How to keep a good balance in your personal finances

Personal finance is a term meant to describe managing your finances through budgeting, spending and savings. This involves long-term planning and considers potential financial risks, retirement and estate planning, investments and how your financial situation evolves over a lifetime.

Terry Turner (2022).

Due to the current inflation that we have in our world, many countries are facing a crisis with their economic system, it has a negative impact on people’s finances, the prices of most products must be increased, companies kick out some employees in order to save money, the government increases the taxes that people must pay, many currencies lose value and the banks increase the interest which causes people to spend more money paying this debt.

After this list of negative impacts because of the inflation, It is extremely necessary that people find many ways to keep their budgets safe, and also, to change some habits that are sometimes considered normal or necessary.

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Survey.: Good personal finance.

In order to help people to identify these habits that make their finances worse, the following survey will be used to do it.

1) Smartphone with the coolest new features. You …

• A. Run to the store and stand in line to be one of the first people to have it.

• B. Compare prices online, so you can get the best deal right away.

• C. Tell yourself that the price always comes down after a while, and decide to wait.

• D Other

2) You are invited to a birthday party and know a gift is expected, but you’re short on cash right now. You …

• A. Spend more on the gift than you can afford anyway.

• B. Try to find a nice gift that’s not too expensive.

• C. Say you are busy and don’t go, so you don’t have to buy a gift.

• D. Other

3) You discover a hole in your pants. You …

• A. Go out and buy new pants.

• B. Have the pants repaired.

• C. Fix the pants yourself.

• D. Other

4) You would love to have a fancy, high-tech entertainment system in your living room, but you just don’t have the money right now. You …

• A. Buy it with your credit card and hope you find the money to pay for it later.

• B. Cut back on other expenses until you’ve saved enough to buy it.

• C. Decide you have more important spending priorities than buying an entertainment system.

• D. Other

5) You always split the restaurant bill equally with two work colleagues when you eat lunch. This time you weren’t hungry and ate very little. You…

• A. Pay your usual 1/3 of the bill.

• B. Offer to pay for just the small amount You ate.

• C. Ask the others to treat you, since your amount was so small.

• D. Other

If you circled three or more A’s: You are definitely a big spender. Your motto is: Easy come, easy go.

If you circled three or more B’s: You’ve got a good head on your shoulders about money. Your motto is: Everything in moderation.

If you circled three or more C’s: You are thrifty and don’t waste money. Your motto is: Waste not, want not

Personal Finance Tips.

After doing this survey, If you are a person who doesn’t manage well money, here there are some tips to keep your finances balanced:

Live within your means.

Try to buy things that you can afford, and take into account your budget, in that way, you will not use a credit card, and you will not be drawn into debt.

Keep track of your expenses.

To be aware of our debts, we are going to avoid paying extra money due to interest and many other fees that sometimes we have to when we do not pay on time.

Save money regularly.

There are many ways to save money but due to inflation, it is recommended to do it by buying some products that can increase their value in the market such as gold, a house, and why not dollars, generally, this currency is not affected abruptly by the world economic crisis, so it could be a great alternative to save money.

To start a business.

The best way to keep your finances balanced is to have your own company, no matter if it is big or small, the idea is to produce extra money to cover most of your expenses.

Don’t use credit cards.

It could be the worst thing you could do to have a balance in your finances, people think that having one of these cards will be a fast solution for the acquisition of some products but they do not take into account that it is like any debt, the interest will be increased little by little, people will end up paying extra money for this debt, and the worst part of this is that people like getting many credit cards to buy things in different stores which is even dangerous because of a negative impact on your credit bureau report if you do not pay these massive debts.

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References.

Turner (November 21, 2022) Personal Finance. https://www.annuity.org/personal-finance/