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How to manage personal finances? A question that worries everyone and everyone. I offer my own - alternative - version of building a personal financial system. Welcome to the discussion under the post!
The other day I reviewed a lot of books on personal finance and was surprised by their similarity. And it so happened that I have been involved in corporate finance for a very large part of my life, so I could not restrain myself from expressing an alternative opinion.
I understand that I can hurt someone's "sacred cows", so please do not get angry and consider that this is just my point of view. And I will be grateful to you for your comments.
The size of the article limits the flight of my writing imagination, but I tried to highlight the main points that you should pay attention to when planning personal finances.
Cost accounting is a tool for financially incompetent people
Which, by the way, is time consuming. All personal finance books recommend keeping track of your expenses. Now for this there is a huge number of various programs, mobile applications and web services. What is the purpose of this process? It is declared that this will help to better understand your expenses, to find hidden sources of additional money for investment. But for some reason it seems to me that most often the accounting of expenses is carried out in order to understand what can be saved on “if something happens”, and also simply for the sake of the process itself - accounting for the sake of accounting, without any purpose.
Also I am sure that this is a tool for those who are not financially successful. Imagine that you have made a million dollars. Does it make sense to keep track of expenses in this case? Does it matter how much Coca-Cola you drank a day and where you had lunch? This will be a waste of your highly valued time, which is better spent building up your financial power.
The second disadvantage of constantly maintaining such records is the loss of a large amount of time. Every day, you need to spend time on such accounting - 5-10-20 minutes. A very decent number of hours runs in a year. Now, if everyone thought about how to increase their income for the same amount of time, then, it seems to me, the result would not be long in coming.