How you should be spending your money
Personal finances are all about learning the moves around your money but also there is a large efficiency component on how to invest it and avoiding future problems. Even though we would love to escape from a world where a large part of our lives is defined by the capacity to afford things, the truth is that we rely on money to survive.
Having a monthly salary or getting paid by the hour to subsist does not mean that you know how to manage your finances. Or your money. It might be that part of your income is leaving your account because you are spending money without any self-control. That is why it is so important to learn the basics of creating a budget.
We can’t stress enough about the importance of having a budget since it isn’t a whim. Once you start doing it you will have a better understanding of how your money is moving and you will make better decisions, thinking about the long run and avoiding emotional spending. However, not everybody is going through the same economical reality and the budget should adjust to each person’s lifestyle, which includes the monthly earnings.
Your budget should be divided into three categories andby using UNIDOS’ tool, you will be able to calculate the percentage that you need for each one, according to your annual income:
Are all the expenses that we can’t avoid, that are needed to survive. In this category, you should think about food, health, housing. Rent is something that you have to pay monthly to have a roof over your head or groceries are things that requires a part of your money, without any discussion.
It is important to have savings available. Your monthly statement shouldn’t have more expenses than earnings and even if you would love to buy many things, the best thing to do is to allocate a percentage of the money that you make into a savings account. You can have long-term goals to buy more expensive goods. But always keeps in mind that you must have enough money saved to face any random situation.
Not everything in life must be about fulfilling obligations and part of the reason why personal finance management exists is to have access to all those things you would live to have without going broke. It is useless to earn money without splurging a little bit. However, this shouldn’t be an impulsive action, it must have a reason behind it, and it should be planned ahead. If each month you decide to spend 50 dollars on video games, you have to stick to that number.
This tool that UNIDOS has for you will help you to break down how to use your money smartly and through a future mindset so personal finance becomes something effective.