More and more people are looking to start their own business or generate more income. Having a successful company goes far beyond having a good business idea, as several factors come into play. To achieve success it is vital to take into account the commercial area, the internal organization, the customer service, the objectives of the company and the work team are among others.
One of the most important factors is economic. It is important that people who want to become entrepreneurs know and follow some basic personal financial advice for the proper functioning of your company. In MyInvestmentBlog you come to know about Boost your personal finance with these 4 ideas:
1. Know the % of your income that you allocate to your fixed expenses.
Once you set up your budget, you have to start understanding the information on it, for example, how much money you have committed every month for your fixed expenses, how much for variable expenses and how much you can save month by month.
We consider fixed expenses to those expenses that we have to pay, such as electricity, gas, rent, expenses, etc. Other expenses such as food, although we also have them every month are expenses where we can spend more or less depending on the month, which is variable expenses.
And the importance of knowing your fixed expenses has to do with what you have to be prepared to know, if at any time your income is at risk, decrease or disappear, how much money you would need per month to be able to meet these fixed expenses.
2. Create an Emergency Fund
Once you know your monthly income and expenses, you can start building an Emergency Fund for possible contingencies such as something broken at home, some type of medical treatment that is needed in the family and social work does not cover , any outlier that arises or even if any of the people who generate income in the family are left without work. Having an Emergency Fund allows us to live peacefully and it is a gesture of love towards the people who live with us because with this fund we are protecting ourselves and we are protecting them. So if you don’t have it, don’t hesitate and start generating it.
3. Control your debts
Another issue to analyze once you put together your budget is the% of your income that corresponds to debts, which can be: debts to family/friends, loans of any kind or credit cards. The sum of the amount corresponding to the monthly debt payment should not exceed 35% of your income! If that happens Ok we have a problem. And you have to put together a plan to get out of this situation!
Debts with credit cards for me are the worst of all because if we do not control them they can increase very easily. So if you have debts of this type it is essential that you identify the total amount of your debt month by month and verify that it is decreasing and not increasing. Many times even without using them if we do not pay the total, the interest month by month is increasing our debt. So you have to be super attentive and keep a detailed control of the
4. Define your financial goals.
Without objectives, there is no plan, and without a plan, there is no effort. In order to keep your finances tidy over time, it is essential to define savings objectives in the medium and long term. Since these objectives are what will allow you to take perspective and analyze when an expense is necessary or not. Since if an expense goes against your goals or moves you further and further away from it, you will question it and try to avoid it.