Wage

In accordance with the Labour Code of the Republic of Belarus a wage is a remuneration for labour that the employer undertakes to pay to an employee for the work done taking into consideration its complexity, volume, quality, working conditions, actual hours worked and working time.

The forms, systems and sizes of remuneration paid by employers to their employees, inclusive of additional payments of stimulating and compensating character, are established on the basis of the collective employment agreement, agreement and labour contract.

A wage is a monetary compensation for the work done. To calculate the sum of such compensation different methods may be employed. In some cases an accounting unit will be taken to mean the time worked in terms of hours; in some others – it may be a product produced within the established working time. In accordance with the above they differentiate between time wages and piece work wages.

The forms of labour remuneration establish the dependence of the size of a wage on socially necessary work.

Piece-rate system of payment for labour The size of a wage depends on the number of items produced according to established rates. There are different types of piece work wage such as the straight piece rate, indirect piece rate, progressive piece rate, regressive piece rate and accord wage. Piece work wage is used mainly in case of handwork, machine-handwork or work the quantitative results of which are largely based on the degree of complexity in a team of workers (in a brigade or at site).

  • The straight piece rate is paid in accordance with the established job prices, which are not to be increased or decreased, for any production unit or work of required quality.
  • The piece-work bonus system is used for awarding a bonus to an employee for efficiency and achievement of the qualitative indices in accordance with the Regulations on Bonuses.
  • The indirect piece rate is used to remunerate the work of employees not directly involved in the production process but whose work will anyway affect the throughput efficiency (such as fixers or repairmen, etc.).
  • With the progressive piece rate job prices for the products produced above quota are determined at a higher rate. The said rate is used where non-fulfillment of urgent deliveries may entail huge fines or the sales profits from selling additional products are far higher than the expenses caused by increased job prices.
  • The regressive piece rate is seldom used; job prices for the products produced above quota are determined at a lower rate.
  • Accord wage is intended only to be paid for work performed in a full volume. Most often the said wage will be paid to workers engaged in building, erection, repairing, loading and unloading works.

 Time wage is used in those spheres where the working standards are not required to be established and also for technicians and managers. There are two systems of time wage: the pay-as-you-talk system and the time-bonus system.

 In accordance with the payroll accounting methods time wage:

* May be paid monthly and is calculated on the basis of the flat monthly rates (wages), the scheduled number of working days in a given month and the actual number of days worked;

 stipulates the pay by the day which is calculated on the established daily basic pay and the actual number of days (shifts) worked; or

 * stipulates the pay by the hour calculated on the basis of the pay by the hour and the number of the actually worked hours for the settlement period.

Employees’ work is paid by using the pay by the hour system and (or) on the basis of the monthly tariff rates (wages) specified in the collective employment agreement or contract or established by the employer, while in budgetary organizations and other subsidized organizations whose employees enjoy the same remuneration conditions as employees of budgetary organizations – by the Government of the Republic of Belarus or any agency authorized thereby to do so.

Conditionally speaking, the way a wage is calculated may be presented as a step-by-step process. 

Step One. Payroll accounting

The United Wage Tariff System (hereinafter referred to as “the UWTS”) is the basis for payroll accounting. According to the UWTS every category has its own tariff coefficient which shows how much higher the tariff coefficients of the second and other categories are in comparison with that of the first category.

Accrued wage includes bonuses, rises, fringe benefits, pecuniary aid, overtime premiums, payment for work on public holidays, etc.

The UWTS may not be used at non-governmental enterprises where the employers at their own discretion determine the levels of wages and specify them in employment agreements or labour contracts. 

Step Two. Withholdings and deductions from wages

Withholdings may be carried out only in cases provided for by the laws. They may be obligatory and non-obligatory.

Obligatory withholdings comprise the income and pension taxes, withholdings under enforcement documents, fines and compensations in favour of third persons, withholdings in accordance with the ordinances of tax authorities, etc.

The main tax is the income tax. The size thereof is established by the Tax Code of the Republic of Belarus. The income tax prime rate equals to 12%.

The income tax is subject to standard, social and property-related tax deductions. In respect of all these deductions the size of the tax basis, i.e., the sum on which the income tax is levied, will be reduced upon submitting necessary documents.  

The standard deductions are as follows: if the size of a wage does not exceed 3,350,000 Belarusian roubles a month, 550,000 Belarusian roubles are to be deducted; the sum of 155,000 Belarusian roubles a month is to be deducted if there is a child younger than 18 years old or a dependent person.  

The social tax deductions cover the sums paid for getting the first higher education, or the first specialized secondary education, or the first vocational education; in the amount of not more than 10,000,000 Belarusian roubles paid within the tax period to the insurance companies of the Republic of Belarus as insurance premiums under voluntary life insurance contracts and contracts for supplementary pensions concluded for not less than three years and also under voluntary medical expense policies.

The property-related tax deductions equal to the sums actually paid by the tax payee and his/her family members in need of improved living conditions to build or to buy a detached house or a flat in the territory of the Republic of Belarus, or to repay credits advanced by banks of the Republic of Belarus or loans received from Belarusian organizations and/or Belarusian individual entrepreneurs (inclusive of accrued interest but exclusive of interest paid for default in repay (redemption) of credits and loans and/or default in interest payment on credits and loans), actually spent by them on building or buying a detached house or a flat in the territory of the Republic of Belarus. All the property-related tax deductions are specified in Article 166 of the Tax Code of the Republic of Belarus.

So, the income tax is calculated in the following way: the employer calculates wages, makes certain tax deductions and multiplies the remaining sum by 12%. 

Trade-union dues make 1% of the calculated wage, and pension taxes also amount to 1% thereof. 

Alimony is calculated on the basis of an enforcement document sent to an enterprise by the law enforcement officer. The sum of alimony may be fixed or may be calculated as a sum of interest added on the wage of the employee obliged to pay alimony.

Non-obligatory withholdings include withholdings of spare travel expenses, excess wage sums, deficiency service payments, etc.; they also include deductions made at the request of an employee in connection with the goods bought on credit, insurance premiums under individual insurance agreements, credit deductions, etc.

Step Three. Calculation of net payroll

By deducting all possible deductions from calculated wages, we shall get the sum of net payroll.     

It should be underlined that the current state system of wage guarantees covers as follows:

  • Minimum wage (in the amount of 1,395,000 Belarusian roubles);
  • Tariff rate for the first UWTS category in the public sector (in the amount of 250,000 Belarusian roubles);
  • Republican wage tariffs – hourly and/or monthly tariff rates (wages), on the basis of which wage levels for specific occupational-skill groups of workers employed by organizations, financed from budgetary sources and subsidized by the state, are established;
  • Increased payments for work in non-standard conditions;
  • Measures to support the real wage and to index it;
  • Measures to limit wage withholdings and income taxes;
  • State control over and supervision of the timeliness and size of wages; and

Raising employers’ responsibility for any violation of the collective employment agreements or labour remuneration agreements.

Debt avoidance

Drawing up a balanced family budget and long-term budget planning are the most effective ways to avoid “debt bondage”.

People often simply do not think of managing their finances properly and it appears that the way they housekeep is just “running with the wind”. At best, many of them “adjust” very approximately their revenues and expenses, often for a month and never for a longer time.  Any unexpected circumstances may disbalance the fragile financial equilibrium, while attempts at solving difficulties may lead into a dead end. Impacted by unfavourable life circumstances, people often “get lost in the abyss of debt”.   

Getting rid of any debt is the first step to get financial freedom! It is important to take this first step however difficult it may be. Primarily, define the quantitative and the qualitative structures of your financial “debts”.

Calculating debts

If you dream of becoming a successful investor, keep record of all your debts and liabilities, indicating their sums, creditor names and interest, if any. This information is vitally important. If a person has a great number of small debts, each of such debts seems to be a minor thing, but together they make quite a huge sum of money.

The situation may turn out to be discouraging, but unless you are faced up with the problem of debt bondage, you may not strive to solve it.

Saving up instead of spending

Conventional wisdom holds that one should be content with what one has. That the statement is valid has been proved for centuries and it is not worth ignoring it particularly taking into account that you are in debt.

If you have made your mind to get rid of debt, you are not to spend money on entertainments and trifles. It is also very important for you not to yield to a temptation of buying a thing that you like and have been dreaming of for ages. No exclusions should be admissible. If you indulge your every whim, you will never be able to carry out your get-rid-of-debt plans and will remain a perpetual debtor for your debt will be increasing and the “financial bondage” you are in will aggravate dramatically.

It is often the case that you are unable to control your purchasing desires and wishes you will find yourself in a financial pitfall. Resist any idea of uncontrollable buying because new debts are absolutely unwelcome.  

While economizing on every little thing, you do not only start spending money wisely. You will also gain experience in struggling through difficult situations. It appears that reducing expenses does not really require too much effort. Avoid spending money in the way you usually do and stop buying non-essential items; go to cafés and cinemas less often than you are accustomed to; buy fewer alcoholic drinks and tobacco goods (or you’d better not buy them at all!); instead of purchasing branded items start buying mass-produced things; spend your holidays in less fashionable and luxurious places; cook at home rather than buy semi-prepared food in delicatessen shops, etc. Several more options are available: buying foodstuffs and household utensils by wholesale which is definitely cheaper than buying them otherwise, or buying them in sales or with seasonal discounts.

It is quite probable that buying things like it is described above may be time- and effort-consuming but with afterwards you will get accustomed to it. Moreover, it will make it possible for you to save money for more significant financial projects.

Increasing revenues

Well, this is not an easy thing to do but never stop at what has already been achieved, just go ahead!

The more money is allocated to repay debts, the sooner you will get rid of them. Please remember that you may take any job to this effect, not just the job you have been trained in or educated for. Mind, any job will do. Seeking for a well-paid job that also satisfies you professionally may entail interruptions in getting revenues, which is totally undesirable and should be prevented by all means. As they say, one dollar in your hand beats the promise of two in somebody else's.

Determining the sums of possible expenses

It is expedient that you allocate enough money to cover your essential needs in a from-wage-to-wage period (such as meals, communal services and articles of daily necessity). You should take into account things you will not be able to do without, or plan some important purchases so that they will not become a heavy and an unexpected burden for you to carry in the future. 

Stopping saving up for some time  

Until you are debt-free, saving up for a rainy day is not for you. Moreover, if you have saved some money earlier, you should use it for repaying your debts. If you have a deposit and have been given several credits, you should bear in mind that interest accrued on your credit sums tend to grow far faster than your deposit accruals.

So it may be unwise to deposit money if you still have debts. 

Do not take credits to pay off your old debts

Every new credit will help redeem a “burning” debt but will not free you entirely from debt bondage. Taking credits to pay for debts may be permissible only in some extreme cases. If taking a credit is the only way out, and you cannot repay your debts with at least minimum sums, you will have to take a short-term credit at the credit minimum rate.

Do not forget then to include such credit in your “debt budget” in order to repay it as soon as possible.

Controlling a credit card

A credit card may be a very tricky thing. It may make you heavily indebted, on the one hand. On the other hand, your credit card may serve you as an instrument of getting rid of debts. If you have a low-interest credit card, you may use it to repay more expensive credit debts. 

To successfully get rid out of debts you’d rather completely refrain from using credit cards.

Drawing up a budget

A budget should cover a person’s expenses but should not cover this person’s debts (to this effect a separate budget is to be drawn up). The budget shows the aggregate income, the aggregate expenditure and the aggregate surplus.

It is important to strictly follow the budget. If, drawing up your budget, you happen not to have taken something into account, the budget is likely to get collapsed after two or three payment cycles expire. Your budget therefore must include all possible expenses.

Drawing up a “debt” budget

A standard budget usually shows how much money a person has after paying all his/her expenses; a debt budget on the contrary specifies sums of money necessary to redeem each particular debt.

A standard budget with a surplus should be transferred into a debt budget. The point is that standard budget surpluses are the main sources of debt redemption and thus, the most reliable way for one to become financially free.

List your debts according to interest reduction (i.e., debts with the highest interest accrued on them go first). To redeem debts with the highest interest accrued on them (occupying the very top lines in the list of debts), the largest sum possible should be allocated. Use minimal sums to repay other debts.

The above procedure should be employed until the maximum debt is fully repaid. By applying the described redemption strategy, you will repay the debt listed next. Gradually, all your debts will be paid off. 

Winning in a difficult and rewarding struggle against debt bondage makes a person financially matured. Actually, this is the first and a very significant step towards reaching long-term financial goals.

To parents

What parents should know about their children’s financial literacy

Children go to school to get knowledge in mathematics, languages and history. The only subject not included in the school curriculum but vitally necessary for them to become successful in their lives and careers is to how wisely and responsibly manage their money. Moreover, we want our children to be financially literate and independent and not to repeat financial mistakes we, their parents, have committed.

A natural question arises: when should be children taught money management? The sooner, the better! Children start keeping a close eye on their parents when they are still very young. What is more, they copy their parents’ behaviour and reproduce their parents’ attitude towards different things including money matters. In order for children to learn to reasonably think about money matters their parents should make them clearly understand what money is, how it should be earned and saved. A very reliable way of teaching children how to solve financial problems is to tell them true stories on money in which the main characters are parents themselves, or people known to children, or their relatives or family friends. Personal examples prove to speak louder than anything else, particularly when parents tell their children about their families’ financial statuses or discuss the ways through which these may be improved. 

The process of teaching financial literacy to your children may be both useful and entertaining! For example, you may involve your children in your home banking, supporting the home banking process with examples. Take a clean sheet of paper and write your total family budget in one figure, and afterwards deduct from this figure payments for your flat, telephone, debts and credits, if any. From what is left, deduct expenses on foodstuffs, necessary articles of clothing, and payments for mobile telephones, fares and gasoline for your car. Add some sums for buying presents in case holidays or festive events are approaching.

Experts say that older children may be allowed to do the shopping independently. Give your child pocket money, buy your child a purse to keep the money in, teach your child to spend this money wisely, explain why it is necessary to save up and what may happen if there are no savings at all. Every time you go shopping together with your child, draw his/her attention to the prices of the goods.

The older your child becomes, the less pocket money should be given to him/her. A junior schoolchild should be given pocket money daily, a high schooler should receive pocket money once a week and a senior schoolchild – once a month. Thus, step by step he/she will develop sound habits of financial planning and managing money. Your child’s financial decisions will become more reasonable while your child’s personal responsibility for them will increase. Inculcate in your child a habit for calculating money he/she has collected, earned and spent for a budgetary period and writing the calculated sums in.

After receiving some pocket money many children tend to immediately spend it on some momentary wishes. Parents should make their children understand that the money that is given to them imposes a certain degree of responsibility on them irrespective of their age.  Explain to them that before they make up their minds to buy something they should consider their possibilities and wishes and understand clearly what and how much to buy, or what can be done without. Tell your children that they sell things at different prices in different shops and teach your children to be price-wise – it is cheaper to buy fresh vegetables in the market, while buying cheesecakes for tea in a shop near your house is just what one needs to do.

Let your children choose themselves what to buy, let them pay for what they buy with their own money. Make your children aware of the value and usefulness of different things. Discuss together other possible purchases for the same sum of money. Draw your children’s attention to and raise your children’s interest in really valuable and useful items, letting your children understand why such items are preferable. Carry out a comparative analysis, speak openly and be critical but never blame your children for the purchases they have made. If your children have demonstrated an ability to spend money reasonably and to be thrifty, do not spare words to praise them!

The money that has been given to your children is their property and may be spent at their own will. Nevertheless, you may talk to your children on the ways to manage it: i.e., whether the money will be spent on a new purchase or whether it will be deposited. Though the majority of the “children’s” bank products are aimed at their parents still they are very necessary for raising children’s financial awareness. Banks may issue special children’s cards in addition to their main cards. Every bank has the right to determine the conditions on which it issues paying cards to children. To get an additional paying card for your child address the bank which services your own paying cards. Submit your child’s certificate of birth or passport. Encouraging your child to use a bank card, thoroughly instruct your child on how to safely deal with it.

Parents may of course exert control over transactions conducted by their children with the help of additional paying cards. Information on where, when and how much money was spent by their children may be given in a major bank card account statement, delivered synchronously through SMS-messages or found in the Internet-bank. Besides, parents may limit the sums of money their children may spend (such limits may be daily, weekly or monthly), and specify the terms and methods of paying card use. When a child becomes 14 years old, a major paying card may be issued in the name of the young holder of a personal account. 

Waste of money

Probably many of you had to make financial decisions which you pitied for afterwards. In what way can one make correct decisions related to our finance?

What do thoughtless expenditures mean? What’s your opinion? It can be stated that thoughtless expenditures are errors in planning and distributing monetary funds. In the long run thoughtless expenditures are leading to lack of money, debts, excessive lending burden...

A  main reason of thoughtless expenditures is generally consists in the fact that a financial way of life of a human being does not comply with his virtual mind. Each waste conceals a definite emotional need. Let us say, it may be quite possible that a young man buying a high-priced article wishes in such way «to wipe eyes» to his friends, and a young girl taking on credit а state-of-the art smartphone as a matter of fact wants in such a manner to make herself singular among her herd mates. When effecting such purchase you should comprehend what exactly you want to have in exchange for your money. Probably while buying a thing, which is from its inception beyond your means, you want to accomplish some other psychological objectives. Just think a minute. As a matter of fact it is a self-deception, since nothing in the world is able to meet human emotional needs and improve his state of mind. If one gives thought to a true value of goods and services, which a man is going to acquire, the number of thoughtless expenditures can be reduced many times.

As the practice suggests, thoughtless expenditures (i.e. those for the goods or services which you do not need or useless at all, which you can easily do without ) can be effortlessly found in each family’s budget. The most common of them are outside nutrition (cafe, restaurants), wasteful use of resources, meeting instantaneous moods, purchasing flotsam and jetsam, purchasing excessive clothes or accessories, interest to banks, overpayments, buying salt festive gifts. And what if one counts how much money he/she could have saved monthly by reducing at least some of the above expenditures and multiply a total sum by 12? Be sure an annual saving amount would strongly impress you! Accordingly the situation can be redressed if where possible to cook at home, save electric power, water, gas, as well as not to spend money for idle telephone calls and thereby reduce mobile communication costs, etc. Try to plan each purchase, start effecting purchases according to a list settled beforehand. An annual saving amount will be equal to that which your family is able to make a purse even now for accomplishing your financial objectives.

Try to compare prices at an outlet located close to your house with those at a large supermarket. Mind the difference. Think: where is it more profitable to buy foodstuff?

Psychologically we value things head and shoulders above money. And such situation is taken advantage of by vendors while selling useless things to us. And we have to learn how to combat it! One should be extremely cautious when buying something at sales out or discount sales! Such words as «discount», «sale out», «favourable terms», etc. should not effect your decision to make a purchase. As the practice suggests, the majority of things purchased at a sale-out are very frequently turn to be useless. When effecting a purchase thoroughly think over its necessity. You should not judge by the availability and price for certain goods at a given instant, but think of your actual need therein.

Very often high prices are fixed in places with large a large stream of people, in resort areas, close to a seashore or in the territories of museums and conservation areas. While avoiding purchases at such places one can save up to thirty per cent of his/her budget. Even if you need such thing badly it would be better to buy it later on and at a lower price.

And let us talk of overpayments. Have you noticed that some things in a different season of a year have different value. The closer a day when such thing is to be used the more expensive it is. For instance, if you are going to buy a bicycle, then buying it in late autumn, you’ll pay for it 20–30% less than if you have bought it in spring.

Our ultimate goal is not boring economy, but acquiring a useful habit to spend our money for buying actually important things! Money is saved far easier if one understands the purpose for what he does it. So make it aim and follow it even if your steps are small.

Approach to money

Let us talk of attaining financial soundness and of implementing our own financial freedom. Let us try to clear up what financial freedom means and what one should do in order to dispose his/her finance in a right way.

Currently we are used to address many issues by means of money. All of us are consumers. We require finance for implementing our cherished beliefs and appetences.

Financial freedom is  a sufficient number of monetary funds which make it possible for a human being to feel confident and easy in his/her life.

So, a first thing which is to be done in a way to financial freedom is to assume responsibility for one’s life!  In all thing which happens with us in our life we should search for reasons of them only in ourselves. Manage your life by yourself, this is YOUR life, but not PROPERTY OF ANOTHER! EVERYONE possesses all opportunities to be well-off. You yourself decide what actions are to be done in order to improve your financial standing.

Set goals! Just goals make one to move forward and to objectively conceive money. Having singled definite objectives and conceived their necessity it is easier to make a purse, save money, compute expenditures. If you have a clear objective this will make you to pursue thereof. Irrespective of what you want to acquire — a bicycle, computer or a smartphone — you’ll have them only in the case if you are keen-set for an intended objective. A successive person always knows what he/she wants. One should not go with the tide while thinking that all things are good as they are. He/she should strain after the better. Even if something is not going well never lose heart, but arm yourself with patience and move forward.

Giddyap! Prior to learn managing your finance learn managing yourself. Cultivate your abilities! The availability of money in our life is directly related to the fact what qualities we possess. Circle yourself with people from whom you are going to take lead, learn their experience, try to come to know in what ways they have achieved their success. Get rid of useless habits. Laziness, fear, lack of self-confidence are not in the least your helpmates. Improve such skills as dominance, interpersonal skill, industry, consistency of aim, learn to manage your emotions and your time. Move only forward not looking back.

Say «YES» to new opportunities, and then the opportunities will say «YES» to you! If a person considers that he/she will not grow rich without an assistance from the part of goodly heritage he/she will not earn high money. If one comes to know  life histories of rich people he will be easily convinced that such people at first were not lucky enough. However, they in some way have managed to duck all issues and achieve tangible results in their life. Money means fruits of human activity. So, go ahead!

Learn to treat your money in a right way! One wiseman once stated: «A rich man is not that who earns much money quickly, but that who spends it slowly». Yes, being rich you may be able to afford implementing many of your dearest wishes. BUT, if you spend with a free hand wildly and irrationally you’ll quickly get over to spending much money and will become an abductee of your needs.  Bondage arises when finance starts to control you, not vice versa. A level of your financial freedom is determined not by the fact how much money you have, but by the fact how you can control it (we’ll speak of it later on).

Learn to take money in a right way. One should not go to the extremities. Dreams of wealth should not lead you to extremities. Since your attitude to money plays a most important role in its availability. Decide what money is and that it just for you. Remember that you should learn not only how to borrow money, but also how to pay it back.

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19.11.17 20.11.17
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News

Conference "Financial education in the CIS countries" in Minsk

04.10.2017

Septermber 19-20, 2017 the International conference "Financial education in the CIS countries" took place in Minsk.

Actual information

Methodical recommendations for the preparation for the Olympics on financial literacy!

15.11.2017

The Republican Financial Literacy Olympiad for the pupils at general education institutions takes place in Belarus for the 4th time.

Education videos

Alexandra Gerasimenya talks about bank deposits