If you plan to start investing and securing your financial and family security in the future, the best time is now. For this, planning, researching the options available in the market and especially making financial control a habit are essential steps to succeed.
To spend less than you earn, get financially organized to achieve your goals and save, it is important to adopt some healthy attitudes and behaviors. These include recording all your expenses, setting deadlines for your goals, paying bills on time, using your credit card wisely, and avoiding unnecessary spending.
Understand why financial control is important for those who are going to start investing, and see tips for practicing it in your daily life:
Record all expenses
One of the most important steps to start practicing financial control and making it part of your routine is to write down any and all expenses you make. To do this, you can use one of several apps to organize the finances available in the market, an Excel spreadsheet or even the good old pencil and paper.
Regardless of the method you choose, to know exactly where your money is going, you need to be disciplined and write down all expenses, however small. In addition to entering values, specify which budget category the spend belongs to, such as Housing, Leisure, Health, etc. This way, controlling your spending will be much easier.
Set deadlines for goals
Everyone has life goals. What differentiates who can accomplish them from those who only dream about what they want is simple. The first group sets out for action and sets a deadline for achieving each objective, whether short, long or medium term.
Be a part of the filmmakers’ class, taking the time to list your life goals and set a timeframe for achieving them.
Be sure to check how much money you need to have to reach a certain goal and how much you need to save per month and / or year to reach your goal. With that in mind, it will be easier to control where you spend what you earn.
Pay your bills on time
Knowing the due date of your accounts and having the organization to pay them all on time is another financial control tip. If you’re forgetful, try using a paper or electronic calendar to help you, or even set reminders on your phone so you don’t miss deadlines.
Electricity, gas, internet and telephone bills, for example, can also be put into direct debit. If you choose this alternative, make it a habit to check your balance to see if there is enough money for the debts.
By paying bills on time, you avoid inconvenience such as having your name on credit protection or having to pay interest because of late payment.
Be careful with the credit card
It is undeniable that the credit card is a form of payment that makes life easier. However, when the sport is misused, the results can be disastrous. If you have a hard time keeping track of your finances, leave the “plastic money” at home and prefer debt or cash to pay your bills and purchases.
If using the credit card is essential, avoid installments and in no way pay only the minimum of your bill. The interest rate charged is one of the highest in the market and can significantly affect your financial life.
Cut unnecessary expenses
In the daily rush, it is very common to make expenses that are not strictly necessary. A coffee after lunch, a dinner at an expensive restaurant, a taxi to go out with friends.
One luxury at one time or another does not compromise the budget. The problem is when unnecessary spending consumes much of the income and affects your ability to save to invest.
The first step in cutting back on unnecessary spending is to make a careful analysis of your budget and monthly expenses. Identify those that are essential and those that are expendable, such as the gym you never go to or magazine and newspaper subscriptions you never read.
Cut these expenses and then move to reducing expenses in other categories, such as leisure and travel.
Pay off your debts
Those in debt should make it a priority to pay them off and catch up. Start with higher interest-bearing debts such as overdraft and credit card.
If you have arrears, negotiate with a plan for repayment, always evaluating your chances of paying off the installments.
In some cases, it may be worthwhile to swap a higher interest debt for a cheaper one for relief in rates. Selling a good, like a car, may be an alternative to getting out of the red.
Have an emergency reservation
To invest in peace of mind, ensure your and your family’s security by creating an emergency financial reserve.
This fund, which should preferably be equal to six months of monthly expenses, can be used in the event of unforeseen circumstances such as family illness or loss of job. To be able to withdraw any amount when you need it, put in an investment that offers liquidity.
Financial control is one of the main allies of those who want to start investing. Knowing exactly what goes in and out of your account and cards makes it easier for you to spend less and better, and cut waste and excess, some of the most important habits changes.
In addition, investing in financial control allows you to use your money for life goals that are really important to you and your family, such as a vacation trip or a new apartment.