East Africa News Post

Complete News World

Avoid these expenses that destroy your monthly finances

Avoid these expenses that destroy your monthly finances

Nowadays, it is very important for people to learn about proper money management, because in this way they can get… economic stability.

You must understand that an essential part is expenses and you must take care of this area carefully.

In this sense, it is necessary to specify different Types of expenses that existBecause in this way you can avoid financial imbalances and control your money in the optimal way.

Expenditure, defined as the expenditure of money for specific goods and services, should be in line with the income level and purchasing power of each individual.

It is recommended to first develop a budget that takes into account aspects such as income, savings, fixed and variable expenses, as well as debt payments. Among the expenses, there are several types that can negatively affect personal finances if not managed properly, according to the BBVA Bank portal.

  • Ant expenses: It refers to small, recurring payments that, although they may seem small, can amount to a large amount at the end of the month. Common examples include impulse purchases or everyday coffee.
  • Flexible expenses: These are inevitable payments, but you can control how much you spend on them, such as on gifts or entertainment. Not setting limits on these expenses could contribute to financial imbalance, which is why it is recommended to set an amount at the beginning of the month.
  • Poor planning of fixed expenses: These are mandatory payments, such as paying rent or basic services. However, if they are not planned, their income may be greater than 40% of their income, which may limit their ability to save and generate long-term financial problems.
  • Excessive variable expenses: It does not have a fixed amount, it depends on the needs of the individual, such as unplanned purchases or excessive use of credit cards. These types of expenses can hurt your finances because you may not spend accurately and end up using more money than expected.
  • Emergency expenses: Although they are unexpected expenses, such as emergency repairs or urgent medical expenses, they can hurt your finances by not having adequate savings or an emergency fund. To prevent this from happening to you, it is recommended to save part of your salary for this type of situation.
See also  Notice of concern from a US airline regarding safety issues

Omitting these types of expenses from the budget is one of the most common financial mistakes. And potentially harmful. It is essential to recognize and manage them effectively to maintain strong finances and achieve long-term savings goals.

Recommendations for conservation

  • Create a budget: Keep detailed records of your monthly income and expenses. Set aside money for basic needs such as housing, food, and transportation, and allocate a portion of your income to savings before considering other expenses.
  • Automate your savings: Make automatic transfers from your checking account to your savings or investment account. This will help you separate your savings funds and avoid the temptation to spend them unnecessarily.
  • Reduce unnecessary expenses: Identify areas where you can cut expenses, such as dining out, entertainment, or unused subscriptions. Small adjustments can have a big impact on your ability to save in the long term.
  • Avoid unnecessary debt: Limit the use of credit cards and avoid going into debt to finance purchases that you can defer or pay for with cash. Prioritize paying off existing debts and try to maintain a good credit history.