Usually when we received an extraordinary income or bond, as the utilities, the great concern of many is to find ways to make the most of it, not waste it. This concern is even greater when one lives in an economy marked by uncertainty and with high levels of inflation, which makes the money to lose their value quickly.
Given this scenario, you must be more disciplined in relation to your expenses, think fast and make smart purchases. The main rule you should follow is to avoid unnecessary expenses.
Upon receipt of the profits, many people already have committed this income commitment that was acquired during the year. This is not necessarily bad, especially if you managed to acquire assets, productive assets or necessary expenses.
Now, if you’re a lucky and still have availability for your earnings, it is important to take into account the following basic recommendations to make efficient use of your income:
Reduce the balance of your debts, this is a good opportunity to improve your financial situation and credit history. Remember the golden rule for healthy finances is that maximum you spending 35% of your income to pay monthly fees. In case you are over-indebted, start by making a list of your debts and devotes part of your collection of utilities to reduce having higher interest rate, especially credit cards.
Acquisition or renewal of insurance, be currently insured is an obligation, because the costs to attend a disease can strongly impact your budget and your heritage, thus fail to improve your risk coverage (health, life and assets). If already have a policy, a part intended for renewal. This way you get peace of mind for next year.
Acquisition of productive assets, this will allow you to protect your money from inflation. Look for opportunities in your environment that are adjusted to your risk profile and experience. The investment of your profits the can in several areas:
- Entrepreneurship, this may be a good time to start your project, for it considers associating with people who have interests similar to yours and in particular that can generate added value to have a higher probability of success.
- Education, consider improving your skills and abilities to invest in a post-graduate specialization courses or training, etc.., This way you can improve your performance for bigger and better opportunities.
- Investing according to your risk profile, do not stop looking for opportunities in real assets such as property or work equipment for your business, meet with your financial advisor, increases your mutual fund, you can also think of accumulate for your retirement, Education Fund, Fund for your project or business in the future.
Assets that will improve your quality of life, such as your family home remodeling, repair or purchase of a vehicle, equipment, etc. which can be considered to complete your payment with a credit line.
Performs smart purchasing, remember that we are in one of the most special times to shared and can be very easy to overstep the account. The best way to make smart purchasing is to make a budget, sets a limit of what you are spending. Then set priorities and review the best options that come to this estimate. Do not go shopping without a plan and reference price. Do not confuse expense with investment, even when prices are increased by the effect of inflation, prevents nerve purchases, especially items or appliances that do not need.
Emergency fund, this fund will allow you to tackle any unforeseen or daily flow of your income. The basic recommendation, it is to have at least, three to six months of your basic expenses saved. Remember, this fund should be liquid, must be profitable and must be protected from inflation.
Utilities are an excellent opportunity to improve your personal finances and quality of life. We hope you can make the most out of them on the road to financial freedom.