How to reduce expenses and start investing?

There is only one recipe for saving money and accumulating assets: reduce expenses and start investing as soon as possible! But this process can be very arduous for some people. If that’s your case, know that it’s perfectly possible to start slowly, cutting some superfluous spending and adopting good financial habits.

In this post, we’re going to give you simple tips on how to gradually reduce expenses to be able to invest and present an advantageous investment option for all profiles: private pension! Follow along.

8 tips to reduce expenses and start investing now!

There’s no way, if you want to invest money to secure your future, you’ll need to cut some spending . But, if you plan it right, you can do this without sacrifices. Check out some ways to reduce expenses and make more resources to invest.

Make a financial plan

There is no way to cut expenses without planning very well . Therefore, the first step is to create financial planning, listing all your fixed expenses and setting short, medium and long-term goals . This will help you better manage available resources and manage your finances more intelligently.

organize your budget

Another fundamental tip is to control the budget , raising your income and expenses, and organizing them in a spreadsheet or app. You need to clearly visualize how much money comes in and goes out each month and make sure that this equation is not out of balance.

Identify your priorities

Unfortunately, it is not possible to spend on everything you want. It is necessary to establish financial priorities , seeking to reduce or eliminate excesses to have more money. A good start is to classify your expenses into essential, important and superfluous, for example. Thus, you can understand what can and cannot be cut.

Renegotiate and settle your debts

If you have outstanding debts, you need to pay them off before you start investing. The tip is to renegotiate debts with your creditors , seeking more favorable payment terms and conditions. Therefore, look for your bank or credit card company and reach an agreement as soon as possible.

Change your spending habits

Another precious tip is to adopt more sustainable consumption habits . Avoid giving in to consumerism and impulse purchases, cut unnecessary expenses, cancel subscriptions and services that you don’t use so much, opt for brands with better cost-effectiveness, etc. Anything goes to consume smarter and save!

Search and compare prices

Searching and comparing prices from different stores also helps to save money . Shopkeepers are able to negotiate more competitive prices with suppliers and thus offer discounts and promotions to customers. Because of this, there can be a lot of variation in the market. With the internet, searching for prices has become much easier, and you can use this practicality to save at the end of the month.

Make purchases with cashback

Another convenience offered by technology is cashback platforms, which “return” a percentage of the money spent in the form of credit for future purchases . This is an excellent strategy for reducing expenses, as part of your expenses returns to you. It’s just not worth buying unnecessarily, just to use the cashback.

Use discount coupons

For those who buy a lot on the internet, the best tip is to follow the offers of virtual stores . They usually offer discount coupons, which are a great way to save on everyday purchases and make your money go further.

Why is investing the best option for your money?

So far, we’ve talked a lot about ways to save. But it’s not enough to save, you have to invest and make money . This is indeed the smartest way to earn more money. And the best: investing is for everyone, as there are assets and funds aimed at different investor profiles.

In addition to protecting capital, preventing money from losing purchasing power due to inflation , investments help you achieve your financial goals , build long-term equity and guard against future crises. Investing leads to financial independence and it sure is rewarding!

Private pension is the best investment option

Now, maybe you’re wondering which is the best investment. One of the most advantageous alternatives on the market is private pension . It is a simple way to invest your money, whose objective is the accumulation of assets over time.

In general, pension plans are associated with a retirement supplement, but this is not a rule: they can be used for different financial purposes .

Some of the benefits of private pension are:

Asset diversification

Today, there are numerous pension fund options . Resources from this type of investment can be invested in more traditional assets, such as fixed income , or even more daring ones, such as variable income (shares, for example).

Therefore, pensions are a good way to diversify your investment portfolio , protect your capital and boost your income.

Absence of quota eaters

Another great advantage is that private pension plans are not subject to collection of quota eaters, a kind of half-yearly income tax advance .

The quota-eating tax is levied on several investment funds, at rates between 15% and 20% , depending on the term. It receives this name because the rate is discounted in the form of fund shares, preventing them from continuing to yield.

Tax benefits

Pension plans also offer several tax benefits in relation to Income Tax. The beneficiary of the plan can choose whether the taxation will be progressive or regressive, according to its objective – whether long-term or short-term. Depending on the type of taxation and the time the money was applied, the savings can be huge !

The PGBL can be deducted up to 12% in the Income Tax . While the regressive table can reach a rate of only 10% at the time of redemption.

Easy portability

Portability is another advantageous aspect of private pensions. If the holder regrets having made a plan with a certain institution, he can migrate to another without prejudice or bureaucracy , as long as the change is for the same type of plan ( VGBL or PGBL ). It is also possible to change pension funds within the same financial institution, in search of the best rates and conditions.

It is worth noting that portability can only be carried out after the grace period .

Easy estate succession

Private pension is an excellent option for property succession, as it does not enter the inventory . The money invested goes directly to the holder’s beneficiaries, in a less bureaucratic way than other investments.

In addition, in the case of VGBL, there is no ITCMD charge (Tax on transmission of death and donation) charged in some states, since the legislation views this type of pension plan as insurance, not taxable. This makes private pension an interesting alternative to reduce expenses in the transmission process.