Which tactics can be used to efficiently manage money?
Among others, the following practices have shown to be effective:
Never spend more than what you earn. It sounds simple. It does not matter how high your income is, if you spend more than what you earn, you will always be in a situation of a deficit, and you won’t be able to save any money. An important practice is to manage money through a budget and stick to it. If you have debts, pay them off as soon as possible. Do not
accumulate them. If you use your credit card, pay the total balance. Interests are generally very high.
Put aside a small quantity every month. Experts recommend saving, at least, 10% of your income. Open a savings account in a bank and establish an automatic system between your
source of monetary provision and your bank, so that every month they transfer that quantity. Thus, you will get used to not “having” the money.
Create a reserve fund for emergencies. Before thinking about the medium and long-term investments, you should establish a reserve for emergencies that covers -at least- six
months of your budget.
Learn about financial investments. Read, take courses, attend seminars, talk to your banker, and do whatever it takes, but educate yourself as early as possible. Be prepared
to have intelligent conversations and make wise decisions
Managing your Money 45
When talking with representatives of insurance companies, brokers, banks or any similar companies. Though the majority of them are ethical and honest people, there are some financial sharks that will not hesitate to take your savings away, if you are not ALERT.
Plan your financial goals. Prepare your personal plan in the same way that you prepare business plans.
Initiate your retirement fund as early as possible. Initiate your contribution to your company’s pension plan or establish an individual investment program exclusively for that purpose.
Do not leave your reserves idle; make them work for you.
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