Learning about personal finance is essential to know how to manage your personal and family finances better. Through good planning, you will get more out of your money and avoid having financial instability. Being able to manage your finances well requires a little time,
First tip: set a spending budget
It's hard to say 'no' to something you want, especially if you have the money to buy it. The key to not wasting your capital is to establish a budget that includes the most common expenses (housing, food, car, etc.) and the extraordinary ones, that is, those that may arise at a given time and that you did not plan to repair of an appliance, car, etc.).
Second tip: study the market
Knowing how the market moves are essential for personal finance management. It is not about becoming an economist overnight but rather about learning basic concepts such as inflation, economic cycles, and interest rates on the internet. Numerous websites disseminate basic information about what happens in the market day by day. Day.
Warren Buffet himself is a great defender of training and study to avoid losing money: "There is no problem with an investor who knows nothing but is aware of it. The problem is when you don't know anything, but you think you know something".
Third tip: say goodbye to debt
That is, you must avoid debt by asking for loans to buy things that are not necessary or that, in the future, will not give us precise profitability. According to some experts, the total of the debts incurred should never exceed 20 or 30% of all disposable income. If you want to request a loan to start a new business, you must first learn the basic investment rules.
Tip four: think long term
This rule is directly related to saving and establishing a good planning strategy for personal finance management. If you say 'no' to certain expenses, you avoid incurring debts that later can destroy the budget allocated for other expenses. Saving is the foundation of strong personal finances.
If the intention is to use the saved capital for some investment, long-term planning is also important. Buffet said on more than one occasion that patience was the key to his success: "If you are not willing to own a stock for ten years, don't even think about owning it for 10 minutes."
Fifth tip: invest savings to generate returns
Money kept in a wallet is not profitable. To increase the capital, it is necessary to allocate a part to some investment. Today there are numerous alternatives to make your money generate profits. You can invest in infrastructure, art, jewellery, or more traditional assets such as the Stock Market or bonds.
The capital should never go to a single company or product since, if something goes wrong, your pockets will be empty. Diversification increases the chances of making a profit and decreases the impact of possible losses.
