English
The purchasing power of Russian residents continues to fall — and this is due not only to problems in the economy, but also to financial illiteracy of the population. So, why is it imperative to learn how to manage your money, and how does it help you in your life?
Financial literacy is a set of knowledge and skills that help you navigate the market and allow you to manage your money. A financially literate person monitors how much they earn and how much they spend, plans their personal budget, and knows how to save and invest.
A financially literate person doesn't get involved in dubious financial pyramid schemes and does not take pay-day loans. They use contemporary banking products and know how to spot risky investments that are contrary to their interests.
In general, financial literacy is not only the key to a successful present and confidence in the future, but also the basis for effective business management. Until a person has learnt to put their household finances in good order, they are unlikely to be able to successfully manage their professional finances too.
Some statistics
According to a 2018 study, the financial literacy index of the Russian population is 12.2 out of 21. By comparison, Norway, one of the most prosperous countries in the world, has an index of 14.6, while in France it reaches 14.9, putting this country at the top of the rating.
Only 20% of the Russian population consider themselves financially literate, and almost half - 40% - do not know how to manage their money.
The most financially literate regions are the Kaliningrad, Kirov, Kostroma and Kursk regions, as well as the Komi Republic.
Learning by topic
How do you become financially literate?
Keep track of your income and expenses
Create a spreadsheet in Excel or a table in a notebook and write down all your incomings and receipts and expenditures. You could also conveniently plan your budget using bespoke mobile applications, for example, Zen Money and CoinKeeper.
Work out your monthly expenditure and what your mandatory payments are: rent, travel, petrol, food, loan repayments, private teacher lessons for your child, your gym membership, and so on. Always remember to write down all money you spend, even impetuous purchases. As a rule, we forget the money we spend and then the money is gone. When you record what you actually spend, the numbers may be shocking at first, but spending control will eventually become the backbone of your financial stability, and simultaneously, unnecessary spending will be reduced.
Increase your earnings first, then start saving
The Internet is full of tips on how to save money, be it on a cup of coffee or a new pair of socks, or promising you how to become a millionaire in 10 years. But the Russian reality is such that the majority of working citizens have nothing to save, and there is no money for daily trips to cafes. Therefore, think about how else you can earn more: ask for a pay rise, change your profession to a more promising one, or monetise your hobby.
It is more profitable and safer to have multiple sources of income: even if you lose your job, you can earn extra money as a freelancer, rent an apartment (if you have one), or receive interest on deposits and income from investments.
Learn how to save money
Learn how to save money to not be afraid of tomorrow. Get into the habit of saving a little from each paycheck. Or find an additional part-time job, start a source of passive income, if possible. Incidentally, many people think about additional earnings at the very moment when a large amount is needed: few people like to take loans, as they will have to be given back, and even with interest.
The minimum financial cushion is considered to be equal to three salaries. It will give you the opportunity to hold out for several months, if you suddenly lose your job or aren't able to work for some reason. The older you are, the more savings you should have. So, it's time to start now!
Spend your time wisely
Time is of the essence and is the only irreplaceable resource, so be smart with it. Successful people never waste their time on things that they are not interested in.
Be yourself and learn to relax. Be natural and good. Keep the company of good friends, and let your hair down. And don't chat behind other people's backs, because it will do you no good - being a gossip has never helped anyone.
Learn
To be a successful person your must know how to quickly adapt to changes in the world. To do this, you must constantly learn: improve your qualifications as a specialist, learn languages, acquire new skills, and hone your existing knowledge. Fortunately, courses are very easy to find, and there you can learn everything from the basics of SMM to personal finance.
To become richer, you also have to learn: read articles in thematic magazines, study the offers of banks that operate in your city. See which companies are listed on the stock exchange and whether it is possible to buy cheap shares right now.
A side effect of education is the development of critical thinking. Check and filter all the information that catches your eye. Don't blindly believe advertisements and articles from the Internet.
Read the contracts carefully
And in general, any documents that require your signature or a check mark next to the items "I have read the terms" or "I agree".
