The arrival of the new year always implies posing new challenges. In a country like ours, where it is necessary to improve the level of financial education of the population, a good resolution for 2020 is to learn to manage personal finances.
- Not making monthly budgets. Comparing personal or family income and expenses allows us to know the economic reality that we face. The budget will allow you to know what are the concepts that make up those expenses and, if there is any need for adjustment, it will be easier to identify which one can be dispensed with. Failure to do so will raise concerns about unexpected payments.
- Do not build an emergency fund. Having a “cushion” of money is a necessity to be prepared for unforeseen events (broken appliances, a serious illness, theft, etc.). Not having this support will force us to request loans or use a credit card, so the amount to be paid will increase due to interest.
- Make unnecessary purchases. Whims in the supermarket, expenses on clothes that are not necessary, a new smartphone just for having the latest model? These are examples of purchases that can be dispensed with and will allow us to better organize our expenses and adjust to our income.
- Don’t think ahead. Retirement looks a long way off for those just entering the job market. Many do not think about that possibility and are likely to face problems with lower income and several fixed expenses (for health, especially). To avoid this situation, it is convenient to develop a form of savings that allows you to have a good complementary fund and enjoy this stage of life with peace of mind.
- Don’t invest. “Money shouldn’t be standing still.” It is a classic recommendation from specialists: make the savings profitable. It is not an easy task and requires spending time or following the advice of an advisor. It is important to understand the different possibilities (deposits, stock market, investment funds) and their respective degrees of risk, in order to choose the most convenient one and obtain the profits we expect.
- Have only one source of income. Growing professionally in a company full of satisfaction, but it is not advisable to let it become the only family income. The possibility of losing your job or having to assume more expenses is always present. Therefore, it is advisable to see what are the possible niches to obtain extra income. Teaching or an entrepreneurship are some alternatives that could help you get extra money to supplement your main income.
- Abuse of credits. Obtaining a loan to finance yourself is a good idea, as long as it is planned. Using this method as an alternative to pay debts constantly and without control will push us into a spiral of debt from which it will be increasingly difficult to get out.
- Uncontrolled ‘hobbies’. It is normal to have a hobby: collecting something, going to concerts, traveling, etc. However, this does not mean shopping without control. A good practice could be to determine an exclusive annual budget for our “hobbies”, which is in accordance with our economic possibilities. That way we will know that what is spent will not affect other payments and we will enjoy that little whim more.