10 Tips to Improve Your Finances (And Do It at the End of the Month)

Financial education remains an unresolved issue in Spain. Over the past few years, we have witnessed many events that remind us that learn to manage our money More effective.

From financial scandals like preferred stock, IRPH and abuse clauses, to a lack of knowledge Basic financial productswe face difficulties that affect our economy in the short and long term.

experts pointed out Many adults in Spain don’t know how to manage their money properly They also don’t understand the product they’re contracting for. While this is not a complicated task, a lack of knowledge can lead to personal financial difficulties.

Furthermore, if adults do not have adequate financial management knowledge, it will be difficult for them to pass these skills on to their children, perpetuating the cycle of financial ignorance. financial education.

Financial education remains an unresolved issue in Spain.

How to manage money?

  1. track charges: Regularly recording how much money we spend and how it helps us better understand the domestic economy. By analyzing expenses, we can identify which items are costing too much money, identify what is expendable, and develop a budget and strategy to save even more.tools in one free mobile app They make it easier to track expenses on the spot.
  2. Don’t spend more than you earn: Creating a budget allows us to control expenses and avoid debt.Preserving credit for specific situations is critical not often rely on loans or credit card to pay for everyday expenses.
  3. avoid excessive debt: We must remember a golden rule: Do not spend more than 35% of your income on debt, including mortgages, credit cards, and loans. Although it is currently difficult to maintain this ratio due to high housing costs, efforts must be made not to exceed it. If we were paying rent instead of a mortgage, that number should be reduced to 15% or 20%. In this way, we can ensure that we can meet our obligations and have some leeway in the event of unforeseen events.
  4. set savings goals: Keeping a certain amount of money each month, no matter how small, will help us build a financial buffer that allows us to deal with unforeseen events or achieve goals, such as buying a car. 50/20/30 rule Here’s a helpful guideline: spend 50% of your income on basic expenses (rent, supplies, food), 30% on consumables, and the remaining 20% ​​on savings.
  5. Save at the beginning of the month: Saving money at the beginning of the month rather than waiting until the end of the month can increase the likelihood of staying consistent and achieving your goals. Separating the money we save from other money can help us not spend it and gain a better sense of how much we have available to cover expenses for the month.To facilitate this process, automatic transfers can be scheduled saving account at the beginning of each month.
  6. think ahead: When managing personal finances, we should not only focus on making ends meet, but also develop long-term goals. saving for retirement is an obvious example. Starting early will allow us to accumulate more money through compound interest. The earlier we start saving, the less effort is required to reach the same final balance, as we not only get a return on our money, but also the interest it accrues.
  7. Utilize our bank’s mobile application: While many customers don’t know it, a bank’s mobile app can be a useful tool.Many of these include features such as fee classifiers, which allow us to Visualize our monthly spend with forecasts and graphs. In addition, notifications can be activated to update collected receipts. Some banks also offer savings features, such as rounding up purchases and saving the difference, or setting up automatic transfers to a savings account.
  8. understand the risks: One of the biggest mistakes we can make when managing money is to enter into financial products that we do not understand and do not understand the risks of. This applies to financing products and investment products. No.or we have to sign any contract we don’t fully understand. In any case, the basic financial products are relatively easy to understand. Although facing the fine print of a contract can be intimidating, it is enough to understand some basic concepts (commission, interest, APR, term, amount, etc.) in order to be able to operate in a sensible manner.
  9. Check our account statement regularly: Reviewing a statement of account once or twice a month gives us an idea of ​​our finances, the bills we’ve paid, and Detect any charges we don’t recognizefraudulent or incorrect commissions.
  10. Comparison before hiring: If we want to be smart consumers, Pay less, get better terms, it is critical to compare before entering into any service or product contract. Be it phone bills, electricity bills, bank commissions, loan interest or deposit profitability.

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