For those who have identified with the saying: "that's why I work, the money is mine" or the famous Instagram reel "then I see how I pay, God will provide... because one is a consumer, but a believer." Or, this Christmas you have been swiping your credit card non-stop, as if your bank account were that of billionaire Amancio Ortega, it's time to stop.
A new year begins and a good resolution could be to learn to manage finances, stop spending more than you earn and finally manage to save. “Understanding and managing your finances may sound like a huge challenge, but it is not. Creating an effective budget is a powerful tool that makes it easier to control your money in a simple and practical way,” say the experts at the financial comparator HelpMyCash.com.
A budget is like a detailed map that serves as a guide on your financial journey. No matter how much you earn, the crucial thing is to know where every cent goes, in order to get the most out of your income.
The first thing to do is take a moment to understand your personal financial habits. Take a look at bank, debit and/or credit card statements to identify spending patterns. “By checking, you may realize that you tend to order takeout frequently, or that your daily coffee is more expensive than you think. Being aware of these habits will allow you to have a clearer picture and decide which purchases you can avoid or reduce and which others you cannot,” they add from HelpMyCash.
When you know and have controlled the fixed expenses (meaning mortgage, rent, insurance, transportation, etc.) and essential variables (food, water, electricity), it is time to budget for savings. “Savings are not what we have left over, it is the money that we set aside almost as a fixed amount, and what we have left after adding fixed expenses, essential variables and savings, is the money that we have for entertainment and ant expenses,” specialists emphasize.
You must save for various concepts. The first is to have an emergency fund, plan the purchase of a home or car, or for a vacation. “A budget helps you allocate your resources effectively to achieve your short- and long-term goals,” they add.
An excellent tool to separate expenses and keep expenses at bay and avoid overindulging in whims is to place money in different accounts.
In this sense, analysts highlight the following accounts: the Sabadell Online Account can be ideal for depositing what you want to save. It gives a 6% TIN for the first 3 months and then a 2% TIN for a maximum balance of 20,000 euros. Now, if you want to take advantage of an account to deposit your payroll and earn something, the Santander Online Account gives away up to 400 euros if the payroll is greater than 2,500 euros. Or 300 euros if it is greater than 600 euros.
If what you want is an account to place the money that you plan to use on whims, the N26 account is an attractive option. In addition, it allows you to withdraw money at any ATM for free in euros up to a maximum of three withdrawals per month. Although if it is done in another currency, it will cost only 1.70%, it is a fairly economical operation. In addition, it also rewards savings at 2.26% APR.
Another alternative is the BBVA Commission-Free Online Account. It is free and your Aqua Debit card is one of the safest to use on the Internet, since it does not have printed numbers and its CVV is dynamic, that is, it changes. This means that if the card is stolen, they will not be able to use it to make online purchases, because they will not know the number.
With a well-structured budget, you can identify superfluous expenses and cut them before they become debt. “If you realize that you are spending more than you earn or simply want to save more money, it is the right time to cut unnecessary expenses. This could include eating out less frequently, canceling unused or expendable subscriptions, reducing the phone plan if it is too high,” the specialists indicate.
Creating a budget is just the first step. To be effective, expenses must be tracked throughout the month. You can use budgeting applications or simply keep track of it on an Excel sheet or a piece of paper. Tracking allows you to stay on track and adjust your budget if necessary.
Remember that a good budget doesn't have to be rigid. If income or expenses change, or if you have new financial goals, the budget should be adjusted. The key is to maintain a balance between income and expenses so that money can be managed effectively.
