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“Money is better than poverty, if only for financial reasons.” – Woody AllenImproving your finances is linked to happiness in life for most of us. Though this statement is not absolutely true, however improving your finances thus help you let go off unnecessary pressures in life. Like anything else in life, if you are not in pressing need for money you will be able to take decisions which you are afraid to take because of your dependence on money.The purpose of this article is to share with you few hacks or tips which will definitely help you decrease your dependence on money. I am debt free right now thanks to the tips below I followed. It may or may not work for you. But since these are very generic tips, the chances that it will not work for you are very less. So go ahead.1. Use Cash - The best advice for anyone could be to use cash for all purchases you will make. Don’t use credit while in debt. Debit card is fine unless it’s not associated with your overdraft account. The idea is to never let yourself go beyond what you earn. You will be able to bargain as well while paying via cash. Remember the golden ruleDebt = Expenses > IncomeSavings = Income > Expenses2. Freeze your credit cards - Don’t use credit cards till you are in debt. You will never be able to come out of it. I would rather prefer that you freeze your credit cards. Take a water bowl and put away your credit cards in it and put the bowl in the refrigerator. Sounds do able? I’m sure you will earn plenty of rewards for this one wise action.3. Pay towards savings as your first bill - People who earn through employment generally works in this pattern. We pay taxes on what we earn, pay towards our bills and enjoyments and save whatever we are left with. Isn’t it? Instead, since tax is inevitable I suggest you to save first. Pay towards your savings, for you dream projects first and then spend whatever you are left with. This will automatically reduce your dependence on money. You will learn to live with less money.4. Use Debt-Snowball technique to pay off your loans -Here is a link to my one of the earlier posts about the explanation of the technique.5. Eat at home - This small tip can help you achieve fiscal and physical fitness. Eating at home is good for pocket and heart. Though I don’t mean to become hermit and avoid chances of social interactions. This means bringing to office your own healthy lunch. This simple change can help you save around 2000 dollars a year. Double it up, if you are eating dinner outside as well.6. Lend and Borrow - With the advent e-commerce today, we focus on purchasing everything even when it does not add value to us specially lot of novels. Though, I myself by few classic novels now and then, but lending and borrowing can re-ignite the spirit of sharing with others. No wonder, you might receive from others what you are desperately looking to buy.7. Exercise - Staying healthy can be the best gift you give it to yourself. This one lifestyle change can help you avoid medical bills. Try to exercise at least 4 times a week for 30 minutes.8. Deploy the money workers - We all can’t work for more than 10-12 hours a day but money can. These workers can work 24×365. Use them to help you. These workers never get tired.9. Understand the Magic of compounding - No matter when you get enlightened to attain “financial freedom”, don’t delay it further. Starting to invest early will give you an edge. Remember Warren Buffet again, he started investing at the age of 13! You can’t offset, as much as you want, the power of compounding by investing large sums of money later10 Shut the TV - When you are in deep debt it’s wise to shut off your TV and work to pay-off your debt first. Chances are that by avoiding most of the marketing ads you will help yourself not to buy a trendy gadget once again.11. Cut out Cable TV subscription - Instead of watching anything mindless, chose what you want to watch. Feed your brain things you want it to. It’s easy to go with flow and fall in trap. Better chose consciously what is best for your mind by assessing your situation. You will also save on subscription cost you pay to these companies.12. Go out and make real connections - No matter how silly it sounds, social quotient has become an important to measure to gauge people worthiness. However, I still feel having one genuine real connection is far better than making 500 social connections. No wonder, we are living in age where we prefer to even date online. Making real connections actually helps you overcome unworthiness in life that will actually help you curb consumerism and money spent in filling the void we feel inside.13. Exercise at home - Though many of you will disagree with me for this, but that is perfectly okay. I prefer working out at home. It requires tremendous motivation to exercise everyday on your own which has actually helped me in three ways. One, having improved health, Second, improving my determination towards a goal and third, saving me lots of money on gym subscriptions which we know we never utilize fully.14. Pay debt first and spend rest - After following point 3, I will suggest instead of spending upon yourself try to pay towards your debt first and spend the rest. So now the final order for healthy finances should be pay towards your savings, pay your debts and spend whatever is left.15. Budget is a Savior - No matter how cumbersome it sounds. Making a budget will only take time for the first time. After first budget, it will only require 30 minutes in a month to maintain it. However, the invested time will be worthwhile and will give you a lot in return.16. Track your expenses - I can’t stress enough on much how important tracking your expenses is. It can change your financial life in a matter of few months. For elaborated discussion on its importance you can refer my article One month challenge to track expenses .17. Make savings automatic - We all understand importance of making and keeping commitments. That is why we try hardest not to allow any EMI to be bounced. We can apply same concept to improve our savings. Make your savings transfer auto debit like an EMI and the chances are you will keep the promise and your financial situation will improve.18. Keep a 30-day list - If you have an impulse to buy something you don’t absolutely need, put it on a 30-day list. You can’t buy anything but necessities — everything else goes on the list, with the date that it’s added to the list. When the 30 days are up, you can buy it — but most likely, the strong urge to buy it will be gone, and you can evaluate it more calmly.19. Teach yourself about marketing - You need to train and understand that how in a very subtle way, the advertisements force us to buy things we later repent buying. Understand the principles behind how credit card companies forces us to buy things by pitching in with clever marketing punches. Teach your kids also about it and chances are you will save a lot in the longer run.20. Talk to your spouse about your plans - Chances are very good if you and your spouse are on same boat about lifestyle changes you wish to implement in your life. Let them be aware about your plans, discuss it with them. Make sure you both know what bills have been paid, what your balances are, etc. A weekly meeting of just 20-30 minutes accomplishes that. Communication is key.Embrace life the way it is. Nature has given us free ways also to keep us entertained. It’s not always necessary to spend a lot of money to enjoy life. We need to understand that life is not about buying stuff and get joy out of it for a day or two. We all do this. We buy latest gadgets and try to feel that we have accomplished something great. We feel good that we have given business to credit card companies and others. Few days after the same gadget does not give any new feeling and we seek to some other options. We know this cycle is never ending. Instead find joy in life, with people around you by showing them you value them in your life.

What are the most important things to know about Personal finance?Three rules:Number one, have a plan. Call it a budget, call it a forecast, call it what you will. But, project forward income expenses and make those numbers match. Work to that plan. Have a discipline to operate within that plan. That way you know where your money is going, You know where it is projected to go, you know where it’s coming from. You’re moving forward with certainty.Number two, spend less than you make. These are all, and I apologize what we call B.G.O, Blinding glimpses of the obvious. If you spend less than you make, then you will be happy, less stressed, and have a successful personal finance situation. No matter what the income is, If you’re making $1,000 a month then live on $900. If you're making $10,000 a month then live on $9,500. The habit that most people get into, the challenge that becomes because people don’t have a plan, is that they make $1,000 a month and spend $1,050. The old saying goes, the first rule of holes is, “when you find yourself in one, stop digging.” All too often people in their personal finances are continually digging a deeper and deeper hole. Now, in a parenthetic comment to those starting out.My assumption is that most reading this are younger or just starting out in their career. As you built your personal cost structure, rent, car payments, credit card, travel, food. All the rest of those things that come on, as you graduate college, as you get married, as you start your career and family life. Always go for the cheaper option. Make sure you're setting in place your cost structure to be less than your current income. The temptation is to build a cost income based on projected income, if you do that you’re digging a hole and I’ll refer you back to the first rule of holes.Always make sure you’re spending less than you currently make and not what your projecting to make.Number three, Save and invest for a rainy day. My advice for brand new folks who are starting out, put ten, ten, ten away. Live on 70% of your income. Now most people are horrified when they hear that and think, “I can’t do that.” Well it’s hard to reverse-engineer that into a existing cost structure, I get that. If you’re just starting in a new job, graduating college, entering the commercial work place then you can. Go for the basement apartment rather than the fancy condo. Have the discipline, the emotional discipline to discipline yourself that regard and you will be able to live on 70% of what you currently make. What do you do with the other 30%? You do ten, ten, ten. You have 10% that as long term savings that you never touch. Yes, when you’re twenty something you're not thinking bout retirement, but I guarantee you that you’ll be thankful that you did because those numbers compound significantly over that period of time.The other 10% goes into what I call a medium term saving. Something you are saving for that is purposeful and meaningful. The deposit on a house, furniture, a new car, whatever you want, so you aren’t borrowing money to buy something sooner than you can afford. It’s specific, it's targeted, you’re saving the money to spend on some asset type thing that you want, that you need but, you’re getting the money first.The third 10% is do something charitable. Give it to your church, give it to a charitable organization. Do something charitable with it because that completes you as an individual and gives you satisfaction beyond that which the numbers and money indicates. 10% long range saving, lock it away, don’t look at it. 10% medium term saving for some purposeful event, 10% for charitable giving. Being a net contributor rate than being a net drainer.Now, let me demonstrate to you the power of small amounts of money compounded over time. If you invest a $100 a month, now for some that is a large amount. But if you invest $100 a month, and my guess for most reading this, can invest $100 a month with some rearrangement. You do that when you’re starting at twenty, you do it through you’re sixty five. If you assume that you get return of 10-12 percent which is probably high for now days, but the mathematics works for this regard. You’ve put in forty five years of $100 a month, Forty odd thousand dollars. That’s what you’ve put in, that’s what has come out of your pocket into that long term plan. Over forty five years thats going to compound to over 1.2 million dollars. Do you want 1.2 million dollars once you retire? Then start investing $100 a month.Now interestingly if you start that exact same plan one year later, it’s only going equal about $750,000. You’ve lost almost half a million dollars because you delayed it by a year. Thats the power of compound interest. Thats the power of time working in your behalf. Now $100 a month might be a stretch now but, hopefully in ten years with income growth $100 is petty cash. What I would suggest you do is set it at $100 now. Whatever percentage it is of your income, maybe it is that magical 10%. Scale that savings scheme to your income. When your income is ten times the amount you make now, and it will be if you’re good at what you do. Then that $100 a month becomes $1,000 a month. You do that then the future value of that money is the equivalent of 1.2 million dollars now.I know thats a lot of numbers flying around and I apologize. If you follow the three rules,Number One: Have a budget, work to the budget and have a discipline to the budget.Number Two: Spend less than what you make.Number Three: Invest in a purposeful way.One Long term you don’t touch andone medium term that is purposeful,and one that is an investment to yourself and your soul and the community.If you do that, you will have peace in your life, you will find great success financially and personally, and you will have significant less stress in your life and marriage. You will be in a good, good place personally and financially.

This is a very important question, because as it stands there is expected to be a $30 trillion wealth transfer from Boomers to Millennials over the coming decades - and only 22% of Millennials demonstrate “basic” financial knowledge.However, this particular question is tough to answer in one place because there are many facets to personal finance and managing money to consider.I won’t dive into anything too specific here, but instead I will relay a few of the powerful concepts that I think can be crucial tools in thinking about personal finance and wealth.Time-Value of Money: Money today is worth more than money a year from now - and this effect can compound over time. Why? Because you could have invested it to get more money in the future, or you could have paid off a loan/credit card saving you future expenses.Opportunity Cost: Understanding time-value of money helps you calculate opportunity cost, or what you are potentially “missing” out on when you spend money. Let’s say that instead of spending $2,000 to take a course that will increase your earnings, you take a vacation to Mexico. That’s not just a $2,000 difference in your budget - the cost is actually $2,000, plus the income you could have made during that week of vacation, plus all future additional income that you would have made from furthering your career with the course.Value of Time: Also place an hourly value on your time that relates to what you could be making if you were doing a side hustle or furthering your skills. This works both ways: it makes it easier to get up an hour early if you know you can make money during that time - and conversely, it also makes you realize some things in life are priceless.Risk Tolerance: Know yourself. Understand how much of a risk taker you are, and build your finances around that. I know that even if I take big risks and fail, that I have a great network of people and family to fall back on. I’m lucky in that way, and it helps to fuel my entrepreneurial lifestyle.As a side nugget: Stoics philosophers often contemplated what life would look like if they lost everything. Sounds dramatic, but what a practice like this does is it helps you realize that you’d still survive even in a worst case scenario. This makes it easier to take risks in the meantime.Diversification: This applies to stock market portfolios, but all other assets as well. Many people have their wealth tied up in their house - well what happens if real estate values plunge? Think about where your money is allocated, and spread it around to many assets: equities, bonds, gold, cash, etc. to ensure that it survives and thrives.Side Hustles: One of the most exciting developments of the internet age is that we can work on the side to make extra money in ways never before possible. Even if you are already working full-time, you could put hours towards a side business (affiliate business, e-commerce, etc.), building expertise and thought leadership in an area, or working for extra dollars as a freelancer.We have an infographic here about five online businesses to start in 2017 that may help with ideas for this.Having a side hustle can not only supplement income, but it can also turn into your full-time job or an income stream for years to come.Time Arbitrage: This is my favorite concept - and I think I first heard about it on Sam Altman’s blog. The idea is that everybody wants instant gratification, and as a result very few people are thinking and working for long-term goals.It means there is significant opportunity in playing the long game, and that taking advantage of time arbitrage can have returns far more sizable than any short-term actions.Income vs. Wealth: Understand the difference between income and wealth. A doctor that makes $200k a year may be perceived as “rich”, but if they blow all that money, they may not be wealthy. Likewise, someone that makes $50k can also save and make smart decisions that make them wealthy in the long-term.Funny thing is, there is less of a relationship between income and wealth than one would think.Here’s a chart we published on it about a year ago:Net worth (wealth) is most tied to income in the late 30s, but after that the relationship drops significantly.Market Cycles: Understanding that the markets move in cycles is also crucial. The current bull market (since the 2009 crisis) in stocks is the longest in 100 years - and at the same time, countries like Canada are in credit bubbles (in this case, with real estate).Part of being smart with personal finance is understanding that things move in cycles, and being prepared to face downside (or upside) risks.—-Personal Finance ProjectThis subject is so important, that in the Fall/Winter, Visual Capitalist will be launching The Personal Finance Project, a mini-site using infographics, data visualization, and motion graphic videos to approach the topic of personal finance like never before.We’ll be likely partnering with a major financial institution or bank as a sponsor to ensure it is properly funded, and so that we can make the content as ambitious and engaging as possible!