Plan your spending budget, save to invest intelligently, say enough to financial schemes based on loans and installments: if your finances are in crisis, you must change your way of acting.
It happens to many and there is no shame: you can be at a point in your life where your finances are not good, savings are few as few are prospects for the future. Maybe you are 30 years old and the checking account is crying, or you are 40 and you are worried about retirement, the house costs too much, the investments have gone badly, you have some debts.
There is no need to despair but it’s time to make a change in your life and make progress towards a new financial awareness. There are no magic formulas, you have to commit yourself and change your action plans: try starting with these 5 simple tips to improve your personal finances.
Plan your budget
Some will have regular earnings, others may have some more difficulties due to irregular or freelance employment. Whatever the starting situation, budget planning is the key to keeping control of your money. Carefully monitoring income and expenses will allow you to move away from harmful financial behavior, developing a more conscious approach to managing savings.
Beware of installments, subscriptions, loans
Before planning anything else, it is good to examine the purchases made in recent years, understand what funding and loan is still in progress and how long it will take to finish the payments.
Subscriptions are also to be reconsidered: especially in recent years, they have grown exponentially and often there is a tendency to pay for services that are not fully used.
Saving for retirement
Retirement comes sooner than you might think. Now it may seem like madness, yet you have to save for retirement as soon as possible. For those who are a little behind on the roadmap: the time has come to start investing in a pension fund (state and public pensions will probably not be enough).
Usually analysts and independent financial advisors advise setting aside between 10 and 15% of the monthly salary and doing it as soon as it arrives, so as to get rid of the thought and forget about the money set aside. If the monthly budget does not allow it, it is better to proceed in small steps by deciding the percentage of the salary that can be waived, even if it is only 1 or 2%. And if the income increases over time, the amount destined for the pension fund can be increased.
Open an emergency fund
This must be underlined because it is very important: an emergency fund is necessary to face unexpected situations such as a boiler failure, the replacement of the car battery, or any other expenditure that cannot be planned in advance. Ideally an emergency fund should be able to cover expenses for one to six whole months. But even 500 dollars / euros can make the difference for small unexpected mishaps.
Although it may seem like a distant goal to many, it is essential to dive into the world of investments as soon as possible. Inflation also acts on steady savings in current accounts, decreasing their long-term value. For this reason, it may make sense to examine the types of investment best suited to your risk profile and knowledge of the matter, in order to make your savings bear fruit.
Now that adulthood has arrived, just stop, examine your situation and start with these simple bases: financial awareness is around the corner!