How to manage your personal finances

Financial control is not something just for companies. It is also necessary inside your home!

This is the only way to know your income, expenses and identify what can be improved to have more money left at the end of the month.

After all, this niece means quality of life, whether saving it to travel with the family on vacation, investing or even making an emergency reserve. All this means more peace of mind and new possibilities.

In this article, we will help you to have more control over your finances to have a better quality of life within your budget. Read more!

What is financial control?

The basis of personal financial control is the recording of all capital inflows and outflows. This way, you can know what is happening with your budget in detail.

You can find out, for example, how much money is earmarked for your children’s education, how much is being invested in your own career, what are the monthly maintenance costs for your home, among others.

Having knowledge of all your expenses, there is no more chance for surprises with the amount of your credit card bill or other bills.

In addition, financial control allows you to maintain good financial health and peace of mind to plan for the future.

After all, financial control is not about cutting costs and saving money, it’s about using it smartly and strategically.

What to include in the planning?

The first step towards good personal financial control is to know your financial life in all its parts. That means understanding where the money comes from and where it goes.

To do this, make a list of all the important information.

You must include:

  • income: here are your family’s salaries, commissions, earnings from investments, etc.;
  • expenses: food, bills, taxes, school fees, guitar course fees, etc.;
  • investments: applied values;
  • other financial commitments: credit cards, loans, financing, etc.;

How to do personal financial control?

Know your budget and cost of living

You already took this step when we talked about what items to include in your planning. Notice all your monthly expenses and all the money that comes in. This is fundamental to having good personal financial control.

Having this knowledge will also help you understand what your cost of living is, that is, how much is spent on bills, food and other basic items.

Thus, it will be possible to understand how much money you need and how much you may or may not have left over from other activities, such as going to the movies, for example.

Know your extra expenses

We just mentioned going to the cinema, but maybe you enjoy buying a cup of coffee or ice cream every day at work, having a beer with colleagues after work, getting your nails done every week, or taking the family to your club’s games favorite.

Whatever it is, everyone has their pleasures that generate extra expenses and we’re not going to tell you to cut them out. They are part of your quality of life!

But knowing your extra expenses in depth is vital for your personal financial control. So, if you want to go on a big trip at the end of the year, you already know how you can save.

Giving up some fun for a while can be worth it when the goal is to have an amazing vacation.

Categorize your expenses

Separating spending on basic needs and bills from your extra expenses is useful to know where your money is going and how to save it, if that’s what you want.

But you can go further and create subcategories for these expenses. Thus, you can find out how much was spent in the month on restaurants and delivery apps specifically, for example.

That way, if your budget goes out of whack in a given month, you can easily figure out what caused it.

compare prices

Impulse purchases are the biggest enemies of your personal financial control. Always try to think carefully about your expenses and how it will affect your budget in the short, medium and long term.

Also, comparing prices should be a habit whenever you need or want to buy something. Don’t spend more money than necessary just because you didn’t see that the product was cheaper elsewhere.

But don’t just make comparisons between one product and another. Knowing the prices of items in the supermarket will help you understand when they are expensive or cheap.

Understanding the best time to buy certain vegetables, greens and fruits is also a good idea.

Think carefully about your purchases

Your wishlist on Amazon or your favorite shopping site can be huge. But try to ask yourself if you really need these items, how you will use them and if the value will be worth it for what you will receive.

As we said, impulse purchases are your biggest enemy. Therefore, try to analyze your needs and how your budget can support them.

Don’t Lose Focus: Set Goals

The best way to stay focused while you’re trying to save is to never lose sight of the goal. Thus, all your decisions are goal-oriented.

You might want the latest smartphone model, for example, but buying it will take you further away from the goal. This kind of thinking is useful when making decisions.

Your goal could be a trip, a new car, or any other big desire for which small desires are worth sacrificing.

To keep this in mind, many people make so-called “Vision Boards” or “Dream Boards”. The idea is to put your goals on a board that is visible in your home. That way, you’ll always have your goal right in front of you.

You can also allocate a predetermined portion of your salary directly to this dream.

The idea is that, as soon as the salary is in the account, you put it in the Direct Treasury , in Savings or in another form of investment. After all, this money is not yours, it belongs to the goal.

In addition, this tactic makes your money earn interest instead of staying in the account.

Beware of annual expenses

Get ready now to deal with IPTU, IPVA and insurance. These expenses become a big problem when they are not foreseen. A good idea is to save money specifically for them throughout the year.

learn to invest

Investing seems complicated. After all, there are many things to learn.

However, the time you spend learning more about it will be well worth it. Learning about investing will teach you how to take better care of your saved money.

Thus, you will be able to choose the best place to store your reservations for the future.

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