By Juan Carlos Fernandez | Corporate Tax Manager of Grupo SID 

Personal finance refers to proper money management. It implies keeping track of your income and how it is invested and spent, always considering the importance of saving. Having good personal finances provides us with security and freedom in our daily lives, which translates into financial well-being. 

Steps to improve our finances:

1. Determine your income and expenses: It will make you more aware of how you handle cash and what you are spending on. A simple budget brings a lot of clarity. 
2. Establish your financial goals: With proper control of your expenses, you can establish your savings goals and future projects, develop a plan and monitor your progress. 
3. My financing capacity is equal to my income minus my expenses: You must prepare a budget that includes basic expenses, in order of importance: food, medicine, rent, education, and transportation, among other fixed debts, as well as contingencies that may arise. The budget must be flexible to adapt to the circumstances and demanding enough to motivate us to create the good habit of saving. 
4. Cut back on unnecessary purchases: Unnecessary expenses abound. Analyzing our costs allows us to reduce or eliminate those that do not add value. 
5. Have control of debts: Misuse and lack of control over expenses cause large deficits that can exceed your borrowing capacity. Although credit is essential, you must consider your credit limits and the interest rate of the financing. Be careful that “the dark side of credit” does not reach you, for making wrong decisions about loan options with usurers or street lenders, with fixed interest payments, or the case of handling several credit cards, making the mistake of financing yourself with them. These bad decisions can lead you to a vicious circle with severe consequences. 
6. Be sure where you invest your money: Analyze where your money is going. Seek advice and ensure profitability and invest in recognized and experienced entities. 
7. Financial education: Educating ourselves to control impulse emotional purchases and overspending brings benefits to our economy and greater well-being that translates into peace of mind, mental health, and quality of life for our families. 
8. Cultivate a good habit of saving: Saving allows us to create our capital, receive income from that money and prepare for the future. With proper planning, saving will enable you to achieve short, medium, and long-term goals. Also, it makes it easier to be financially prepared for any emergency.