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7 steps to make ends meet with cash and no complications

This article was translated using AI technologies from our Spanish edition. Errors can occur as a result of this process.

The opinions expressed by the entrepreneur's contributors are their own.

In order for money to be not a worry or stress in your life, you need to understand that it is not about how much you make, but how much of your income you keep and what you do with it when it is in your pocket. Surely you have reached the end of the fortnight or month and asked yourself, "How did the money go?"

According to CONDUSEF, ant expenses can add up to 12% of your salary without you even realizing it. These expenses are for example the business, tips or snacks.

Surely those $ 500 pesos that you spend on meals outside the home during the month or the $ 40 pesos on cappuccino "from time to time" or 10 or 20% of the generous tip in the restaurant would help you, Electricity or electricity to pay phone. As you add little by little, think about all of the money that goes into emotional spending and ant spending.

Make the account how much 12% of your salary is and imagine what you could do with that money.

The best part is that for each month you define a limit on this type of spending based on a percentage that you choose and that you are not allowed to exceed.

If you want to know how to optimize the way you manage your money, I am going to give you the 7 easiest steps to simplify your spending and take control of your personal finances. This way, you can make ends meet without a headache.

Step 1. Set your goals

Have you ever wondered what motivates you to get up every morning? The answer to this question is what main engine do you have in order to achieve your goals.

Once you get this answer, write it down in your head and don't lose sight of it because if you don't have your clear goals you don't know what to do or where to go.

From buying a car to the house of your dreams to debt relief, some of the answers can be. But it is not enough to want it, you have to work for it.

If your list of goals has more than one, focus on just one at a time, depending on the priority you set. It will be easier for you and it will prevent you from worrying about getting them all without seeing positive results. If you focus on one thing and don't see an immediate result, don't despair. Remember, it will all take time and effort to achieve.

Step 2. Analyze your expenses and income

At this moment, if you were wondering what the exact sum of your expenses and income is for the month, would you know the answer? Probably not.

Many people believe that creating a monthly budget just keeps track of expenses and is a waste of time too. ERROR!

The real intent in creating it is to have a plan for your money that will allow you to take care of your personal finances and make better decisions in order to achieve the goals already set.

I recommend that you manage a monthly budget with the free app he has developed – similar to monthly budget – or in one of your preferences. This way, you can not only track income and expenses and not go over your budget. But you can also get alerts for payments you have to make and at the end of the month you can have reports to see how your money is doing and make better decisions.

The biggest benefit is that you can take it anywhere and not miss any details of your finances at the moment.

Step 3. Define your fixed and variable costs

You need to understand that the lower your expenses, the easier it is to stop worrying that your income will not reach you.

First, define your fixed costs, which make up the highest percentage of your total costs, month after month, e.g. B. Telephone payments, electricity, car insurance or the monthly payment of pay TV.

The meals that you prepare outside of the office and at home, or that you spend on transportation from one place to another are variable expenses and usually result in you spending more because you don't know exactly how much money you are going to spend when To spend them on them, you need to devote more than your monthly budget to them.

Take into account that if your variable expenses are larger than the fixed, it is because you are probably spending too much on things that are not important and you should figure out how to simplify them.

Step 4. Reduce the cost

The most important question to ask yourself is, is there anything about this expense that you can simplify?

In between shopping for clothes, going out with friends, or that fashionable electronic device that you don't need, you may fall into the trap of emotional spending.

First, define the costs that you can simplify. For example, instead of watching TV longer, you can read a book. So while you simplify expenses, you are adding valuable information to your life.

Rich people only invest in two things: education and investment vehicles.

Using daylight instead of electricity, bringing home cooked food to work, using public transit from time to time instead of driving are some of the easiest things you can do to make your expenses easier, and that will make a big change May result in your pocket by the end of the month.

Step 5. Invest

Remember that the expenses that you have been able to simplify should not be spent on other things that also create unnecessary costs at the end of the day. Focus on the decisions that will help you grow your money through investments.

In general, people with an investor profile will try to raise their capital and then keep investing. This results in increasing cash flow until it covers monthly expenses without having to work, thereby achieving your financial freedom.

Step 6. Eliminate and / or avoid debt

Obtaining a debt to pay your expenses is not an easy way out and, of course, will not bring you any benefit. On the contrary, it will cause even greater effort and gradually sink you and delay your path to the goal.

When you get to this point, this is where some of the expense you simplify can be absorbed so that you can dedicate part of the investment and the other part to debt management.

Remember, if what you pay monthly for your debt is more than 30% of your income, you should seek out an expert to help you resolve the problem.

One way to pay off debts is to generate additional income. Search your home and sell them when you have an electronic device that you no longer use, clothing that no longer fits, or tools that you no longer use that are in good condition!

Step 7. Separate your money

You have probably defined your expenses and income, but for better management of your money, I recommend that you segregate it.

In the "Financial Reconfiguration" book, I propose a personal management system that includes 7 accounts plus one (7 + 1) that allows you to segregate your money in specific areas and allocate it for specific purposes.

These 7 + 1 are: education, investments, monthly commitments, fun, donations (donations), special projects (e.g. a house), endorsements (money for emergencies) and the + 1 are taxes.

All of these areas should be assigned a percentage based on your monthly budget according to your goals. It is not enough just to know the information. Remember, you need to implement them as soon as you have them to see the expected results.

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