It is common to hear the phrase: “what a small salary for such a long month”. And it happens because we do not know how to spend or we have a poor quality of spending.

Budgeting can be cumbersome but it reduces the need for order, planning and knowledge of our financial activities.

What is personal finance for? They are used to understand our income in order to maximize the profitability of our money and turn it into benefits.

Income is a source of cash inflows to support you and your family. These may be your salary, bonuses, retirement or pensions.

Expenses are all those that have to be made and cannot be avoided such as services, food and goods.

We can use some of our income to generate other income such as investing.

Investing means the purchase of assets, i.e. acquiring an asset or buying a right that the company owns that is expected to generate a rate of return in the short, medium and long term.

Investments can be made in mutual funds, government debt, real estate, technology companies, entrepreneurship and art. We will talk in another column about techniques to invest our money.

Prevention is vital because you never know when an unforeseen event may occur. You can invest in life or health insurance or estate planning. It is essential to be accompanied by an insurance specialist in order to purchase insurance according to our possibilities.

Let’s remember that every financial decision we make can affect our quality of life and future.