9 steps to make a budget that is effective

Making Count helps to take control of your personal finances, so this time we want to give you some tips to make them work for you.

How often do you balance your personal finances? We begin with this question because we know that many people do not do the judicious task of finding out at least every year, what they have, what they owe, what they need and what they have achieved. And it is not that they do not want to do it, rather it is that they have never had the habit or rather they usually believe that if they do they become squared with money and with it even stingy.

However, this is nothing more than a myth, because if you are organized and plan in a concrete way the management of your finances will not achieve more than good results, for example, to fulfill your objectives, save a good amount of money a year or Invest in something that generates good returns.

Moreover, if you are clear with money, you will never be over in debt, with losses of wealth or in need of silver, on the contrary, you will get your wealth to take a giant step and be successful.

At first, it can be difficult, but if you have discipline you will achieve it. The budget is nothing more than a way to classify your money in income and expenses and then make decisions about the administration of that money, what can be done, what you should stop doing and what is best for you.

1. Make the decision: Just like a person who wants to start exercising or lose weight, he must also have the will to make a monthly record of what we are going to mention. Anyway, we start by congratulating you, because if you are reading this article, it is because you are sure or at least want to start with a budget that fits your financial life.

2. Know how much you have: make a careful list of all your financial products, then write down how much money you manage in each account and how much income you receive month by month, also take into account the interest rates charged for example by credit cards and finally write down what are the expenses of each product and of course those of the month that may move them in cash.

3. Knowing how much money you are making: if you only receive your monthly salary it will be very easy, but if you are independent or earn for hours the thing changes, because you do not always receive the same money. If this is your case, we recommend that you average the recurring income of the last six or twelve months and if you want to be more conservative, choose the lowest amount, this will allow you to give yourself “drawer” in case of an emergency or an expense additional.

4. Know what you should: Do you always have to borrow or ‘scratch’ the card at the end of the month because the money is not enough? Then write in name order who your lenders are and of course how much you owe them. Now, if you are paying any credit, include it and if you are late, this will also help you know in total how much you should later make a plan that allows you to dissolve all debts.

5. Know where and where your income goes: you already know how much you owe, now you have to calculate from your income how much is the amount you are spending month by month, that is, the expenses you often have. For this you can save all your invoices and then develop some categories according to the type of expenditure, these can be very general or very specific, choose the one that suits you best. The categories could be: food, leasing, public services, daily expenses, vehicles, children, among others.

6.  Determine its net worth: it is very simple. It is about taking up the previous steps and doing an operation: subtract. Yes, determine your net worth by taking your total income and subtracting it by total expenses. The result can be encouraging or pessimistic if it is the first, it can take the result and convert it into permanent savings or divide it into two, one part for entertainment and the other to save, it all depends on the amount, but if the situation is the second case, cheer up! You must come up with a strategy to get out of debt.

7. Know where your money is not going: now that you know how much your net worth equals and your result was positive, we recommend that you make a list of possibilities where you could leave or save your money in the short or long term, it can be To an investment fund, to a savings account, to open a CDT, to have a business, to buy a house or to study a career, it all depends on your desires.

8. Follow-up and monitoring: the results will only be seen in the long term if you are disciplined, since keeping track of and recording your finances does not take more than a couple of hours or minutes. Get to work, this task should be done month by month, remember that it is not just about targeting your expenses and income, but rather about making wise decisions that will lead you to an effective money management.

9. Have financial peace of mind: living without stress is priceless, enough with the stress that some personal conflicts and daily work can cause to have stress for financial reasons. Having a budget frees you from a cause of additional stress.

Conclusion:  The most important thing is to know perfectly how much our family income is and how much is the total expenses and thus know the remaining money. We must avoid making an uncontrolled use of credit cards, but in the case of using them we must be very attentive to the interest generated, since we will have to add them to our expenses in the following months .

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