Personal Finance: A Guide for Dummies

Personal finance has become a recurring topic of conversation among couples, friends, and family. We are all concerned about the high cost of living in Medellín these days and we help each other as much as we can to save on everything possible.

This need has led to one conclusion: Many people avoid monthly budgets.

There is a large part of the population that prefers to live day to day without worrying about what might happen later. Although we want you to live a quiet life, we believe that the worse mistake you can make is going down the road without having a clear account of how much you have and how much you can use.

This article is a reminder and a guide for dummies of those things that you must take into account to make a budget that is useful and to which you constantly return to update the data.

1. Excel is your friend:

If you are like me, who prefers language over numbers, Excel has always been a personal enemy that stands out for being complicated and not very fun, but if you want to have a place where you can see a real balance of what you have and what you spend, Excel is the perfect solution. If you do not have any knowledge of the platform, it contains many budget templates that will make the work easier and more intuitive, the only thing you will have to do is change the data adjusting them to your reality.

2. Don’t forget your variable expenses: When building your budget, some people only calculate those things that are usually paid month to month, without taking into account that accidents and unforeseen events happen. There is no worse path to disaster than not having a budget for unforeseen events, it does not have to be a large amount but it should be a help that you can resort to whenever you have an emergency.

3. Folders are not just for taking notes: If you are a person who does not have control of how money is invested if you only have it in cash, an excellent tool can be a small folder and plastic envelopes. The only thing you have to do is mark the envelope with each of the categories in which you invest on a daily basis and allocate an amount for each category each week. Although this proposal takes up more space than a wallet, you will have control of where your cash should go and if you have savings… Know where it came from and in what things you do not need to invest so much because there are more economical options.

4. Education is not an expense: If we have learned something over time, it is that the resources to grow as people generally only exist when there is a surplus in one of the other categories. We want to reinforce in you the idea that education is a necessity, something in which you must invest month to month even if it is a little. Taking courses, going to classes (Acquiring a plan with USpanglish) are ways in which you can improve your work, grow as a human being and seek to be better every day.

5. Add a section for your ” I deserve it”: While on our Instagram we keep a list of gifts that we would like to give ourselves, the budget is an opportunity to see everything that you have achieved, no matter how simple it may seem. In order to have the complete perspective of everything you can do with your salary, I recommend something simple: Add a column where you put all those things that against all odds you have already been able to buy, this includes clothes, stationery and all those things that you did not need but you wanted to give yourself.

Having a budget can be stressful or a lot of fun, depending on how you decide to analyze the situation. What I want to offer you today is a tool that can give you peace of mind if you allow yourself to analyze its benefits.

See you next week.

Mariana Latorre

USpanglish team

Categorías: Usletters