Two out of every three people in Ecuador are in debt and their income does not allow them to cover all their debts, according to data from Asobanc and Aval Buró.

Personal finance refers to the financial management that a person or family needs in order to be able to plan, save and spend money at a certain time. However, a number of factors such as income, expenses, assets, liabilities and possible economic risks that may affect the economy are taken into account.

“In order for personal finances to be balanced, it is necessary to follow the whole process which it includes planning, self-evaluation, setting goals, performing certain activities, monitoring, evaluating and measuring our movements“, says the dean and professor of finance at the Universidad del Río, Francisco Parodi.

Financial coach Andrés Mórtola reminds that it is important to keep this in mind you should only borrow up to 40% of your income, because if that amount is higher, it would be considered over-indebtedness. At this point, it is no longer possible to “generate enough income to pay contracted debts. It is necessary to determine fixed and variable costs, the percentage of savings and determine the amount of debt.

exceptit is common for consumers to confuse when an expense equals an investment. In this case, the investment represents a short-term or long-term benefit, instead, a simple cost is equivalent to the use of economic resources to obtain something that does not represent an advantage to the person.

How to get out of debt

Stop using your credit cards. Even if you have more than one credit card, it’s better not to have them close at hand for long periods of time. If it can no longer free you so much, just have one in your wallet.

Don’t let the debt grow. Continuing to pay “whatever you can” is not a good decision, as the unpaid amount continues to accrue interest and consequences.

War economy. The goal should be to pay off the debt. For this, it is necessary to adjust the family or personal budget to the maximum expression.