Saving is one of the most popular purposes New Year's Eve, but it is complicated in certain circumstances. Now that prices have risen notably, it is not only more difficult but also more necessary, which is why we thought it interesting to talk to you about harv eker method, a method that can help to better manage your money.
Harv Eker is behind one of the best selling books: The secrets of the millionaire mind. This millionaire who lost almost everything because he did not know how to handle money well, offers us a simple idea to divide our income and thus save. Find out!
What is the method?
Harv Eker's method is based on a very simple proposal: divide the income into six parts for specific purposes. You can do it using savings accounts or virtual piggy banks that many banks already offer through their applications. Be that as it may, the important thing is to do it systematically according to the following percentages:
50% for basic needs
According to the Harv Eker method, half of your income should go to essential needs such as food, fixed housing expenses or transportation. What happens if we spend more than 50% on these basic needs? You will be wondering. Eker indicates that in the first place you should try to either cut your expenses as far as possible, or get more income. And if it is not possible, cut out of the investment or donation sections that appear later.
10% for savings
It seems little, but that 10% is a safe and real way to save. The key is not to touch the money and save it to face future unforeseen expenses: the purchase of a new car, a refrigerator or a washing machine...
10% for long-term investments
Eker advises allocating another 10% to some asset or financial product that provides us with long-term benefits. The idea is that you never touch this money with the idea that the piggy bank will grow until it becomes a mattress that gives you some financial freedom in the future.
10% for training
It is one of the points on which Eker affects the most. And it is that he emphasizes in his book that training is essential to improve professional skills and advance in the labor market. A necessary investment, in short, to opt for better jobs and therefore higher income.
10% for leisure
It is probably one of the more complicated points. What percentage of your income do you spend on leisure per month? Have you stopped to calculate it? Just do it! Being aware of how you spend your money and analyzing how else you could do it without wasting time enjoying yourself with friends or family is essential.
Going out to dinner, going to the movies, traveling, a Netflix subscription or buying that whim you've wanted for a long time; all are leisure-related expenses. Y leisure is necessaryTherefore, and although it may be tempting to save everything for vacations, Eker advises using the money in this piggy bank regularly and without feeling guilty.
10% to donate
The Harv Eker method recommends allocating 10% of income to charitable purposes, assuming that there is always another person who is in an even more complicated state than yours. However, he also leaves the door open to those who, unlike those like him who earn a lot of money, have a difficult situation to lower this percentage and use it for basic needs.
What do you think of this way of distributing your income? Before starting to apply it, I recommend study your expenses for a few months, writing down the essential expenses in red, those that you dedicate to training in orange and leisure expenses in green, so that you get an idea of what real percentages you move on before starting. Thus, in addition to being aware of where you spend your money, it will be easier for you to adapt those percentages with which Eker proposes you to play to your reality.