From spender to saver in 7 steps

First step: Make a commitment to plan your financial life. In order to make this effort more pleasant, establish purposes for it: retirement, children education, a spectacular trip, the purchase of a home of your own or a car. Set priorities and realistic deadlines to achieve each goal.

Second step: In this process it is crucial to know the expenses and incomes of your family. Write down all your expenses faithfully for a month and compare them to your income. You´ll be surprised to find out how much money is being wasted. Keep in mind that from now on, each saved cent will get you closer to your goals. So do not hesitate in cutting small expenses, such as renting DVDs that nobody watches or - courage! - your after work.

Third step: Make (and stick to) a family budget. Get your family to participate. Ask them to make suggestions on how to  cut expenses. Explain the need to reduce expenses so you can save more. Entice them by telling them the purpose of the savings. After that it will be much easier to convince them to think twice, three times, a thousand times before buying something. Will you really need it, after all?

Fourth step: Get rid of your debts. The interest you pay on your overdraft account or credit card may turn into income if, instead of spending, you save your money to pay cash later on.

Fifth step: Set aside part of your income each month for investment. Before spending any of it, save some of the money. Save part of your Christmas bonus to begin or add to your savings.

Sixth step: Don´t be too greedy. Don´t try to make up for years and years of spending overnight. Use your head. The investment that offers the best return isn´t always the best for you. Keep in mind that, the greater the chance for profit, the greater the risks. Therefore, be sensible and carefully evaluate the liquidity, profitability and security of the investment.

Seventh step: Look for financial institutions with good reputations. Stay away from those that promise extraordinary profit in a short period of time. Financial miracles just don´t exist.