Welcome to my humble blog. There I try to share my personal experiences in the form of anecdotes combined with life reflections. Today we will talk more about controlling and managing our personal finances. Personal economy is based on and limited by the money we receive for our work, that is, our monthly salary. Normally we work between 20 and 22 effective days, from Monday to Friday, every month throughout the year (this is normal in countries with strong economies), but due to the demanding pace of life and increased demands, working hours may have been extended to their maximum.
The evolution of the origin of money based on barter and commercial exchange would be essential for our money to be enough to cover the basic needs of lodging, food and even entertainment, leaving some money left over to save or invest, thinking of a future with economic solvency. Image 1 clearly exemplifies this idea, starting with a small amount of money saved monthly we create an economic discipline of "sowing" for a solid monetary future that would be unbreakable even though we see a fragile glass container.
I tell you that 2 years ago I traveled to Ecuador, a South American country whose monetary unit is based on the American dollar. I bought the plane ticket and the lodging stay using my credit card with long-term installments (12 months) and there began the monetary imbalance that haunts me to this day, because the inflation and economic recession after the pandemic led me to renegotiate the debt that I had not paid and they applied the unfair and dishonest practice of charging me "interest on interest."
Based on this personal experience, I searched for information about invisible money, which is related to all economic activities where we leave the visual contact and control of our physical assets, that is, the banknote as a currency of commercial exchange. The most common:
- Casino chips: it is less painful to lose a few pieces of plastic that have a number 1, 10 or 100 printed on them than to lose a 1, 10 or 100 dollar bill.
- Credit card: buying something to please our tastes without having the cash required to acquire it, exceeding our financial limits without having all the money together.
- Consumer bracelets: in hotels or clubs it is customary to place a bracelet with bank credit data that is used to consume on the site without the need to handle cash.
- Cryptocurrencies: it is the clear example of invisible money, since it is based on virtual transactions through virtual wallets, but at one extreme it can become cash.
The experience of that trip to Ecuador made it clear to me that it is better to save a portion of my salary each month to plan a tourist trip for the near future and not get into debt with 12 installments, plus interest and the renegotiation of the unpaid debt that added interest on top of the interest already included at the beginning. That invisible money that led me to make stupid decisions had as its starting point that reward for economic indiscipline, the granting of 1, 2, 3, or more credit cards that inevitably end in a monetary imbalance.
One thing I learned on this trip was that it is beneficial to keep cash in high denomination bills, since for psychological reasons it is less controllable to spend with low denomination bills. Also, in Ecuador it is somewhat difficult to buy a sandwich in fast food stores paying with a 20 dollar bill, imagine if I dare to pay with a 100$ bill, despite the fact that its economy is based on American dollars. It is a good way to control extraordinary expenses.
What you don't see doesn't hurt!
| Interesting references to review: |
|---|
- Origin and evolution of barter to invisible money, by Vanessa Padilla
- INVISIBLE MONEY: THE TRANSFORMATIONS OF SYMBOLIC EXCHANGE, by Kseniya Shtalenkova
Image source:
- Image 1: Encouraging savings and investment, by nattanan23
- Image 2: Banknotes and credit cards, by stevepb
- Image 3: Invisible money in roulette, by meineresterampe