We all know how complicated it is to make money last until the end of the month. However, if you know hot to save it is possible to do wonders with the wallet.
Here are 5 fabulous ideas to have money left over at the end of the month:
1. Organization above all
One of the keys is to order. First of all, as soon as they deposit their salary, each person should organize themselves with the billing dates of their debts before thinking about what and how to spend the “leftover” money.
Why is this important? Basically, because having the money in a bank account, without seeing it, makes our real perception of the total available in our possession false.
For the same reason, it is common for people to start spending money before their debts are billed, which obviously has unpleasant consequences when the last days of the month approach.
While there is no limited number of credit cards that can be accessed, it is important to consider deposit capacity. The idea is not to exceed 25% and 30% of what is received each month in credit payments.
As a recommendation, when taking out your credit card or contracting any service, request that the monthly billing date is during the first 10 days, to have funds and have an order from the beginning.
Thus, once the fee has been paid, you can only think about what you can do with the money that remains at your disposal.
2. Not paying the minimum amount of Credit Cards
The minimum amount to pay is the essential monthly value to be covered on the date of payment or due date of your Credit Card account statement so that it is enabled to continue using it and not go into default.
However, many people take this amount as the amount to pay each month, which means that their debts do not finally decrease, completely losing control.
This happens because banks or commercial houses include in the minimum payment the amount to pay financial obligations, such as interest, and not the debt you have.
The amount of the minimum payment and what is included in it is a percentage defined by each bank or commercial house and is estimated to be between 3% and 5% of the debt balance plus the totality of all non-fundable expenses.
Some examples of these expenses are administrative costs or annual fees, late charges, interest, taxes, commissions, cash advances, and purchase fees.
This means that the minimum amount to be paid is made up mostly of interest, commissions, and taxes, and not by payments that reduce the initial capital.
It should not be surprising, then, that by paying the minimum amount each month, the debt is not reduced.
3. Save at least 10% of your income
We all know that saving is important, but we also know how unsafe it is to do it at home.
If you make the decision to save money, the ideal is that you do it through a savings account, since you will have the certainty that your money will be kept safe under lock and key.
The advantages of depositing at least 10% of your salary in the bank are many, but the most important thing is that you will acquire a habit that can improve your future.
Among the benefits of opening a savings account are:
- A credit history is generated for the client, as an important letter of introduction to the different financial entities. The advantage of having a good credit history is that it allows easier access to loans (vehicle, mortgage, cards).
- In order to encourage savings, some banks offer free extras such as insurance against theft, home assistance, and discounts on various activities.
- No commission should be paid for checking movements and balances. However, the money must remain immobile in the bank for certain periods of time, in order to generate positive interest earnings in its favor.
The important thing is to remember that when you save money in the bank, you are certain that you will be safe, while at the same time having greater control by being able to consult the movements or transactions easily from the telephone, website, or ATM.
4. Ask yourself, do I really need it?
It is part of human nature to find excuses to buy something. It’s easier than saying “I don’t need it”.
The temptation to buy goods and services that are not urgent, much less necessary, generates useless expenses that can prevent you from making ends meet.
For example, the mere fact of walking down the street and seeing a spectacular piece of furniture for the house with a 50% discount in a window can generate an impulsive action of wanting to buy it.
It may not be something urgent, but it will hardly be found again at such a “ridiculous” price.
Ridiculous price…we could be talking about a $25,000 or $50,000 piece of furniture, a value that with a credit card is finally reduced to a monthly expense in installments.
And if right at the end of the month you have an emergency, you need to buy some medicine, food for the dog, go to the movies, or go out with friends? You will no longer have that ridiculous $25,000 you spent on impulse.
If you’re going to make a purchase and you don’t know if it’s something you really need or want, you’d better walk around, take a deep breath and count to ten before making a hasty decision.
5. Take back control
Once these good practices have been carried out and you already have a more organized spending schedule, the ideal is to try to accumulate as much money as you can in a savings account emergency fund.
To save, it is more effective to deposit in an account than to leave the money at home, since it can be tempting to spend it.
Conclusion
It all adds up, until you save a few pesos each month. This way you can avoid reaching the last week and having to use the credit card because you will have extra emergency money.
The question is not how to save more. The question is when do you start with this challenge?
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