The lowdown: Learn the basics on how to get good with your money in The Financial Diet summary.
If you’re someone who doesn’t really care about personal finances, then The Financial Diet is the personal finance book for you.
Written by Chelsea Fagan of The Financial Diet YouTube channel, this book will give you all the basics you need to stop being shit at your finances.
And, the truth is, so many young people are fucking horrendous with their money *raises hand*.
We live in a wold that encourages consumption but hardly teaches the basics of finance.
Three of the lessons from the book are:
- The four things to never do…
- Live 50/30/20
- Cook good food for less
Lesson One: The four things you should never do
The four most basic rules that you can follow that will instantly improve your finances are listed in the book. They are:
- Don’t put anything on the credit card that you cannot pay off within a month
- Don’t spend money you don’t have on things which you feel you’ve earned
- Never go a week without checking your bank balance at least twice
- Don’t imagine your savings will just magically appear.
These rules are basic but I can see that if all you did was stick to those four things, your finances would instantly be better. Making a budget is the most important thing you can do with your finances
Lesson Two: Live 50/30/20
When you’re a bit over your finances, you need to complete a spending audit. Find out what you’re spending your money on.
Your aim should be to live 50/30/20 lifestyle.
That means you should have 50% of your income on fixed costs like rent and bills.
30% of your income should be spent on daily living, and variable costs. That can include your groceries or a night out.
Finally, 20% of your income should be saved.
That is easier said than done, but auditing your income and spending is a great place to start.
Lesson Three: Cook good food for less
So many young people are more familiar with local take-out menus and uber eats than they are with good local cooking. However, it doesn’t have to be this way.
You’ll be surprised on how much money you’ll save by eating what is in season, cooking large batches, freezing leftovers, and having a well-stocked pantry.
By well-stocked, I mean buy things that you know you can use time and time again, and now specific ingredients to make one particular recipe.
My Personal Takeaway
I am definitely in the consumption phase when it comes to my finances.
I am improving and am a lot better than I used to be when I was younger, but I will definitely take the 50/30/20 away and start to use that.
Put it into action
Complete a finance audit for your last two weeks. Go over your bank statements for the last two weeks and see what you’re spending your money on, and what you could be cutting out.
You should consider buying this book if…
If you’re a young person who is interested in learning more about how to get a basic grip of your finances, then you should consider reading this book. There isn’t any complicated theories or anything for experienced investors but enough for beginners and those who are a little shitty at balancing their books.
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