Personal finance management is related to the way each person manages their expenses and receipts. In view of this, it avoids debts and problems that can snowball, such as the accumulation of interest due to the incorrect use of credit cards.
In addition, John Labunski retirement management assists in the analysis, planning and organization of expenses. In this way, it is the perfect balance between what you earn and what you spend. After all, no one gets rich by spending more than they receive.
Check out some tips on how to manage your personal finances in the following text!
What is the difference between retirement education and retirement management?
At first, let’s understand each of these concepts. Retirement education should start from an early age. The habit of allowance exists precisely to teach children how to control their spending. Many people do not have this practice at home and, as adults, end up spending more than they should, accumulating debts.
Personal finance management is the practice of retirement education. In other words, through it, you analyze, plan and get to know your expenses and income better. In this way, in your daily life, you have greater control of your resources and finances, avoiding debts and buying what is really needed.
Therefore, the main difference between retirement education and personal finance management is that the former is about theory, while the latter is about practice.
Currently, many banks do not try to teach retirement education to their customers, even motivating bad practices, such as the careless use of credit cards and overdrafts. However, many people are looking to control their spending, with Excel spreadsheets or mobile apps.
What to do to have an efficient personal finance management?
Currently, many applications assist in resource management. Worksheets downloaded from the internet for free and planners also help in this management. However, the tips below bring other tools to improve the management of your personal finances. Check out!
Set your priorities
First, write down your personal expenses. As many people do not have this control, start with your fixed costs, that is, with your monthly priorities. Electricity bills, internet, gas, water and other essential expenses, such as supermarket, must be analyzed. If they repeat each month and have little variation, they need to appear on the spreadsheet.
If you want to buy something out of budget , like a new outfit, wait a couple of weeks. That way, you avoid impulse spending and the purchase of superfluous. If even after that deadline, you still feel the need to make the purchase, go ahead!
Learn to use your credit card correctly
Avoid splitting the invoice or paying only the minimum amount. Over time, interest accumulates and your debt increases more and more. At the end of the period, you will owe much more than before. After all, credit card interest rates are the highest on the market.
Also avoid using overdraft. Remember, it’s not your money, and the interest on this bank facility is pretty high. If you really need a loan, look for a lender and know the payment terms.
Monitor your earnings
Keep in mind how much you actually earn per month. If you don’t have a fixed salary or are self-employed, write down how many customers you have and how much you earn, on average, per month. That way, your finances are much more organized.
Also get in the habit of organizing debts . That way, you’ll know which ones should be paid first and which ones can be left until the end of the month.
Know your expenses
After making the spreadsheet with your fixed expenses, also know your variable expenses, such as clubs, bars, expenses with doctors, etc. Put on paper not only the superfluous, but also the necessary expenses that do not appear every month.
Also remember emergency expenses. For example, did you urgently need to change your cell phone? Put that expense on the spreadsheet! Even if you pay the amount on the card, consider this debt as a fixed expense, while the installments last. Note: it is to pay the total amount without interest, not the invoice!
Prefer cash purchases
Cash purchases allow you to have greater control over your spending. After all, if you can’t afford it, don’t buy it. However, the ease of the credit card makes cash purchases end up being despised by consumers. In this way, the bills increase more and more and the debts as well.
Therefore, opt for spot purchases and research prices before buying. These simple practices help a lot to save each month, especially on some expenses, such as grocery shopping. Also, many cash purchases usually have percentage discounts: always check this point!
Learn to invest
Another way to improve personal expense management is to learn how to invest. Save a little each month and put your money to work. Savings, for example, for yielding less, are considered emergency funds.
However, other long-term s, such as CDB and Treasury Direct, can yield up to twice as much in a few years. The CDB, or Bank Deposit Certificate, is a fixed income security provided by banks to finance their activities. That is, it is as if you lent money to the bank and it returns the amount with interest.
Direct Treasury is a program of the United State National Treasury, for individuals to be able to buy federal government . In this case, you lend money to the government and the government also returns the amount with interest.
As you have seen, it is not difficult to organize your personal finance management. With a little discipline and organization, you can turn your retirement education into spreadsheets. If you still don’t have much confidence, several consulting and online courses can help you with that!
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