Taking care of personal finances is a skill that is being increasingly sought after. In a time of financial crisis, people start to worry more about what they should spend in order not to see the account in red at the end of the month and, thus, they look for everything they can about personal finance.
Many people are looking to improve their personal finances, either through small savings or trying to reduce debts with financial institutions. Being able to maintain a balance in personal finances is essential to have a balanced life and stress less. Here are some ways to plan financially:
How to organize and improve personal finances?
The organization of personal finances are increasingly important topics today. It is essential to adopt good practices to manage our revenues, expenses and investments efficiently. Financial control not only helps us keep our accounts up to date, but also allows us to plan our short, medium and long term goals.
Below are some simple and effective strategies to organize and improve your personal finances, with the aim of helping you achieve financial stability and achieve your dreams.
Write down everything you earn and spend
If you don’t write down everything you earn and spend, you probably don’t really know where you’re spending your money. To be sure of this, it is best to make a budget on paper or on the computer. Write down what you earned and what you spent, as well as how you spent it. That way, you’ll know where you’re spending and where you can cut expenses. It’s a great exercise in financial education !
Save part of your salary
Savings are always important, but planning to save money for a time of need is not easy. Many leave it for the end of the month and think they can put everything left over from their salary into savings, but not always left. One of the ways to make the economy work is to set aside money for savings at the beginning of the month. That money can be used later to buy something you want in cash, increasing your bargaining power for discounts.
Saving part of your salary, you can create goals for:
- Retirement : It is important to set aside part of your monthly salary for retirement. Many companies already understand the importance of this and offer a private retirement plan, which withdraws 5% of the salary for this purpose. People who don’t have that option may choose to put the money into a long-term investment. 5% is a good amount to set aside for this;
- Investments : You should invest some money with the possibility of long-term gains. The money can be used for various financial investments such as stocks, government bonds, investment funds and others.
Put your accounts on automatic debit
To simplify your life and save a few trees by saving paper, put your bills on automatic debit. That way, you’ll never forget to pay any! This is ideal for those bills that are common every month, like rent, water, and credit card bills. You don’t have to worry about payment deadlines! And in order not to lose the feeling of control, you can always check your balance on the bank’s website.
This also applies to those who want to save money : schedule it so that, every month on the same day, an amount is withdrawn from your account and placed in your savings account or in the investment fund of your choice. One less thing to worry about!
Reduce the number of accounts and cards
Having many accounts at different banks not only creates a feeling of disorganization – there are many managers, many numbers and many passwords -, but it also generates damage: all accounts and cards have annual fees and interest to pay if you delay any account ! Don’t let it pile up and simplify. If you can only have one checking account and one savings account, great! If you can only have one or two cards, perfect. Do not exaggerate!
Reduce your personal expenses
Your personal expenses should not exceed 15% of your budget. However, when there are no home or car payments, this amount can be incorporated into personal expenses. In this amount, supermarket, cell phone and internet expenses must be included. If your monthly amount exceeds this, you may be spending your money on obsolete products, such as chocolates and snacks.
Also, be very careful with promotions and don’t fall into the temptation to buy what you don’t need because of that! Take the opportunity to buy only what is necessary, but much cheaper. If you need white shirts for work, don’t walk out of the store with a sequined dress just because it’s half price. Think twice: do you need ten boxes of cereal? From a leather jacket? A heel sandal? Be aware.
Have a margin of safety
Many times we pay our bills in installments and do not realize that, although the money is collected in parts, it will still be collected. The result is several purchases in installments on the card, so much so that the salary ends as soon as the invoice arrives. Don’t let that happen! Never let your bills consume your entire salary, because unforeseen events happen and you may need money.
Reserve some money for yourself
After so many hard rules to follow and tight savings to make, there’s money left over to invest in what you really like. Pay the gym membership, go out for lunch or dinner that month. Enjoy and choose well, 5% is a small slice and must be applied to your happiness.