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How to manage money in 5 lessons

Managing the money correctly is essential to enjoy good health in the family economy . Failing to do so means losing control of finances, ignoring daily money leaks and, in most cases, living beyond your means. This situation is unsustainable in the long term and can only lead to problems.

To avoid this, it is necessary to maintain a strict control of the domestic economy . If you still do not do it, you should start as soon as possible. Although there are endless ways to manage money, then we will share with you those that we believe are most effective.

5 ways to manage money

  1. Organize your savings plan.

In general, Spaniards do not save. And those who achieve it, save little. Most people receive income, spend and, if they have something left over, that is what they save. This way of saving is wrong and does not give good results.

It is more than proven that the best formula to save is what many call the “pre-savings” . In other words, save at the beginning of the month , that is, just enter the payroll. Do you enter 1,500 euros on the 1st of each month? Then order a 20% transfer to a savings account and forget about that money. Consider saving as the most important “expense” of the month.

  1. Control every euro that comes out of your pocket.

If you want to manage your money correctly, you have to control the leaks . We recommend that you use a small physical agenda to record each and every one of your daily expenses , however small and insignificant they may seem. Remember that one coffee per day at the bar , are more than 400 euros a year.

You can also use mobile expense management applications , such as Spendee . These are very useful because they allow you to create several categories, include each expense in the corresponding category and obtain statistics of segmented expenses.

  1. Pay cash whenever you can.

You must avoid financing . If you can not pay a certain product in cash, maybe it’s because you can not really afford it. People tend to bring money from the future (debt) to pay for things of the present. It is much smarter to save in the present to buy in the future. It is also cheaper, since you avoid paying interest, and avoid problems and headaches.

  1. Do not depend economically only on a third party.

Relying on a single salary paid by a third party is usual. However, it is tremendously dangerous. What if one day you decide to dispense with your services? What if the company closes? What if they reduce your salary? You must have several sources of income and go increase the number progressively, as you can.

In other words, it is better to enter 2,000 euros per month from four different sources (500 euros per payer) than from one single source. If you lose one of the four payers, you will only stop paying 500 euros. But if you only have a single payer, the problem is obvious.

  1. Increase your knowledge

If you want to properly manage your assets, you have to learn economics. To achieve this, read books, attend talks, listen to podcasts, interact with people who contribute, read blogs … You have to increase your knowledge if you want to learn to make good decisions. Do not delegate that responsibility to an advisor. Be yourself who makes the big decisions.

If you put these five lessons into practice, you will manage your money in a much more efficient way. Get your batteries started, start as soon as possible and tell us your advances!