Everyone’s dream is to have a balanced financial health, with debts paid and money left over to be able to realize personal dreams and make investments. It sounds like utopia, especially for those who don’t have a pompous salary. But believe me, it is possible to coordinate your financial life so that you don’t have to choke each month.
If you have problems dealing with money, you are definitely not alone. But with planning and a dose of determination, you can go over and organize your financial life.
For this we will give you six tips that you must follow for good personal financial health.
Track income and expenses
Whether on a paper or spreadsheet, you need to be aware of how much goes in and out of your account every month. This is a basic task to know if you are spending above your limit, or even identifying the share of your income that goes away with buying superfluous items. From this you will be aware of how to adjust your financial life to be free from the grip.
Get rid of debt
More than half of Brazilian families started 2019 in debt. When it comes to financial control, the number one priority is getting rid of debt. To do this, it is recommended that you set aside at least 20% of your monthly income to pay them, starting with the highest interest rates.
Caring for the standard of living
If renting your home compromises more than half of your income, you may need to review your standard of living. Living on the edge can be dangerous, as you have other fixed expenses (water, electricity, internet, etc.) and you are virtually out of money for any unforeseen events, which can cause major problems.
Have an emergency reservation
Have you ever stopped to think that every month an unexpected need arises and you need to spend more than anticipated? This is why you must create an emergency reserve. And even if it is eventually not used, it is better to be safe than sorry. This extra money can be providential, especially in health-related emergencies.
Once you follow these steps and ease your financial health, look for a method of your own to make investments. An insignificant portion of your salary can provide a dream come true or guarantee your future financial stability.
Avoid credit card and overdraft
With the highest interest rates on the market, the credit card and overdraft are real snowballs. If you cannot maintain the control you need, try only cash purchases, either in cash or in debt. And if you have card debt, renegotiate it immediately and be disciplined to meet the deadlines.
If borrowing is a necessity, it is crucial that you look for lower interest arrangements such as private payroll loans.