10 Decisions with your money that will improve your financial future

When it comes to improving our personal finances we have many alternatives at hand. They all sound easy on paper, but when the time comes to put them into practice, countless excuses arise that prevent us from prospering financially.

That is why if we want to positively impact our bank account, we will not only have to make a series of decisions, but we must also give up those excuses that have us stuck.

Here are 10 decisions that will positively impact your bank account, and while they are not easy decisions, they will certainly be worth trying.

1. Spend less than you earn

Sounds pretty easy, it’s a decision you’ve read in most personal finance articles and media, but still don’t apply it in your life.

It’s all too easy to say that you’ll spend less than your income will be, and it’s just as easy to forget it when you see those clothes you don’t need, that new phone, or that sudden trip.

Make the decision not to spend more months in the red, of having to take out your savings to cover the expenses of your parties, clothes and things that you no longer use. Give up the excuse that you have to make sure you live in the moment.

2. Save before you spend a single penny

According to Telefónica Global Millennial Survey 2014the generation millennial It is characterized by being careful with its financial movements, even 83% consider that it could save more money. However, many remain in the “consider”, including you.

A good decision is to save a percentage of your income, say at least 10%, before thinking about paying your bills, spending money or maintaining your lifestyle.

Alternatives such as automating this savings from your bank account make your life easier and prevent an excuse from taking precedence over your saving decision.

3. Get debt that generates income

How many times have you told yourself that the reason why you don’t undertake that business idea you have in mind is because you don’t have enough capital?

The lack of money cannot be the reason why you do not start a business, because today there are multiple options to get capital for your business.

Even with online business loans, they are a very interesting source of financing that you can use to start from scratch.

Why else acquire this debt unlike a credit card? These types of loans are classified as good debts, since you will be generating income from them and consequently positively impacting your bank account.

4. Have a margin of error in your budget

The first step is to create a personal budget to control your finances.

Unfortunately, many people do not have it because they are lazy, because they do not know how to do it (here I explain how) or worse, because they do not even understand what it is for.

A budget is a tool that allows you to keep track of your personal finances; starting from the income to the most minimal expenses, you can keep track and control of these.

It is important to clarify that your budget should not be extremely rigid since there are unexpected expenses and income that appear.

Based on this reality, a decision that will positively impact your bank account is to keep a margin of error in your budget: money to cover an emergency, an unexpected expense, an unplanned date or event, among others.

5. Set financial goals

If you want to positively impact your bank account you have to know where you want to go. It is impossible to improve your finances without having financial goals that motivate you to work.

Remember that a financial objective is not wanting an increase in your salary, it is defining how you are going to invest the money you save, how long you plan to do it and what rate of return you expect to achieve.

To begin with, you can define three financial objectives; one for the short, medium and finally one for the long term. Let’s give an example:

• In the short term, that is, in 6 months, you will commit to paying off all the debts that are not generating income for you.
• In the medium term, that is, in 3 years, you agree to invest 50% of your savings in a fund that invests in the stock market at an average rate of 10%.
• In the long term, that is, in 5 years, you will have your own apartment which you financed and covered with the income from the stock market, a part of your salary, etc.

The more specific you are with your goals, the clearer your mental image will be and therefore the easier they will be to achieve.

6. Evaluate and measure your financial growth

To meet your goals you must measure your financial growth. What is not measured is not improved, and your personal finances are no exception to this rule of life.

Make the decision to evaluate yourself; Ask yourself how your financial performance was, what did you spend your money on, what did you invest it in, which purchases were emotional, which decisions helped you achieve your goals, and which ones did not.

You can create your table in excel and measure your performance. For example, make comparative tables in which you measure how the expense was in the different items such as outings, purchases, basic needs, investments and others.

Without a doubt, this is one of the actions to improve your finances immediately.

7. Pay your bills and debts on time

Before you start saving, the first decision you should make is to pay off your debts (especially those that do not generate income and have a high interest rate).

The importance of this decision is to avoid paying interest in arrears, which little by little bleed your bank accounts and consequently affect your personal finances.

Now, when you pay your monthly bills on time, or in advance, you have some savings which you could use as margin of error in your budget, which you could invest in something, or simply buy yourself something you like.

8. Build a good credit reputation

The previous point will help you build your credit reputation. The importance of this decision is that it is often better to have friends and a good reputation than money itself.

When you have a reputation for paying on time, meeting your responsibilities, and your personal finances show it, many investment doors will open immediately.

Make the decision to pay your bills on time, to keep your promises, to put the money you receive to good use, to look to the future and to be clear that a large part of success in life stems from the image and reputation that you pass on to others.

9. Diversify your sources of income

No matter how many zeros your salary has, don’t rely solely on one source of income. The risk you run by depending on just one is that once it fails, your finances will be 100% affected.

According to the aforementioned telephone survey, 71% of the Millennial generation thinks it is important to become an entrepreneur, so this may be a good alternative.

Make the decision to invest your salary in other sources: become an entrepreneur, invest in the stock market, real estate and in your friends’ companies, in this way your sources will be diversified and the risk will be substantially reduced.

Recommended books:

10. Invest in your financial education

Finally make the decision to educate yourself regarding your personal finances. The biggest mistake we make, and the one that affects our bank account to a greater extent, is ignorance.

We make decisions with little or no information; We think that personal finance is something that does not concern us or that requires a high degree of prior knowledge.

So invest in your financial education; either through books, courses, seminars and advice that help you understand how money works and how you can get the most out of it.

[Extra] 11. Create dollar income

Before finishing, I wanted to leave you with an extra decision that is mandatory in these times that we are living: you have to create extra income in dollars.

Inflation and devaluation so require. Every day our local currencies are worth less, products are more expensive and the outlook tends to be uncertain.

So you have to take control and create income dollars that help you share these factors that are out of your hands.

Without a doubt, if you create your first entry of income in dollars, which you can do from home and without the need to speak English, you will increase your financial security and have greater control of your personal finances.