At SmartMoney360, we believe that small changes can lead to big results in personal finance. That’s why, in our financial education program, Saber de Guita, we share practical tips to help you take control of your finances. Start today!
1. Create a budget and plan your expenses
The first step toward healthy finances is having a budget. You can break down your expenses monthly or annually to determine how much you need to cover your needs and how much room you have left to meet your goals.
A clear budget will allow you to consciously decide how to manage your money.
2. Save with the 50/30/20 rule
A classic formula for organizing your finances is the 50/30/20 rule:
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50% of your income to cover fixed expenses such as rent, utilities, or transportation.
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30% for recreation, such as outings, hobbies, or entertainment.
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20% to save or invest, thinking about future goals.
If you can’t meet these percentages at first, don’t worry. Gradually adjust by reducing leisure spending and increasing savings until you find a balance.
3. Pay off debts and plan your debt capacity
If you have debt, it’s essential to determine how much you can allocate each month to paying your installments without compromising your financial well-being. Avoid accumulating compound interest on your debts and plan for their repayment along with your monthly budget. Good planning will help you break out of the debt cycle more quickly.
4. Say goodbye to impulse purchases
Impulse purchases (or the famous “consumer spending”) can be your finances’ worst enemy. Before buying something on impulse, consider whether you really need it and where the money will come from to cover it. Remember: a conscious purchase always has a financial backing.
5. Use credit responsibly
Credit can be a useful tool, but it’s essential to manage it carefully. Use it only for specific purposes and make sure the installments don’t exceed your repayment capacity. Also, always check the associated interest rates before committing.
6. Multiply your savings
Making your money work for you is key. Put your savings into interest-bearing accounts, like those offered by Personal Pay, where you’ll earn daily returns without fees or restrictions. Plus, you’ll maintain liquidity so you can use your money whenever you need it.
