Sometimes, to detect the origin of economic problems, you have to go back to basics, and that is exactly what we will do today. If after reviewing your economy, you can only lament how bad it is, then it’s time for you to go back to basics too. And we are here to help you! Read this post to find basic personal finance tips that will definitely improve your pocket .
1. Learn
Dedicate a few hours a week to inform yourself and learn about financial education . It may seem boring at first, but doing so will allow you to manage your financial resources more consciously, responsibly, and assertively . Among other things, you will learn how to save for a goal, how and why to assume debts and how to take advantage of your financial products; for example, bank accounts or credit cards.
The important thing is that by reading content on financial education you lay the foundation for a healthy personal economy and empower yourself with all the resources you have and could access.
2. Set financial goals
In many cases, financial goals help meet personal goals. Therefore, one of the most basic tips we can give you is to start considering these types of objectives. What do you want to achieve? How can you achieve it? Do you need money to fulfill that dream? This is how you will find the path you must follow to improve your quality of life and fulfill everything you set out to do .
3. Plan and save
The elixir for healthy finances is savings , which is why we have talked about it over and over again in other posts . According to Ipsos, a firm specializing in market studies, after the unexpected arrival of the pandemic, 78% of Ecuadorians recognized that saving is a priority and we already know why. Review your budget, update your expenses, make decisions and start planning and scheduling your savings . In the medium/long term you will have a safe source of extra money that you can use to meet goals or face emergencies.
4. Manage your debts well
Debts can improve your quality of life or sink your economy. Therefore, good management of them is extremely important to heal your finances and meet your goals without frustration . Before accepting or requesting a new debt , make sure that your debt capacity allows it , choose a payment method to get out of other previous outstanding accounts and make sure that the amortization table adapts to the reality of your finances.
In addition to taking advantage of the benefits of a healthy debt, your credit history will grow with a good score.
5. Spend wisely
We understand that spending on what you love can lead to guilt or that sometimes you may overindulge without even realizing it. For your peace of mind, we are going to change this right now with a technique called conscious spending . To do this, you must categorize your expenses, automate your payments, reserve a percentage of your income for those personal treats and, finally, follow up on your money entry and exit record from time to time.
This method will make you feel more satisfied with your money and you will handle personal purchases much better , without going overboard but without depriving yourself of anything.
6. Anticipate the unexpected
“Better safe than sorry” is one of the many lessons learned early in life. What if! A basic piece of personal finance advice is to anticipate the unforeseen because they are the ones that, in just a few days, can totally dent your economy . To do this, it is recommended that little by little you begin to build an emergency fund that allows you to face an illness or the sudden loss of work. Thanks to this fund, you shield your finances without running the risk of being absurdly indebted or losing your assets to settle those debts.
7. Use your credit cards wisely
Cards are a great financial resource if they are harnessed and used well. Take advantage of your credit cards for those purchases with a debt in the medium or long term, for example, when you get some furniture for the home. Try to look at the number of deferred installments and the corresponding value and make sure that your personal finances allow you to assume that debt each month. On the other hand, we also advise you to learn to read the account statement, so that you understand each of the concepts that are detailed there.
Wanda B. Hewlett
Wanda B. Hewlett (Contributor) is a freelance writer from the UK. When she’s not busy writing she loves to spend her time traveling, exploring and running.