There is no too much money to be saved, as there is no to little money to be saved as well. That said, there is also neither too little nor too much money to be managed.
Below are some of the skilss, which will help you manage your financial needs.
Set Priorities
Basic consumption spending is not flexible.
People must feed and take care of their health and minimum needs of quality of life. Once this aspect has been overcome, it is essential to establish investment priorities, in accordance with the opportunities and capacity available in all respects (availability of resources, indebtedness option, possibilities of alliances and partnerships, etc.).
Trust
Credit is a very important option to support the progress of people. Be honest with the information you provide to the entity that will make the study of your ability to pay.
If possible, use the credit only for projects that generate return, capital increase or strengthening of your productive capacity. Avoid to the maximum use credit for consumption expenses.
Rational Distribute Your Money
Establish the amount of your income that will be used to meet each of your needs and commitments, and have the payment dates coincide with those of your salary to avoid arrears and overruns for default interest. Do not forget that it is always necessary to think about contingencies and contingencies.
Invest
He who sows, gathers. This statement is key for those who make investments of any kind (housing, securities, direct savings or other valuable assets).
Evaluate the opportunity to get out of your investments at the right time or with the greatest appreciation. For example, if you have a property, analyze the possible development that the place may have and do not rule out its sale to use the money in another investment more profitable and equally safe.
Do Not Buy By Impulse
“All purchases must be duly justified.” This phrase of the expert Robert Kiyosaki, in his book, ‘In What Invest’, is applicable not only for the administration of companies, but for the personal management of money.
Any expense must have a minimum of support within the rationality of managing personal finances.
Invest Or Save In Education
All the studies show that the most productive basic savings of a country, a community, a family or a person, is education, understood as the accumulation of knowledge put at the service of progress and development through productive projects.
Allocating resources to enhance production capacity is fundamental in the strategy of successfully managing money on a personal or family level.
Do Not Spend More Than You Win
Although this definition seems simple and logical, it is not necessarily easy to apply, since there are many aspects that hinder the correct handling of money.
It is key to differentiate between spending and investment: the first does not bring an economic return, while the second does, which implies that a person can increase their income by managing their money well. Only when this occurs, it will be possible to increase spending on other issues.
Make A Personal Or Family Budget Of Short And Medium Term
This should include consumption expenses, portion of savings (preferably productive), entertainment, vacations and incidentals.
When the budget is family, individual responsibilities can be assigned, according to the income of each member of the group, either by providing a specific monthly amount of money or by indicating the commitment assumed by each person. For example, public services, payment of credits, leasing, study, food, etc.
Save
The money you receive today is part of what you will have for tomorrow. But keep in mind that there are several ways of saving, and that the most profitable is that of productive savings, that is, that which is done to generate new income, in such a way that not only does it preserve the value of the savings but also increase the capital. Examples: education, housing and valuables.
Do not forget that old age is an unattainable reality. Quote for your pension.
Have Clear The Difference Between Spending And Investment
Expense is that activity that involves the exit of money without return or economic. Some of the expenses produce returns represented in happiness and quality of life, but these should only be done when the general economic circumstances allow it.
Remember that the investment is one whose main objective is to generate profitability (see following recommendation).
Diversify
Make yourself as good as possible. Although the investment is aimed at generating profitability, a bad decision can put you at risk and cause the opposite effect. Do not concentrate your investments in a single option, unless you are just starting the dynamics. Diversifying is a way to reduce exposure to risk.
Do Not Exceed The Debt Limit
Except that the money you borrow is to take advantage of a business that generates good profitability (cost-opportunity), avoid getting into debt. Financial institutions consider that, on average, a person or family should not borrow more than 30 percent of their fixed income, because this can cause an imbalance in their economy and bring problems.
