ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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pay your bills first
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pay yourself first
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start saving and investing when you turn 30
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save all the money left over at the end of the month
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Detailed explanation-1: -The very first rule of personal finance says: ‘Pay yourself first’. It simply means that out of your monthly income, a certain percentage has to be saved before it is spent. ‘Income minus savings equal to expenses’ should be the rule and not vice-versa.
Detailed explanation-2: -When you pay yourself first, you pay yourself (usually via automatic savings) before you do any other spending. In other words, you are prioritizing your long-term financial well-being.
Detailed explanation-3: -“Pay yourself first” was a phrase which was first used in a book called The Richest Man in Babylon. But this simple statement has been converted into a profound personal finance rule by Robert Kiyosaki.
Detailed explanation-4: -One of the most quoted rules of happiness is the 50-40-10 rule. This knowledge about happiness states that 50% of our happiness is determined by genetics, 10% by our circumstances and 40% by our internal state of mind. This rule originates from the book “The How Of Happiness” written by Sonja Lyubomirsky.
Detailed explanation-5: -The 50-30-20 rule is a common way to allocate the spending categories in your personal or household budget. The rule targets 50% of your after-tax income toward necessities, 30% toward things you don’t need-but make life a little nicer-and the final 20% toward paying down debt and/or adding to your savings.