Learning how we can manage and keep our personal finances healthy is a matter of habit, discipline, and committed work.
When we reflect and take the necessary actions to change our financial situation, we allow ourselves to implement basic tools, such as saving and investing, that are put into practice in our daily lives.
Do you want to feel capable of managing all your personal finances and achieving your goals?
Keep this short article in mind if you’re going to organize your personal finances and make the best decisions:
1 – Always think about your personal goals
Having good financial planning means opting for different strategies and tools. They are an essential key when addressing different scenarios and situations that arise that affect your personal finances.
Thinking clearly about your goals helps prioritize all the things you need to do and weeds out the negative habits in your daily life. They do not allow you to enjoy the financial freedom that you deserve.
Recognize your starting point and take stock of how you are currently doing financially. A few things to be considered:
“Your assets, your savings, your income, the term of your investment projects according to the return you want, how much capital you have, what debts are pending.”
2 – Saving must have objectives
Put all your savings to work. Do not leave for tomorrow what you can do today.
Saving is a beautiful tool. However, you have to know how to use it to obtain great benefits and generate a return, even if it is minimal.
There are financial institutions or credit repairers that help you channel your savings in the best way. Not only for debt settlement but to invest or have your own business.
3 – Seek financial aid/assistance
“Insist, insist, and never give up” is the motto. Do not wait to be without answers or exits in regards to your financial situation.
Today, there are many institutions and credit repair companies that provide free legal and financial advice.
Once you decide to take the path of guidance and help, they will create a plan adapted to your needs safely and responsibly.
4 – If you do not understand financial terms, do not make decisions lightly
Dedicating time to your finances is a healthy and essential habit of keeping your finances under control. How? Financial education is key so that you can continue to learn more and more information.
You should analyze the investment or saving decision you want to make and look for the options that best suit your financial capacity. That will generate good profitability in the future.
The more informed you are, the clearer you will see the picture of your personal finances. Take 10-15 minutes a day to learn about all the financial methods used in the market.
Also, you have at your disposal information from the best experts in financial advice, online books, audiobooks, articles, financial blogs with just one click from your computer or mobile.
5 – Until you know what to do with your money, keep it in a safe place
The main idea of saving money in a safe place is to avoid those small expenses that can end up generating more debt and a lack of control in your budget.
Spending is elementary, but maintaining discipline and control of your personal finances can be a little more complex and tempting.
Therefore, it is essential that you keep your money, savings, and investments in a safe place where you know that you will not be able to spend it or touch it until you decide what you will invest it in.
The best thing you can do with your money is to have it in a different account than your account for daily expenses.
Always stick to your budget regimen, so you don’t have to take extra money from your investment account. That way, you will have everything safe when you decide to use it.
6 – Evaluate each step you take. Is it closer to your goal or farther away?
Every action generates a reaction. The same goes for our finances. The objectives or goals that we set for ourselves must always be consistent with our execution, both achievable and realistic.
They require much evaluation in terms of risk and sacrifice to get what they are looking for, either in the short, medium, or long term.
Properly plan your personal finances and establish clear objectives that bring you closer to your goals: pay debts, save to invest or buy, take a vacation, study something new, etc.
7 – If you have debts, it is better to find a way to get out of them
Find the best way to get out of debt wisely. Keep in mind that not all debts are the same, nor do we all have the same financial burden.
Some owe money on credit cards, loans, mortgages, or vehicles. The vital thing to do is to get out of personal debt and not let the boat sink.
Savings are a way to solve unforeseen debts wisely. A good rule is to never let debts exceed 30% of our income.
Make a list of debts with the highest and lowest interest, evaluate which payment methods or strategies are best suited to your situation.
Snowball method: Super simple, it consists of eliminating the debt that generates a minor expense, then the one that follows, and so on.
Tsunami: This name is very particular within the world of finance but very assertive. It consists of eliminating the debt that generates more psychological anguish or emotional stress.
First, pay the highest interest rates: Sort all debts according to the interest rate and eliminate those that deliver the highest interest rate.
8 – Use means of control to put order to your personal finances
For BBVA experts, some means will help put personal finances in control and achieve the expected objectives.
Investment means – Destined to give us profitability over time.
Means of Financing – Loans and credits are the primary means to finance our projects and the necessary liquidity.
Means of Income – We highlight our primary source of income (our work) and all those activities that generate a positive balance in our personal finances.
Means of Expenses – Those daily processes to which we have to make a monetary outlay. Spending is necessary to achieve the final goals, but always with awareness.
Remember that all of these means are financial tools within our reach and should not be confused with the strategies we must use to achieve the goal set.
9 – Invest
When deciding to invest our capital, it is always essential to analyze the factors in favor and against.
So, before embarking on the investment adventure, we must analyze how our financial situation is.
Are we debt free? Is there financial capacity to invest? Do we have an emergency fund or trusted ally?
These are questions that we must ask ourselves before making such an important decision for financial health, being entirely sure of our objectives, and for the reasons for making that investment.
Every investment carries risk and requires a lot of preparation and sufficient knowledge before starting. Receiving professional financial advice will help you see the picture much clearer.
They will evaluate your available capital and which financial products are the most appropriate according to your investor profile and financial capacity.
10 – Manage your economy wisely, budgeting everything
The best way to keep tabs on your financial health is by budgeting for everything. And yes, it sounds pretty trite, but it is necessary and vital for managing your money.
This option allows you to live within your means and save enough for the future, achieving the objectives in the established term and consolidating your economy.
Once you’ve established a budget, you can design an income and a spending plan separately.
a) Fixed expenses – These types of expenses must always be on a separate card to be discounted by the financial institution or in an independent account.
b) Unforeseen – Separate a percentage of your earnings so that it is designated solely and exclusively to those expenses that may get out of hand and that may affect your budget.
c) Personal expenses – All expenses related to our tastes, leisure, fun, cravings. We even include the so-called ant expenses of which we must be aware.
d) Put a percentage in savings – The most advisable thing is to have them in a separate account and not on a card. It will help to avoid its use by falling into temptation.