How to control finances?

Just as important as having more than one source of income, stopping losing money is a key attitude in the process of controlling finances. It is only natural that people expect to have an X amount of money, then start to have more elaborate control and even to start investing. And for that, they are looking for other ways to make money, however, one must first know how to control finances.

Step by step how to control finances

If there is no financial control of the little, there will hardly be when the income is higher. In this graph of the Brazilian Investor X-ray, research conducted with the support of Datafolha, it is possible to notice that the main complaint of Brazilians about low saving capacity is related to financial conditions.

That is, people do not invest in a lack of money. However, if your goal is to have money then visit today!

All you will read below is not just for the sake of knowledge, it is information to put into practice. The main tip on how to control finances is to practice the tips.

Do you close the month in red?

In 2017 about 60% of Brazilians spent more than they earned, research by Serasa Experian demonstrates how there is a need to learn how to handle money. Their real need is to manage money so they can make their choices, not the other way around. What is very common is the person receiving the salary and already having a destination for practically 100% of it. And worse, the entire amount is intended for payable accounts.

Almost never a percentage is intended to save. If you identify with this situation, be aware of the tip, which if practiced will change your relationship with money: GATHER YOUR ACCOUNTS.

That’s right!

Take all your accounts, all of them, and write down the amount, the due date in a spreadsheet, calendar, or app. Write down all your fixed expenses like rent, phone bill, water, internet, transportation, mobile, credit card, and food. Also, note the credit and invoices in stores for the coming months. Then also write down the net amount of your salary.

Do the math.

Add all that went out and subtract from your salary. Is there any value left? When you make this account you may have some money left in your wallet or bank balance! Probably this amount was spent on smaller purchases that didn’t fit your budget. They spend little on candy, a home accessory, or for you… Therefore, it will now be necessary to note these expenses as well. Write it all down. Everything that comes in and everything that goes out. Having this insight into your money is the first step to knowing how to control finances.

After all, to control it is necessary to know what must be done.

Make a diagnosis!

From now on look at your bills not just as something to be paid for. After all, the accounts also need to be analyzed. Remember that at the beginning of the article was mentioned the importance of reducing expenses? Well, now is the time! The first tip on how to control finances is to analyze your accounts. Sometimes the phone bill, for example, includes bundles of services that are not even used. Or, the data plan is always over at the end of the month… These are indications that there is a possibility of reducing the plan or spending on unused services.

This analysis should be done with all accounts. Even if the savings is $ 5.00, you can be sure that it is worth the effort to reduce that value. Suppose a person with a salary of 1000.00 dollars has a telephone subscription of 50.00 dollars. This means that 5% of salary is earmarked for a single account, ie the value of the service needs to be evaluated.

Also, consider the extra expenses. Once you have noted all the expenses it is easy to find where the money is intended. Suppose every day at lunchtime, that same person buys a gum for $ 1.00. In a month with 23 working days, will be 23.00 dollars spent only on the gum.

It is these details that must be analyzed and evaluated whether or not they can remain in daily and monthly expenses. It may seem impossible to be able to reduce to save and control finances, but believe me, it is possible!

There is a theory called 50, 30, 20

This theory proposes that the salary should be divided into 50%, 30%, and 20%. If the salary is 1000.00 dollars, then five hundred dollars will be destined for the essential expenses, ie housing, supermarket, internet, telephone, and water power, among others. The 30%, or 300,00 dollars, will be allocated to non-essential expenses, for example, lunch out, clothing purchase, among others.

Finally, the remaining 20% ​​will go to investing and making dreams come true. Remember that if the essential expenses exceed 50% of the salary, probably the standard of living is above the earnings. If this is your situation, more than ever is the time to review what can be cut to save money. It is important that these adjustments are made with a clear objective. There is little point in reducing the extra spending on accounts if the money goes to another payable account.

Set aside the money saved to start your investment. Only then will it be possible to control the finances.

The Golden Rule of Controlling Finances: Pay Yourself First

Once you have identified where you can avoid or reduce expenses, the next step is to set aside this amount. After all this process of analyzing all the money coming in, all the money coming out, and the money that can be saved, set aside that money. Paying yourself first is an essential point of how to control finances. Have the investment as a commitment. Just as the electricity bill is paid every month, so should the investment.

Waiting for the end of the month to know how much will be left before saving is the biggest mistake. This is because there will be hardly any planned. If after all the analysis and cut of extra expenses, it is still not possible to reserve 20% or 200.00 dollars as in our example, but it is possible to reserve 70.00 dollars, then, as soon as next month’s salary falls in the account, withdraw the 70.00 dollars and send to the savings.

If, about more money at the end of the month, then also save the surplus.