The goal of a „Financial Cleanse“ is to improve one’s budget, cancel unnecessary subscriptions and discover savings potential within 30 days.
The „Financial Cleanse“ is a TikTok challenge that is primarily aimed at younger people. Generally speaking, this is referred to as Generation Z. These are young people born between 1995 and 2010. It is not uncommon for people of this age to run up debts. Loans and cell phone contracts can be conveniently concluded online. The proactive approach is designed to teach young people to recognize and avoid unnecessary spending.
Young people are increasingly talking about their finances. There are various ways to clean up their own finances. At the same time, savings tips have spread that are composed of half-truths and even pose a danger. In this regard, further explanations follow to inform and raise awareness about the topic.
Approach to the „Financial Cleanse“ – in 30 days to success
In the TikTok Challenge, young people try to improve their financial situation within 30 days. The TikTok Challenge starts with the „Bucket Budget.“ Young people are asked to write down all their fixed monthly costs. These can be cell phone contracts, subscriptions to fitness clubs or memberships in clubs that put a strain on the budget every month. Along with this, the costs are divided into different time periods, namely annual one-time payments and recurring payments that one makes monthly. This is because it is not uncommon for there to be hidden costs that are debited once a year. These should be included as well as the monthly fixed costs in order to determine realistic values.
As soon as the total costs are determined, it goes to categorize the costs. There are variable costs on the one hand and fixed costs on the other. In addition, one should include a savings rate. The variable costs are expenses that fluctuate. In this regard, it may be costs incurred when going to the movies or shopping in the city. Variable costs are related to one’s lifestyle. Fixed costs include all costs that are binding and cannot be varied. Whether rent payment, cell phone contract or car insurance, certain costs must be paid at regular intervals. Finally, it is advisable to set a savings rate. After all, it is just as important to build up reserves in order to be prepared for unforeseeable situations.
Finally, the monthly expenses are deducted from the monthly income. The difference that remains is the amount that can be used freely. Based on this, it is possible to make changes and optimizations to get a grip on finances. In this regard, memberships or insurances can be cancelled to reduce the cost burden. The financial plan can ultimately be customized, depending on personal preferences. On the one hand, a monthly plan can be devised to achieve a high savings rate. On the other hand, financial resources can be planned ostensibly for leisure activities.
Financial Cleanse: Dangerous Half-Truths – Rich in 30 Days
Unfortunately, there are supposed tips that pose a risk. Videos are posted where young people pose with expensive cars. Along with this, young people are encouraged to buy dubious securities and much more. Unrealistic promises are made that have nothing to do with reality. Consequently, it is significant to question the advice. It is basically not possible to make a lot of money with a small investment. Providers who make unrealistic promises should be categorically avoided.
Financial Cleanse is ostensibly about managing your finances responsibly. It is about important skills to learn the right way to handle money. Thus, it is less about making money as quickly as possible. A critical basic attitude is therefore appropriate in order to recognize dubious offers as such. Savings should under no circumstances be invested in financial investments about which one knows nothing. The principle „knowledge is power“ applies here. Young people should understand and be able to comprehend their own course of action in order to avoid complications or loss of money.
Tools for financial cleanup
In the past, various tools have been established to manage one’s money efficiently. Among others, the 80-30-20 rule enjoys great popularity. This is because the rule is simple to implement and extremely efficient in everyday practice. Even young people with little experience can integrate the 80-30-20 rule into their daily routine. With the 80-30-20 rule, 50% of the salary is budgeted for fixed costs. 30% of the money is used for leisure activities. This can be a trip to the cinema or a city break. The remaining 20% is used to build up assets. The rule thus serves to build up assets. However, it is also an ideal tool when it comes to financial cleanse.
Digitalization has opened up new ways of managing and saving money. Various developers have established themselves on the market who have designed savings apps. These allow all details to be entered digitally, eliminating the need for tedious writing down. In addition, depending on the software, the apps perform automatic analyses to find weaknesses. With this, income and expenses can be managed in an innovative way. There are free software that offer a solid basic function. For more sophisticated needs, paid products can be purchased that offer complex financial analysis.
Another important aid for everyday life relates to purchasing behavior. Often, impulse purchases lead to spending significantly higher than planned. The reason: When buying, happiness hormones are released, which lead to a short-term high. If one gives in to the impulse again and again, this can lead in the worst case into the debt spiral. This can be accompanied – in extreme cases of hardship – by a shopping addiction. It is therefore advisable not to listen to one’s own impulses. Ideally, one considers over a longer period of time whether one needs a certain product. Often, the impulses subside and you realize that you don’t need the product.
Conclusion: What is a „Financial Cleanse“? Explanation, meaning, definition
Considering the many risks that lead to the debt spiral, the „Financial Cleanse“ has a central role. Young people lack essential experience to realistically assess the dangers. Thanks to the TikTok Challenge, young people have the opportunity to develop a sense of income and expenditure. It strengthens the sense of responsibility. At the same time, a differentiated view is of elementary importance. After all, not all tips are suitable for everyday use and are even risky. That’s why you should always check the extent to which the savings tips are tried and tested and of reputable origin.