Having good management of your personal finances is a fundamental part of having a good quality of life , this reflects good management of income, expenses, savings or investments in a person’s life, if you have good management of resources you will undoubtedly have a better lifestyle.
Steps to learn to manage personal finances
Learning to manage personal finances can be a difficult task, so we share some tips that will make the process easier:
Never spend your money before you have it:
It is essential to have income before generating expenses. The income you receive will be classified into two, on the one hand, there is fixed income , which is made up of the amount of money you receive monthly, possibly from operating activities (salaries), this will be the money you will have for your expenses. savings/investment.
On the other hand, there are extraordinary (variable) income , it is not certain that they will be received every month. Those of this type will be used only for savings and investment activities; they may come from profits other than fixed income, such as the sale of personal items, properties, vehicles, financial activities, among others.
You must know what you owe and what you have:
Most people have monthly expenses that they cannot get rid of. As may be the payments of public or private utility bills , their payment becomes a fixed monthly obligation; it is essential to have an approximate budget of income to pay these obligations.
It is important to prioritize the payment of debts , since they can generate additional value due to interest or added charges derived from these obligations. Being clear about these debts is vital to know how much money you have to use in other activities. However, it is crucial not to accumulate debts and use mechanisms such as the snowball effect to end them in a practical way.
There will be other additional expenses such as food, transportation, housing and entertainment, which it is suggested to keep track of to know how much money is spent on each of them.
Have savings goals and purposes:
It is recommended to save a minimum of 10% of income , however, if the deduction of expenses and obligations from income allows the savings percentage to be higher, it is advisable to do so, this will allow us to achieve our savings goals. At the same time, it is important to consider savings goals according to the interests and needs of each person, for example, savings for vacations, a home, a vehicle, or monthly savings to pay taxes, among others.
The above will be a mechanism that will help you manage your finances, carrying out an analysis of expenses and increasing your savings according to your needs, which will improve the productivity and quality of life of each person over time.
