“I can make very bad decisions and not even notice until it’s too late”: I struggle to manage my finances effectively. How can I improve my money habits and build a secure future?

Hi Money Minder,

I need help figuring out my financial future. Even though I have a finance degree, real life is tougher than I expected. I grasp the investing concepts but need guidance on getting started and forming good habits.

I’m 27 and recently relocated from Mexico to Spain. I landed a job in a small office, set to become an assistant to the financial director next year with a salary boost. I also assist my brother with his business in Mexico, which is going through a restructuring phase.

Here’s a breakdown of my finances:
– I earn 1,095 EUR a month in Spain
– Around 790-800 EUR (~16,870 MXN) from my second job
– Total of around 1,880 EUR per month
– Savings account of approximately 4,400 EUR
– ~1,900 USD (around 34,000 MXN) in another account

My monthly expenses include rent, groceries, gym membership, health insurance, phone bill, transportation, and other miscellaneous spending. I also spend on my girlfriend, who is studying and receives support from her parents.

Overall, I’m cautious about money but tend to make impulsive decisions without realizing it. Can you help me get on the right track with a solid financial plan?

Thanks,
Financial Seeker.

Response from THE MONEY MINDER:

Hello There,

Congratulations on taking the first step towards setting up a plan for your future. It’s commendable that you are actively seeking guidance to navigate the challenges of managing your finances. Moving to a new country and balancing multiple streams of income can be overwhelming, but with the right approach, you can pave the way for a financially stable future.

Given your background in finance and the progress you’ve made in your career, it’s essential to build on your knowledge and skills to make informed investment decisions. As you transition into a more senior role in the family office next year, use this opportunity to learn from the financial director and gain practical experience in financial management. Ask questions, seek mentorship, and familiarize yourself with the investment process to enhance your understanding.

In terms of your current income and expenses, it’s important to create a budget that aligns with your financial goals. With a total monthly income of around 1,880 EUR, you have a good starting point for saving and investing. However, it’s crucial to track your expenses diligently and identify areas where you can cut back, especially on discretionary spending like taxis and unnecessary purchases. Setting specific financial goals, such as saving a certain percentage of your income each month, can help you stay focused and disciplined.

When it comes to investing your savings, consider diversifying your portfolio to manage risk effectively. Given your interest in finance, explore different investment options such as stocks, bonds, mutual funds, or real estate. Start small and gradually increase your investments as you gain more confidence and knowledge in the market. Remember to prioritize building an emergency fund to cover unexpected expenses and protect your financial stability.

Lastly, managing finances as a couple can be challenging, but open communication and mutual understanding are key. Discuss your financial goals with your girlfriend and find a balance between enjoying shared experiences and saving for the future. Encourage each other to make conscious spending decisions and support each other’s financial aspirations.

In conclusion, developing good financial habits and seeking continuous learning and growth in the field of finance will set you on the right track towards a secure financial future. Stay disciplined, stay focused, and remember that every small step counts towards building a strong financial foundation. All the best from THE MONEY MINDER as you embark on this journey to financial success.