In recent months, the financial sector has become the subject of many negative stories. Home prices are falling and lending is being reduced. All of this seems to point towards the end of a false economic boom. The rapid economic corrections will not be surprising, however, due to its thin foundation.
When people hear the number trillions, it can be hard to comprehend. The debt is made up of personal loans from millions of people.
To gauge where you stand at the start of your journey, you can use Robert Kiyosaki’s rules for how you score on the money-management and investing scales.
Money management level 1: If you wish for things to turn out well, or don’t understand your finances, then you are at this stage.
It is important to know how much money you have on hand. It is important to know the amount of money that you have in your possession at any given time.
You should first familiarize yourself with the local currency, and its exchange rate. This is how you calculate prices at home. Keep a mental list of the equivalents between the two currencies. You will need to adjust to the new currency, but you’ll reap the benefits in time.
Prioritizing your expenditures is the next step. You should prioritize your expenses based on what you really need, not what you want. Rent and bills should be paid first. This way, whatever happens, you can rest assured that your roof will always remain intact.
Money management level 2. This level is likely to be reached if you save regularly in a low risk, low return account. You can then use the money to make a purchase. You will be back to where you were before. Most people prefer to use debit or cash cards.
The third level of money management is when you can contribute to the pension plan at your workplace. However, you may not be financially literate and will be unable to read financial statements, balance sheets, or annual reports. It’s better to leave these decisions to professionals. After hearing about stock market crashes, you may be hesitant to invest in stocks yourself. It may seem that everything is fine, but it’s not.
It is easy to find a job as a part-timer at the location where you are studying abroad. You can earn extra money while studying. Bartenders, retail workers, and copywriters have flexible working hours. They are also good ways to meet people in your study location.
Many universities have programs that are specifically designed for international students. You can get a job in the university (library, campus or administrative tasks). The job won’t be very lucrative, but it will help you to keep up with your studies.
You will need to have invested in education before you can participate in the money management level 4. It’s possible that you have also worked with a financial advisor. You should learn about investing as soon as possible and eliminate bad debts.
The fifth level of money management is where investors are more aggressive. They know their investing principles and are well versed in tax laws.
Take some time over the weekend to figure out which level you’re at and devise a plan to move up.
