Individuals are connected to the economy across at least 3 levels, including the personal economy, which relates to how their finances are made and managed, the national economy of the country in which they reside, and the global economy, which affects both the personal and national economy. While the personal economy is controlled by the individual, the other two have a significant impact on an individual's financial well-being.
In a report published by Forbes, writer Adisola Adisakin argues that many people treat economic policies and news as if they were unimportant, especially when it comes to how they affect their finances.
The author touched on the important financial lessons she learned from some financial mistakes with unpleasant consequences. She recalls, for example, when she quit a well-paying job because she was eager to get a new job and change her work environment without having any savings. She didn't think about how inflation would affect her if she left her job without a backup plan, didn't have any extra income and had to learn the basics of money management.
The national and global economy can have a significant impact on personal finances because they change everything, from the number and type of jobs to the prices of goods and services, affecting personal budgets. Inflation and fluctuations in interest rates also have a significant impact on the cost of borrowing money.
It has become necessary to pay more attention to how economic policy works and stay up-to-date with national and global economic news to understand how it affects your finances. Below, the author offers some tips that helped her understand economic news, make informed financial decisions, and better understand economic issues.
The national and global economy has a significant impact on personal finances as they change everything from the number and type of jobs to the prices of goods and services, affecting personal budgets.
Good use of social media platforms
For years, the author has been following social media to stay up to date with economic news, especially as it has affected her finances. While social media has its downsides, it's a powerful tool to educate yourself.
When it comes to your money, act consciously about what you know about your personal economy and who gives you that information. Keep an eye on reputable economists and financial analysts on social media and continue to interact with their insights and analysis on economic news and trends.
Understand financial news
The author became more informed about economic news by paying attention to what the government and the central bank have to say, and asked friends and co-workers in the same field to provide her with more information about inflation, interest rates, and economic policy. One key question to ask: How does this specific monetary policy affect your money and income?
Behaviors that harm our financial stability
Once you have acquired this skill that many people lack and in order to save your money, and be able to manage your finances with economic crises and emergencies, such as the one the world is currently going through, you must also have some other skills.
According to Finanzaspersonales, managing personal financial accounts is a key skill in this fast-paced world where it is hard to predict what will happen tomorrow.
Just like the crisis created by the coronavirus in the past, the future may also see the development of other situations that undermine our daily lifestyle, so we need to prepare for these hypotheses, not only psychologically and emotionally, but also financially.
That is why today more than ever we need to improve our financial situation and gradually change our bad habits.
Here are some of the behaviors that are most detrimental to our financial stability:
Lack of financial education
Financial education is one of the pillars of economic and social development, and helps us make good financial decisions based on correct information, in order to improve our standard of living.
The lack of this knowledge in some people may lead them to misuse loans and bank credit cards, for example, sinking into debt beyond their ability to repay, making bad investments and not choosing how to save their money.
But even if these mistakes are made, it is not too late to fix the situation, anyone can take advantage of all the tips and educational programs found on the YouTube platform and on the Internet, to get a simple and clear explanation about the various theories and methods of personal money management.
Lack of preparedness
Humans generally tend to think only about the present, and seek reward today without thinking too much about the future. However, taking the time to plan for various possible challenges and surprises will make us ready to manage our finances in the future.
Some positive habits in financial planning include controlling the budget, leaving a percentage of income to emergencies, making savings and investing, and buying an insurance contract.
slouching
The site emphasizes that the right time to make good financial decisions such as saving and investing is today, not tomorrow. If you postpone the date of starting to deposit money into the pension fund, and leave an emergency amount, you will most likely continue to postpone indefinitely.
To be prepared for all eventualities, you need to start preparing today. All you need is to make the decision and get started to achieve.