The one habit that led me not to worry about money anymore

 

I seem to be doing a lot better with money now.

Some people make a lot of money but are always short of money, while others make less but manage to get by pretty well.

I've lived my life without paying much attention to money, putting priorities towards curiosity and experience over saving.

During Covid, finance was very stressful and I realized I need to better manage my finances. 

Come to think of it now, there is just one habit I made sure I stick to that helped me to grow my bank account every month.

It's obvious but so many people including myself just a few years back couldn't do. And I want to share my experience wih you.

End each month with a positive balance

Nothing fancy but it's so true.

Credit cards are the worst thing because it distracts you from making sure you end the month with a positive balance.

The rewards, the cash backs... If you can really control it, then it might be better to make full use of them.

But my bank account is in better shape without using those promotions, rewards, and buy now pay later.

The book, "The Psychology of Money: A Wealth Mindset for a Lifetime of Money Problems.''

was the one that made me realize this.

It's obvious that you should end your month with a positive balance, but so many people don't.

Whatever thing you can't buy now with cash, postpone it period.

The reason why the Japanese are so wealthy

Reuters reported that Japan's net external assets rose to a record 471.3 trillion yen ($3 trillion) in 2023.

As a result, Japan retained its position as the world's top creditor, followed by Germany with 454.8 trillion of net external assets and China with 412.7 trillion yen as of the end of 2023.

Living in Japan, every once in a while, I'm so surprised at how much people save here. They generally live very humble lives, and they work a lot.

I mean A LOT. 

So if you work a lot and earn, while you don't really go on vacations much and you have less spending, of course you'll save.

That definitely results in the whole country having a lot of assets.

It's ok to have a "boring" life.

When I talk to a lot of elder Japanese, they're surprised that I've lived in many countries, and I have a lot of experience that I can share with them.

Many of them tell me that they lived kind of like a routine living in the same place, working the same job, and how they want to relive a more exciting life if they can start over.

But I think it's just that the "grass is greener on the other side."

These people that tell me this have neighbors, friends, and family that have long been in relationships and help each other out when in need.

They've done the same thing and they have trust or credit and respect from the area they're in.

They might think it's boring, but after living and experiencing many things, the ups and downs in life and also finance, happiness doesn't really mean excitement and being rich in money.

It's more about fulfillment and being able to feel good overall everyday, having good relationships, having the ability to solve problems when it comes, and being part of a community.

You might disagree, because I once hopped onto different things for a better and happier life, but now I can say that living a boring life isn't really bad at all. It has this feeling of fulfillment and positivity inside.

Pay yourself 10% to 20% of your income first

So how did I first start off with having a positive balance every month?

I started by lowering my standard of living as much as possible and went for resort work in Japan.

The resort work covered my accomodation and food, and gave me a restaurant job that doesn't require a specific skill or certificate.

I took the teaching from the best-seller book ,"Lessons from the Richest Man in Babylon'' to save 10% of my income and deduct that amount on a different account the moment it's deposited as my monthly pay.

Then I have the rest to use for that month.

Since I work in the resort and don't have much money to spend, I'll usually end the month positive. Then I will save half, and the other to use freely on whatever I want.

Being wealthy and income rich is different.

Even if you earn a lot and am cash rich, it doesn't mean you're wealthy.

Say person A earns 10,000 USD/month, if you use 11,000 USD/month, you're losing money.

Say person B earns only 1,000 USD a month, if you only spend 900 USD, you've saved 10% of your income and ended the month positive of 100 USD.

If it continues for one year, the first person will have lost 12,000 USD already,

while the second person has saved 1,200 USD.

The wealthy person is measured by how much wealth he or she has. So the wealthier person is actually person B.

The result of saving 10% of my income

I've had a better but more stressful job before.

I made a lot more before but struggled to save.

But working in the resorts, I managed to save 700,000JPY in a year which is around 5,000USD while being able to visit different areas of Japan every few months.

5,000USD won't do me much. But if I can continue this for years to come, then it will compound quite a lot.

And that's probably how the Japanese people around me save quite a lot.

After saving, I decided to put a portion to investment.

In the next post I want to write how much and what I invest my money on.

Follow me for more posts on finance

Hi, my name is Ryu Aomi. 

My grandfather worked in the tax office, and my father works as a financial advisor, so I've grown up in a family talking about finance.

Covid led me to pay more attention to my finance and to fund what I love to do, and I want to take note and share what I experienced and learned about finance in this blog.

Follow me, comment, or send me a DM even and I'd love to connect with people that read my posts:)