Your budget: your best ally

August 20, 2014

You’ve heard people say how we Puerto Ricans don’t know how to save money, right? Well, truthfully in most cases, we’re probably not saving as much as we should. This endangers our families’ stability because without savings, we can’t face the tough times, like the loss of a job or the onset of illness. Also, if we’re not saving, we’re posponing reaching our financial goals and dreams.

Now comes the good part: with only a little bit of discipline, we can put our finances in order and fast forward the process of getting exactly where we want to be. We just have to stop running from the word “budget”.

We all need a budget. A budget is the first and maybe even most important step you can take to regain control of your finances. It’s simply a plan detailing what you make and what you spend each month. Being able to see exactly where each hard-earned penny is ending up allows you to plan and make adjustments on how and where you are spending your money. This way you can make sure:

  • you don’t spend more than you make, creating unnecessary debt
  • you can turn part of your earnings into savings
  • you get rid of the anxiety that paying all your bills can create

Making a budget isn’t that hard. You just have to:

  1. break down all your current expenses
  2. assess if spending your money the way you’re doing it right now will allow you to reach your goals and save for the future
  3. make the necessary adjustments, establishing priorities and limits for all those expenses that are not essential

Your goal should be reducing your monthly expenses to 90% of your take-home pay. That way, you can set apart 10% for savings. Of course, the more you save, the better! Think of it as buying yourself some peace.

There’s no better time to take control than right now! Download your Personal Budget Worksheet, which will simplify the process. Then, tell us how it went. Did you realize you were spending more than you make? Were you able to reduce your expenses and feel less stress with your bills? Do you have any savings tricks up your sleeve?