Financial literacy advice from ICREF in Murcia

This comes on occasion of the Financial Education Week each October in Spain

The coronavirus impact has shaken economies both on macro and micro levels, and it is perhaps quite timely that the annual Financial Education Week is happening right now. On that occasion, ICREF (the Institute of Credit and Finance of the Region of Murcia) decided today to issue some useful advice to households on how to better weather the crisis situation that is affecting so many.

ICREF is a public entity, which forms part of the Murcian Ministry of Finance. Its main tasks are to procure financing for the autonomous region and to manage its debts.

Financial health needs to be looked after just like body health

Much like going to the doctor for prophylactic checks, it is a good idea to take stock of the state of your finances at regular intervals. This is one of the main recommendations by the Institute, together with developing and following a realistic budget on one’s expenses, always keeping some funds set aside for unforeseen events and comparing the interest rates and financial products offered by the different banks.

“Economic news is gaining prominence recently, and that causes citizens to pay attention to these issues that may be less catching in good times. It is important to delve into these concepts because acquiring financial knowledge improves the decision-making of citizens, and this is reflected in their household economies,” said Luis Alberto Marín, the Director of ICREF.

The Murcian Government website reminds citizens that there is more than advice offered. For example, the web portal ´Finanzas para todos´ (Finance for everyone), developed by the Bank of Spain and the National Securities Market Commission, is an informational and easily accessible platform. It is designed as a digital simulator which asks questions on the financial habits of the user and provides a broader view and guidance on one’s realistic financial situation.

Other financial advice

When it comes to the preparation of a personal budget this will allow us to prioritize expenses and see how money is being spent and whether improvements can be made. To that end, ICREF recommends dividing one’s costs into categories and doing away with those that are deemed non-essential.

Likewise, it is a good idea to be on top of things when it comes to following the variety of monthly financial documentation that one might be receiving, such as account statements, direct debits, credit card statements and payment due invoices. They can make more sense if you create a monthly calendar with notifications.

As for the emergency fund, it is better if this one is kept separate from the regular bank account used for bills and credit card payments, preferably as a low-risk deposit.