Improving your personal financial situation is possible: seven steps to do it...

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The financial situation of thousands of Spanish families leaves much to be desired. Low salaries, excessive debt, little financial culture, no ability to save, poor money management... We could spend hours debating the reasons that cause this situation, but we won't. Or at least, not on this occasion.

The objective of this article is different. In it we will explain how the majority of these families could reverse their situation, cancel their debts and start saving and investing . To do this, we will rely on the seven steps of the method proposed by Dave Ramsey in his book The Total Transformation of Your Money ( available on Amazon ).


Needless to say, there are no fully priced self-help pills here. Nor is it a magic formula with which to turn a mileurista into a millionaire overnight, but rather a system that with perseverance and effort, a lot of effort, takes you by the hand from mediocrity to stability and freedom. financial.

Save , euros as quickly as you can.
Everyone is exposed to an unf   Israel Email List    oreseen event that turns their domestic economy upside down. A car breakdown, an illness, a broken appliance... If this happens and there are no savings, where do we get the money to pay for it?





Since incurring debt is not an option, the first step towards financial health is to save a symbolic amount of money: , euros. The objective of this small emergency fund is to prevent us from contracting new debts . It will not solve serious financial problems, but it will help deal with inopportune expenses.

And how can you save , euros if your salary doesn't even make it to the end of the month? You might ask. Of course, you won't get it with excuses.

Sell ​​things you barely use on Wallapop, put in some extra hours at work, do some part-time work during the weekend... In war situations, war decisions are made. With effort and creativity everyone should be able to generate an extra , euros.

How to make money quickly?
ON THE SALMON BLOG
How to make money quickly?
Cancel your debts with the snowball plan.
It is the most complicated step of all; the one that requires the most time and the one that requires the greatest sacrifice. To start, you will need to make a list of all your debts in order from smallest to largest.

The snowball method consists of concentrating all your efforts on paying off the smallest debt you have . Only that, regardless of the interest rate you pay for each one.

Each month, you should add as much extra money as you can to eliminate that first debt. When you get it, use the money you previously paid for it to pay off the second debt. Once you achieve it, do the same with the third, adding to its payment the money that you used in debts and ; and so on until canceling them all.

What it is about is using the money that is free after paying a debt and using it to attack the next one. This method is known as the snowball plan because the amount available to pay off debts is increasing , which speeds up the process.

Top up your emergency fund.
At this point, you should be out of debt (except for the mortgage, which we'll talk about later). Therefore, your expenses have been reduced considerably. If your income has not been reduced in all this time, you should be able to save money each month .

We don't know how to save, or is it that we can't?
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We don't know how to save, or is it that we can't?
You will use that money to expand the emergency fund of , euros that you created in the first step. Ideally, this fund should cover between three and six months of your usual expenses . For example, if your family has monthly expenses of , euros, your emergency fund should be between , and , euros, depending on your personal situation and your aversion to risk.

You will keep your rainy day fund in a liquid place, such as a savings account or bank deposit. The objective is not profitability, but rather that it be accessible at any time. It goes without saying that you can only use it for emergencies that cannot be foreseen in advance. A wedding, prom dress, or vacation are not emergencies.

Invest for your retirement.
By the time you reach the fourth step, your financial situation will already be much better than that of most people around you. You control your expenses, you have no debt and you have saved a significant sum of money. What to do next? Put on your long-term glasses and start investing for your retirement.