ENCARGOS TÉCNICOS BLOG
TIPS FOR HOME ECONOMICS IN TIMES OF CRISIS
How to make ends meet, without dying trying.
The economic crisis caused by the pandemic, current levels of employment and inflation and the more than likely rise in interest rates are causing a financial earthquake in a large number of Spanish families, wrecking the work and savings that we have worked so hard to achieve.
We had all done our calculations to balance the household economy, pay the mortgage and make ends meet, so that we could at least afford to go out to dinner in a restaurant from time to time. But at the moment, our plans are being blown out of the water.
There is a saying that the more you can believe in a path to achieve a set of results, the more likely you are to achieve them. But it is also true that it is not rational to simply blindly follow a set of rules. We must always be questioning and adapting accordingly to changing circumstances.
Each person has his or her own way of dealing with problems and we do not intend to belittle anyone or overestimate ourselves. We are simply putting forward a series of tips that we believe can help us to cope better with the difficult times we are living in.
Look at your current options.
Let’s be honest: everyone has the capacity to be incredibly messy or rather out of control, especially when it comes to managing spending and savings. This leads to bad habits that can seriously damage your finances.
Instead of making the same decisions over and over again, review your bank account regularly. See if you can adjust your resource allocation to meet your goals and risk tolerance. And make sure it’s all in line with your lifestyle goals.
Do you have multiple accounts? If so, consider consolidating them into one, which you can manage with a reasonable amount of time and effort.
Create and stick to a budget.
As you can see, it is important to constantly assess your personal financial situation. This can give you the information you need to create a spending plan that actually helps you save money instead of spending it on things you don’t really need.
You should never allow yourself to be chained to debt. Sticking to a budget is a great way to make sure you can always pay your bills on time. You can also save yourself some money by setting up a savings account. This will help reduce the temptation to access your emergency funds.
Reduce spending.
The best way to control your spending is to stop giving in to impulse buying. This is like the old advice not to go to the supermarket hungry.
If you find yourself in the midst of a bout of consumer anxiety, consider leaving your credit card at home or giving it to a trusted friend. This will allow you to avoid the temptation to spend more money than necessary.
Be careful with debt.
It is important to pay off your debts as quickly as possible. This will prevent interest and debt from getting bigger and bigger. Once you are debt free, it is much easier to save for the future.
It is not good to get into a vicious circle.
If you have a mortgage and you are struggling to make ends meet and the next month the same and the next month the same, perhaps it is time to take drastic measures. Big things make big things better.
Talk to a property advisor, explain your situation and consider selling your house, paying off the mortgage and buying something more affordable with a lower monthly mortgage payment.
If you decide to sell your home, don’t forget to set up a detailed budget to determine how much money you will set aside for expenses, down payment, taxes, etc.
Seek advice and optimise your credit report.
Your credit rating affects your ability to qualify for certain types of loans, as well as forcing you to pay a higher interest rate.
If your credit report has negative data, try to verify it with your bank, to confirm that it is correct. And if it is, seek financial advice and start taking steps to turn it around.
Knowing how to better manage your finances can make the difference between being financially stable or living with uncertainty. Seek out financial advisors who specialise in helping people with their problems. If you can get the help you need, you will see a significant improvement in your finances.
Change the way you think about money.
Money problems are never easy to deal with. However, by making simple changes in your thinking, you can find a way to have a more positive relationship with your finances.
Remember that you don’t need to spend a lot of money to feel that you are living in dignity. Don’t obsess over seasonal fads, use discounts to save on your grocery shopping, and check sales flyers to see what items are most cost-effective for you to buy at any given time.
Save money for an emergency.
It is important to have a solid emergency fund and a good way to start is to save a couple of hundred euros each month, (each person according to their means) and put it in a separate account. The purpose of the emergency fund is to be used only in extreme cases such as job loss or an unforeseen financial crisis.
Most people will find that they can keep their finances on track by developing good habits and making a few simple changes.
Take the time to read through these tips and you are sure to find one that works for you and helps you get through this crisis in the best possible way.