Your complete step-by-step guide to free yourself from salary pressure
A Comprehensive Step-by-Step Guide to Breaking Free from Paycheck-to-Paycheck Living
Are you tired of waiting for the end of the month just to breathe financially?
1. Start Here: Know Where Your Money Goes!
- Without knowing the path of your money, you won't know how to change your life.
- Write down every expense, no matter how small, for a full month.
- The numbers reveal hidden habits, and when you see them clearly, change becomes possible.
- Example: A daily coffee for 1.2 Riyals = 36 Riyals per month!
- 2. Step Two: Create a Smart Budget with Clear Goals!
- Know why every riyal was spent.
- Allocate your spending according to your priorities:
- 50% for basic needs.
- 30% for wants and entertainment.
- 20% for saving and investing.
- The 50/30/20 rule works because it gives you control without deprivation.
3. Step Three: Get Rid of Debt to Get Rid of Fear!
- Use the Avalanche method: pay off the loans with the highest interest first.
- Keep paying the minimum on the rest of your debts.
- Focus on one debt, finish it, then move on to the next.
- Source: Nerdwallet - trusted tips for debt management.
4. Step Four: Don't Wait Until You Have a Large Amount, Start Now!
- Open a High Yield Savings Account.
- Transfer a fixed monthly amount, no matter how small.
- Consistency is the key: a little bit consistently is better than a lot intermittently.
5. Step Five: Make Your Money Work for You!
- Invest in long-term assets: such as stocks or Exchange-Traded Funds (ETFs).
- Investing is the fastest way to build wealth in the long run.
6. Step Six: Develop Your Skills = Increase Your Income!
- Learn a new skill or improve the ones you have.
- Every additional skill opens a new door for income or a promotion opportunity. Source: Harvard Business Review - Investing in yourself is the highest-return investment.