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Balancing our Personal Finances

Updated on September 26, 2014


In this day and age balancing our personal finances can be a real challenge. Whose fault is that? Is it the governments? The stock markets? The big companies? Ourselves? Probably a bit of each. The fact is that for many years now we got used to living with more than we actually need and coming down from there is not easy.


The current economic crisis is making us re-evaluate our way of living, our choices and our priorities. Banks are not lending as they used to, people have difficulties paying for the house, the car, the TV. It is making us rethink how we view our life and our personal finances. It is making us put an emphasis in changing our habits, in saving money and investing wisely.

In the long run, this may very well be a world changing event, not only when it comes to economic politics and other matters pertaining with performance, structure, behavior, and decision-making of the whole economy throughout the world, but also when it comes to sociological changes, as it will probably change how society looks at money, savings, economics, even the government, and shifts its perception, its action and reaction. It is happening already, massive movement of citizens against the market and governments.

It is probable that in twenty or so years our children will be handling their finances in a way that is inherited from what is going on today. Hopefully it will be in a smarter and more efficient way than it has been handled by our society until now.


Money is that thing which basically everybody wants. You just have to have it. Having money was always something everyone aspired to. Money is the way to have an easier life, it’s the way to make many of your dreams come true. And money is always very hard to get. Well, maybe not to get, but certainly, to keep.

Most people work all their lives and come out short in the end. Usually, unless you hit the jackpot or you come from a wealthy family or you are a real prodigy at something, money is the one thing that seems to elude us.

The fact is that money isn't all it’s cracked up to be. The fact is the more you have, the more you need and in the end what should get you an easier life actually makes you work harder and harder until you have no life whatsoever.

Nonetheless, money is handy and you really can’t live without it, so…

But, at some point getting money became much easier. It was just a matter of ending down to the local bank. Need a TV? Fine, here is a brand new TV. Need a car? Here, take one. A house? There you go.

So, money became “affordable” for anybody and everyone could have its heart desire – more or less.

But suddenly, now, that is not so anymore. Money is again a "high commodity", not available to everyone.

The question that remains is if we can go back. Since money is even more valuable these days, can we make ourselves realize it and change our way of life to fit this old concept? The old concept that says we can’t have it all? And what about the new concept? Because the reality is: credit days are over.

Personal Budget Spreadsheet Demo

You can download this spreadsheet for free here.


Realizing that credit days are over, realizing money is even more valuable now, will probably make us re-evaluate how we manage our personal finances.

It is time, then, if you haven’t already, to make some life changes. Here are some tips that can help.

First you need to convince yourself that you need to look at money and savings in a whole different way. Like everything in life you must want to make that change.

Therefore, start by:

  • Assessing your financial situation: compile your balance sheets and your income statements; Find out your income, your debts, your general spendings;
  • Set your goals: it can be paying your house in the next five years, retire with 100.000,00 $ in the bank or whatever you find important;
  • Create a plan: probably cutting down on unnecessary expenses, changing your habits, getting a part-time or another way to have some extra income. If you are good at crafts or cooking you can, for instance, start baking cakes for sale or some other thing you can do at home in your spare time. You can even think about investing, again, very carefully;
  • Put the plan into practice: this is probably the hardest part, but keep your eyes on the prize;
  • Monitoring and reassessment: from time to time you need to re-evaluate your personal financial situation to make sure if you are doing okay or if you need some readjustment.

Also, it doesn't hurt if you have financial notions and, of course, assess your situation and establish objectives. Having goals makes these changes much easier, because you will be giving up certain things now for a higher and bigger purpose or purposes on the long run: it can be buying your house; it can be paying off your debts; or, even, save money for the old age. Whatever it is, it must be something personal that is important to you. You can’t think of here and now, you can’t think of that brand new ipad you wanted, you have to set your mind to think about the future and especially to the rested sleep you will have not worrying about the rainy day, because you already have your umbrella with you.

Finally, you can think about investing if you have enough and can spare some, after all does it get any better than this to invest? I would say no. Everything is so bad right now that most people want to sell whatever they have, so you can get real bargains now. The same with stock options. But again, you must know what to buy and when to buy, because not all businesses now are good businesses. There are a lot of people scamming others. Then there are businesses which may be safe, but not wise, for instance the value of gold right now is so high, that it has nowhere else to go but down. Maybe not just yet, but… So, one would be buying gold at a very high price, when very easily the value could drop and one would lose money.

Tips on How to Save Money



Once you’ve assessed your personal finances situation you will also be aware of how much exactly you need to get by every month.

Your first decision, once you learn this, should be how much will you save every month or week. Remember it doesn't have to be a high value. It can be 10% of what you earn, but it can also be 1%.

As soon you get paid put that money aside. Tell yourself that money doesn't exist. You need to get by just with the rest.

Another exercise we should do from time to time is to remind ourselves of how it was, for instance, when we were in college, we were on a budget, there was not a lot of money and we really needed to balance our needs with our wants and we managed that very well. Probably we didn't have much, but did it really matter? Were we happy or were we happy? Remember those days? It is possible to get by with less and to be happy like that.


It’s bad enough to balance your own finances, let alone try to be on top of someone else’s. Let’s be real about this, what is true today may not be tomorrow. Today someone can have an okay situation and tomorrow everything collapse. Do you really want to put your family, your financial situation and future at stake on account of someone else? Don’t get fooled. If the person does not pay the bank loan, you will have to, as the guarantor. So, do you want to take that chance?


Well, actually never invest the money you need for your expenses. Money for investments should come only from some savings you have and even than you should never invest all your savings. Invest only a part of your savings and choose your investments wisely.



If you can and have a good idea go into business for yourself. It’s a fact that is easier making money if you have a business than if you are just an employee. Obviously there are exceptions, but this is the rule. Again it is important to have some savings, because there will be harder days and also things can go wrong. It works more or less like investments, you can’t be sure if it will work, but if it does you’re set. Don’t forget if you follow this path your financial discipline will have to be even greater. Finally, chose a line of business that is based on people’s needs no matter what may come. If what you offer is expendable in case, for instance of a crisis, your business is riskier.


Be very careful if you think about getting a loan. First ask yourself what do you want the loan for. Is it worth it? Do you really need it?

There are some things where in no situation you should make a loan so you can have them. Example: a car. That’s it, a car is a good example for this. Cars devalue very rapidly, actually as soon as you are driving away from the car dealership and from then on it’s always down. So, you will be paying the value of the car plus interests just to get a car, which is not worth that amount? Better to buy a used car if you can’t afford a new one, than to make a loan.

Loans should be only for very specific and important things like buying a house. Even then you must consider many factors, before choosing either the house and the bank alike. Be sure you get every bit of information you need before deciding, talk to several banks, check every condition and all the expenses you will have and don’t forget to read the fine print.

How do you usually pay your credit card bill?

See results


If you have them, lose them. If you have credit card debt pay it, as soon as possible, actually it should be your first goal. As soon as it is paid, away with the credit card.

Credit cards are a trap. Easy credit helps no one and you are just deceiving yourself, you will have high interest rates to pay, probably for things which you actually don’t need.

So, make it a rule, if you need the credit card to have it, you just don’t need it at all.


So, if you are struggling with the crisis, if you are struggling with your personal finances, remember this is just the beginning, making these changes, will change your life, will set the tone for your future and will allow you to relax. After all, money can be the answer, but money is also the problem, the difference lies on how we handle it.


Did you like this hub? Was it useful, entertaining, interesting… Don’t forget to leave me your comment and vote on the hub.

For more information check out my profile and stop by my other hubs.

And if you enjoyed, maybe you can also join us here at Hubpages, it’s fun and free and you can click here.

© Copyright Mar 18 2012 / To use part or the whole article you must first get written permission from the author. Feel free, nonetheless, to use an intro of the hub with a link to the article here on hubpages for the rest of the article.

© 2012 Joana e Bruno


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    • algarveview profile imageAUTHOR

      Joana e Bruno 

      9 years ago from Algarve, Portugal

      Hello, Phil, thanks, I'm glad you liked it. I think that is just it, budgeting our money and a lot of times doing what we can, not what we want... It would be great if we could have everything, but that is not the case, so... Thanks for reading, commenting and voting. Have a great day!

    • Phil Plasma profile image

      Phil Plasma 

      9 years ago from Montreal, Quebec

      Another great hub - we've been using a budget since before we got married and it has been instrumental in keep us appraised of our day to day finances. There have been periods where we've really had to tighten our belts, and other times where we've been able to save a lot to prepare for future times of belt tightening.

      Voted up and useful.

    • algarveview profile imageAUTHOR

      Joana e Bruno 

      9 years ago from Algarve, Portugal

      Hello, again, Kerlynb! Again I'm very happy you liked it. That one I think it's a good advice, personally I use it and it's amazing how I can stretch small amounts of money, but if I wouldn't have set some aside, I would probably end up spending it all... Have a great day!

    • kerlynb profile image


      9 years ago from Philippines, Southeast Asia, Earth ^_^

      You guys got everything well covered! I particularly like your advice about saving and setting money aside as if it does not exist - "Tell yourself that money doesn't exist. You need to get by just with the rest." I think it makes perfect sense! We have to pay ourselves first, defer unnecessary expenses, and simply save for emergencies and old age. Have to vote your well-written hub up and (absolutely) useful! Bookmarking this one, really :)

    • algarveview profile imageAUTHOR

      Joana e Bruno 

      9 years ago from Algarve, Portugal

      Hello, Brett., thanks for reading and commenting, I think you are completely right, we've lost track of the real value of money. Hard as it is right now, I think it will probably shape the future of the next generation, not letting them make the same mistakes and teaching them to avoid plastic money and easy credit. All the best!

    • Brett.Tesol profile image

      Brett C 

      9 years ago from Asia

      Good advice. It is so important to budget now and avoid the traps of the past. Unfortunately the monetary system is a broken design that needs rethinking. Until things are managed better and we return to the world of real value (not money that is printed with no value backing it), things will continue to roller-coaster.

      Thanks for SHARING.

    • algarveview profile imageAUTHOR

      Joana e Bruno 

      9 years ago from Algarve, Portugal

      Hello, savanahl, yes, it is very important to learn from an early age to budget our money. Anyway, I think that the last decades saw a change in habits when it comes to money, so it's always nice to remember the old ways... We sure need it these days. Thank you for reading and commenting and have a nice day!

    • savanahl profile image


      9 years ago

      Great information. My dad taught me how to budget my money when I was 12 years old. I've been doing it ever since. You provide some very useful information. I will definitely be bookmarking this. Thank you for sharing.


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