Improving our financial situation from the basics
When we analyze the ways in which economically we can over time achieve financial stability, there is a very basic formula, which is essentially what many have done, and this is spend less than you earn, yes, very basic, but often very forgotten, which causes many to make big mistakes, by getting into debt too much to maintain high living costs, which eventually end up ruining any other plan.
I know that it is a logical way to save money, and as long as it is for a specific purpose, it is logical, and it will depend, of course, on the type of saving that is done, because if for example it is done in a local currency such as the Bolivar, Venezuela's national currency, it would be totally absurd, since it is permanently devalued. But saving is not the only strategy to implement if we want to improve our finances.
To achieve stability it is best to make use of multiple tools to achieve it, and it is not enough just to save. For example, something that some people apply to a great extent is Decreasing expenses, it is also basic, there are many superfluous expenses, which make your money not yield and you have less and less possibility of saving. So these are some of the things we must do if we want to improve our finances.
But is that enough?, no, there is another aspect, that we cannot leave aside, and that is Invest, it is also basic, as everything I have been saying so far. There is no point in saving if it is not for a purpose, the idea is that beyond having money at our disposal we can put it to work so that it can be reproduced, currently there are great options to achieve this, some very risky, others not so much, we must adjust them to our level of risk.
What I have discussed so far I have said, and it is because I truly believe it, that these are very Basic things, perhaps that is why most people don't do it, as they minimize the power and scope they can achieve if they focus on their finances in a simple, uncomplicated way, you don't have to be a financial genius to be able to stabilize, it is easy to see it, but too often we see it difficult.
I think you have to mentalize in the fact that we must always establish logical strategies, without great aspirations in the short term, rather achieve small but constant steps, this makes our goals are achieved, over time and we can enjoy a better situation, but that if, with a logical plan, do not you think?
hello @josevas217,
one of the hardest things for the average person to do is to spend less than what they earn, since generally people living in latin america earn much less than what a person needs to live. trying to manage an amount of money that is not enough to live on is a real challenge.
Hi
Saving and investing are like the two sides of a coin one does not go without the other.
A successful strategy would be to manage both the aspects well.
I think that compound interest is one of the strognest tools out there to use. Time and investing are going hand in hand and are able to generate a good amount of wealth!
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Great piece of work @josevas217
I found topics related to personal finance to be quite crutial, so allow me to resteem this post.
One thing that I myself found the most important is to learn to LOVE EXCEL. I believe that as long as we have problems with making notes about our spendings -> we will continue to struggle financially.
Planning, budgeting, monitoring our spending habbits. It is all a MUST.
Most amusing part is that Goverments are often the ones forgetting that simple rule. They have so many brilliant economicts recruited. And yet it doesn't help them to limit spending -> most of the time they spent more than they earn and end up printing more and pumping extra currencies into the economy (basically: they increase country debt to cover extra spending).
Cheers, Piotr
The logic of building wealth begins with clearing debt first then saving and investing, trying to save and invest while there are still unpaid debt, will consistently result in a huge level of backwardness.
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