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How to Manage Money Correctly

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Using emotional intelligence, being organized and disciplined, saving and being informed about the economic environment are some of the recommendations made by experts. By Alejandra Clavería Managing personal finances can be a headache for many. Divide the income to pay bills, invest, save or allocate for extra expenses, is not something that everyone is willing to do periodically. However, being a good financial administrator can become an excellent tool when buying goods, such as a car or a house, or to endure economically difficult periods. For this, it is not required to be an expert. It is enough to have some notions of accounting, but even more important is to have the discipline and perseverance necessary to plan all the financial operations that are intended to be carried out. Here are some of the recommendations that specialists make to learn how to manage money correctly:

Use your emotional intelligence.

Contrary to what one might think, various studies have shown that the level of intelligence of each person has very little relation to the amount of wealth that he manages to achieve. That is, people with a high IQ can also make mistakes in handling their money. This is because the most successful people are not necessarily the smartest, but they have developed their emotional intelligence. In that sense, attitudes such as transforming failures into successes, knowing and managing risks, being modest, and living simply, would be decisive weapons when managing personal finances. “The management of personal finances is a complex issue that involves the interaction of multiple knowledge and skills. Thus, IAE Business School . In the same line, Carlos Urrunaga, an economist at Centrum Católica, argues: “intelligence allows us to know and understand a greater number of investment alternatives. And with more information processed, it’s easier to know where and when to invest. “

Be organized and disciplined.

One of the requirements to be a good financial administrator is, without a doubt, to be ordained. For this, experts recommend preparing a balance sheet and calculating the current assets, and then prepare a budget, including disposable income, net income, recurring expenses and outstanding debts, if any. “Being an organized person is key to a good administrator. In this case, it is not based on theoretical knowledge, but rather on having developed good organizational skills, “explains the IAE expert.

Save.

“Being thrifty will lead a person to invest on a regular basis, even if the markets are in decline,” says Noussan. To achieve this goal, the individual must be able to not get carried away by the desire to buy, unless it is for real need. Not using the credit card as additional money is another recommendation made by experts.

Know how to distinguish the risk in each investment.

Trying to stay cool, when people face panic, for example in times of crisis, is paramount when it comes to managing finances. In this sense, distinguishing the risk in each investment that is made will help achieve greater balance and profitability. “From what I read and see, I always perceive smell, guts and high propensity to risk. And also counter-cyclical characteristics: when everyone buys, they sell, and when everyone sells, they buy, “says Centrum Católica economist.

Inform yourself.

In order not to be tempted to invest in the assets of fashion, buy with the markets down and sell when they are on the rise, it will be necessary to be always informed. “The good administrator must be very informed and not be ignorant of the fate of personal investments,” says Noussan. Something in which Urrunaga agrees: “the important thing is to be always well informed and in this, the main thing is not to process the information but to use it. Concimiento y sentimiento is the recipe.”

Design a flexible plan to achieve your goals.

Having a financial plan and follow it, but also be willing to change it if environmental conditions change, is another recommendation made by specialists. The good administrator should plan and trace the objectives he wants to achieve by ordering his money, such as taking a trip or buying a car or a house. Once the objectives are defined, the person will have an idea of how much they should save or spend monthly to achieve all their goals. And you, what would you recommend to be a good financial administrator?

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