[Economics] The four pillars of personal finance to improve your money management

[#Steeven.™]

Saving is a habit that is cultivated; There are several methods to do this depending on the amount of income, but it is important to start as soon as possible.

Each month can be an opportunity to improve our personal finances and adopt a plan to avoid over-indebtedness that overwhelms us.

César Coronel, general manager of Defense Debtors Ecuador, reaffirms four essential points to improve the management of the family economy.

 

1. Prepare a monthly budget
It is essential that each person or family group make a budget in which they record all their income and fixed expenses in order to have control of the resources they will have. Having clear figures you could, for example, anticipate the percentage of indebtedness that you could have during the year.

 

2. Moderate the 'ant expenses'
Daily expenses on snacks, coffee, among others, are enemies of the pocket, since they are expenses that we are not aware of because we often have them outside the budget. It is advisable to establish clear limits on the tastes that we can give ourselves to focus our expenses. There, the correct distribution of money can also help you, such as the envelope strategy. Thus, your 'ant expense' could be included in the money destined for fun.

 

3. Avoid going into debt
It is always better to prefer cash payment, but if there is no alternative but to resort to debt, you must be prudent. “You must not get carried away by discounts, because there is always the risk of acquiring a debt that is difficult to pay due to the interest that can be generated. If you are going to use a credit card, try to make the purchase in as few installments as possible and without interest so that it does not become a burden in the future," says the counselor.

 

4. Always save
The pandemic taught us that there are situations that we cannot foresee and that can often cause serious financial problems. Therefore, it is advisable to allocate a percentage of income to savings to create a fund that allows us to be prepared for any eventuality. There are several strategies to save, or you allocate a monthly amount and you must save it rigorously, or you can increase the amount of money for savings monthly.

 

With discipline, planning and commitment, financial health can be improved and therefore the beginning of each month becomes a challenge.

 

https://www.eluniverso.com/noticias/economia/los-cuatro-pilares-de-las-finanzas-personales-para-mejorar-el-manejo-de-tu-dinero-nota/