One of the current challenges for each person is to maintain healthy finances, having proper financial management allows for personal and family security to face unforeseen events, achieve goals; Adequate planning will avoid excessive debts that harm our peace of mind and cause stress, however it is very easy to lose financial control and not detect whether the level of our finances is good, neutral or bad.
A good sign of healthy finances is making ends meet with money in your pocket after having paid debts, essential expenses, as well as allocating a percentage to savings or investment, as detailed by the proptech Flat. “When we are at this level we can give ourselves certain luxuries, considering a maximum limit to spend. Simply put, it is the financial level we all dream of living at,” he stated.
On the other hand, finances are at a neutral point when at the end of the month it was possible to cover the payment of all pending debts without the need to borrow, however the account remains at zero, which prevents saving or investing. Generally, this financial level is reached because we spend a little more than we should on small superficial consumptions, and because we do not establish a monthly budget.
On the other hand, having negative finances translates into spending more than you have and consequently resorting to debt, installment payments and the inability to make ends meet with liquidity, “if we find ourselves in negative numbers it means that we are living a lifestyle that doesn’t commensurate with our income,” Flat said.
If the relationship between income and expenses is in a neutral or negative state, it is necessary to begin to heal the finances to find a balance in daily expenses, for this it is advisable to carry out an analysis of the income received monthly and the purchases or payments made. In this item, expenses related to non-essential activities must be considered, such as going to the movies, going to a bar or ant expenses, the office coffee and the consumption of snacks.
When identifying monthly expenses, Gerardo Obregón, founder and general director of Prestadero, recommends associating the different disbursements to three groups: essential, non-essential and objective expenses.
According to the proptech Flat, a correct financial control must be made up of 50% for payment of basic expenses, 20% destined for personal expenses and tastes, and the remaining 30% must be destined for objective expenses, so, if when analyzing the control of finances these are not favorable, you can start by eliminating non-essential expenses.
The general director of Prestadero explained that although reducing non-essential expenses will help to reach the end of the month with liquidity, it is advisable to identify the expense that causes instability in finances.
“If the level of spending is greater than income, the first thing we have to eliminate are non-essential or leisure purchases, coffee on the corner, sweets, going out to buy a juice, but if, by eliminating these disbursements, we still numbers are still negative, the problem must be analyzed. For example, perhaps eliminating the payment of interest on a debt represents greater slack, for this action can be taken such as refinancing the loan, ”explained Gerardo Obregón.
On the other hand, if the level of expenses is still higher than income, experts recommend reviewing the composition of essential expenses and, in due case, opt for a second job through apps such as private taxis, delivery services parcel.