Financial education is still something that many are unaware of or don't bother to cultivate.
However, this topic is extremely important, both for personal finances and for the finances of companies and enterprises, for example.
The purpose of financial education is to help people manage their income, savings, and investments, to consume consciously, and to prevent critical situations.
Make an analysis of your current situation
First of all, it is important to know where you stand. Start with the following questions:
- Do you have any money saved?
- Do you have any debts?
- What is your total income? How much is fixed income and how much is variable income (if any)?
- How much of your income goes to fixed expenses and how much goes to other types of expenses?
- What is your consumption style?
By answering these questions, you will be able to draw a consumption profile for you or your family. From this, it is time to establish an action plan. In general, it will direct you in two directions: pay off debts or start saving.
Plan your spending
Start by making plans for your money. First, write down where your money is going. Then, define your short, medium and long term goals.
By remembering what you spend and making a plan, you will see how much easier it will be to avoid waste and spend wisely.
Setting short, medium and long-term goals also helps you manage your money today.
Make a savings account
Now that you have planned your spending, it is time to think ahead. Saving is important for two reasons.
The first one refers to the fact that saving makes it easier to achieve your goals, to buy something you want, etc.
The second reason is to create a reserve for moments of crisis, i.e. some unforeseen event.
Cut spending on superfluous things
Spending on unimportant things is one of the reasons that lead people to get into debt and spend more than they can afford.
Consumerism is a habit that needs to be fought little by little with attitudes that make a difference.
Even non-essential expenses, which refer to your lifestyle, need to be managed carefully. By reducing superfluous expenses, you are on your way to conscious consumption.
Just get started!
The dream of the first million dollars may seem very distant, but it is not impossible. All you have to do is start.
Financial stability does not always mean being paid more than others. Sometimes someone who receives less can have more balance than someone who receives more.
