[Reading experience] 2% rule, pay off 3 million in 3 years

The 2% rule, pay off 3 million in 3 years: the salary can never keep up with the bills, we have changed from a prodigal family to debt management, financial management, found the real quality of life, and can afford to raise six children

The 2% Rule to Get Debt Free Fast: An Innovative Method To Pay Your Loans Off For Good

Author: Alex. Michael, Casey. Michael

Foreword:

Because of the family's business failure, I was chased by card debt and credit for a period of time. Although it is far away from the days of debt, I still feel a little dilapidated when I think of that time.

The current life is not difficult, but it is the real "moonlight family". There is basically nothing left after the monthly income minus expenses, so I have been learning related knowledge about financial management and investment.

The title of the book "The 2% Rule, 3 Million Repayments in 3 Years" is enough to inspire people, not to mention the subtitle is that we have changed from prodigal to debt management, financial management, found the real quality of life, and can afford to raise six children .

I think a lot of people have the same question as me, how did they do it?

The 2% rule, the core concept of this book, the simplest 6 steps

The steps of the 2% method:

1. Keep track of your expenses and income for a month

2. Based on the results of step 1, make your budget baseline

3. For the next month, reduce spending by 2%

4. In the next month, increase your income by 2%

5. "Find the money" from steps 3 and 4 and move toward your financial goals

6. Repeat steps 3-5 every month

 "You may not be able to achieve your goals every month, and that's okay because your goal is simple, it's just 2% better than a month."

1. Establish your budget baseline

1. Accounting. No matter what financial book it is, the first thing that will ask you is to keep accounts, no matter how big or small you need to be or the rough expenses, the purpose is to make you find out where your money goes?

Only by recording the expenditure can we analyze the consumption tendency every month and prescribe the right medicine.

If you like eating out, you can change it from once a week to once every two weeks, or from 500 yuan per customer to 400 yuan, starting from a simple place, and it is possible to implement the plan for a long time.

2. Distribution of income. Set up a name for your own money, whether it is filial piety, household, beauty budget, etc. It is good to set a budget according to the accounting table, and spend the money on the knife edge, so as to avoid unnecessary waste.

 "Frugality isn't about living cheaply, or being an aggressive coupon user, it's about being realistic, being smart, and working to make life better overall, not just looking for cheap."

2. Review non-essential expenses,

1. Check the fixed costs, such as the cost of the fourth unit, whether the mobile phone requires all-you-can-eat, and 20-year insurance. Is it more cost-effective than term insurance?

2. Plan for early shopping, birthday gifts, Christmas gifts (in Taiwan it is New Year's Day gifts), you can buy gifts for a whole year when they are on sale. Clothes can also be bought when the seasons change and saved for next year.

3. Make a food list

Take note of the ingredients at hand, and you can make most of your meals from these basic ingredients

4. Make a list of daily necessities and price details

This will help you get a rough idea of the price of your supplies, and you can buy in bulk when they're on sale, avoiding higher prices when you need them urgently.

 "When it comes to cutting expenses, you'll one day hit a budget floor that's hard to cut, but when it comes to possible incremental revenue, the sky's the limit, really."

3. How to increase income

1. List your own resources, time and energy first, and also list your short-term, medium-term and long-term goals, so that your short-term work will not affect your long-term repayment plan.

The examples in the book start with delivering newspapers and phone books, and having an emergency fund that doesn't add to debt for a little change in life.

Now Taiwan's low-threshold entry industry is delivery and advertising.

2. Sell things online. Start with the old things at home, not only tidy up the house, but also achieve the short-term 2% income goal. You can then invest the money you earn in other online businesses.

3. Accept outsourcing work. If you have a certain level of professionalism, you can try to find related jobs on outsourcing networks.

4. Work on the Internet. Writing a blog can make money. Although it sounds like a myth, in fact, many Internet celebrities and youtuber are constantly emerging, which can also prove that this is an industry that can be invested, but it will cost more when investing in the early stage. time and effort, and also

There is no guarantee that hard work will pay off, but if you persevere, you may have a good return.

after debt settlement

Looking at this couple, because of their longing for a better life, they kept using credit cards and overdrafted their future life. Ironically, the author recalled that those eating out, traveling, and beautiful furniture had long been forgotten, but they were charged for debt. The days are as frightening and suffocating as a pair of hands choking their throats in the middle of the night.

Facing the exhaustion and anxiety of the financial situation, the hardest thing is to be honest with yourself, understand that you can’t afford the life you want, and understand that you can’t afford the promise to your lover, but only with honesty can two people understand each other and work together. .

Because a small life is about to be born, two people who have love are willing to sit down and face the reality and then make a repayment plan. After 3 years, not only will the debt be repaid, but also the further planning of the mortgage repayment plan. Feeling cramped with money, and further in the pursuit of financial freedom, these start with some small changes.

Huge debt pressure can make people overwhelmed. When you go to work and get your salary every day, you can’t enjoy your life. The 2% rule teaches you not to lose heart. Just follow the steps and make a little progress every month, and you will have a chance to get it back. Financial dominance, regain a colorful life.