Tired of running out of money? Learn how to manage your finances in three steps—no matter how much you earn—so that your money lasts more.
It happens every end of the month: you have to stretch your dollar to be able to manage until the next payday, and you don’t know where your check went. Do you identify with this situation? If your answer is yes, we have good news for you: it’s never too late to start effectively managing your money and avoid going broke. Remember, your decisions today will prepare you for the future, which will arrive sooner than you can imagine. Follow these tips so you can control your personal finances.
- Analyze your income and expenses: Successful financial management begins by establishing a budget. Make a list of every monthly fixed expenses, such as rent, phone, car, credit cards, and transportation services, like the bus, the train, Uber, and such. Next, think about your flexible expenses, such as gas, AutoExpreso tolls, food, and personal care items. Now, subtract your fixed and flexible expenses from your income. The money that’s left is your available amount for monthly spending.
- Force yourself to save: Surely you must be thinking: how will I be able to save if there’s almost nothing left of my check? Financial experts recommend that 20% of the money that’s left after deducting your fixed and flexible expenses should be saved. It doesn’t matter if what’s left is $10 or $800, you should develop the habit of saving —put it aside and don’t touch it. Emergencies may show up at any moment, and you will need your “safety net” to overcome them; even more so with the economic problems the Island is going through. If you don’t have a savings account, open one and make a commitment to save up. Besides, think about your future in 20, 30, or 40 years: it’s better to get used to saving now, so that you are able to enjoy a nice retirement.
Every day it’s more important for young people to value money. A recent study conducted by Moneyfacts shows that 37% of Millennials prefer to spend and enjoy their money down to the last penny before saving or investing in their future. Don’t be one of them!
- Cut costs and look for offers: Analyze where you can start saving. Some examples include bringing lunch to work or school, or waking up early and preparing your own cup of coffee or tea at home (add up all the money spent at the store or bakery—your jaw will drop!) You can also search for a more economical cell phone plan, a gas station app that tells you where to buy cheaper gas in your area, or subscribe to coupons and offers pages to get discounts on everything you might need, from restaurants, beauty salons, barber shops, mechanic workshops, and hotels around the Island, and even gym memberships, kickboxing lessons, or tattoo parlors.
Developing the habit of managing your finances might be worrisome at the beginning, but once you’re on your way, you’ll see how your life becomes easier and free of economic worries.