Personal financial control in times of crisis
Today, almost every day, we are impacted by news that the crisis is complicated and personal and family financial control of most Brazilian families. In this post I will not go into the merits of signs of deterioration of the Brazilian economic picture as the fall in consumption, rising unemployment or inflation.
I will just consider that we are living in an unfavorable economic time and that your finances may be being affected by it. In fact my interest is in showing you how, even in the middle of the crisis, you can save money.
Although not simple, depends solely and exclusively on your will, after all moments of crisis like this are also moments of opportunity.
Practical Tips for Improving Personal Financial Control
I decided to list some tips that can help you in your day to day financial. It is not necessary to put all of them into practice, but if you do, you will certainly be one step ahead to get through the crisis without major turbulence.
1 - You do not have personal financial control without a tool
To begin with, the first step is to get a personal financial control tool. There is no right or wrong here, as long as you feel good, update the tool on a daily basis and can do financial analysis with it. In this sense, the best options are:
The choice of these will depend on your use of the technology. Speaking personally, I recommend that you develop or buy a personal and family budget worksheet. Below I put an image of the spreadsheet that we developed in the LIGHT so you have an idea of how it should be:
As I said, the main issue here is that you can control the inflows and outflows of your accounts, have a look at your invoices and your balance month by month.
2 - Learn how to cut unnecessary costs
With your personal finances organized, it is much easier to figure out where you are spending more and how to reduce unnecessary costs. A simple example is analyzing an expense breakdown chart, seeing the groups that have a higher percentage and analyzing the postings for the group in question.
In our example above, you can see that for this reality you spend more on housing and food. If we were going to a more in-depth look, we might find out that spending on food is high for many meals out of home in expensive restaurants.
This is a great opportunity to reduce costs and organize personal financial control.
3 - Set goals to save
A successful personal financial control is one that gives you a full life doing everything you like in the present, but that is also concerned about the future.
In that sense, it is important that you have a balance between what you spend and what you save. Because it is much easier to spend money than to save (especially in times of crisis), working with goals can help you a lot in this process.
By setting these goals, you can track everything in your receipts and payments flow on a monthly basis:
In my opinion this is one of the most important tips. If you set tangible goals for this money saving you will probably have more success. This goal can range from savings to retirement and a reserve fund to savings to buy a car or pay a wedding.
4 - If you can save, invest
Now, if you can take a routine where you can save 1% to 50% of your salary, you should keep in mind that stopped cash loses value over time. Once again I will not go into the details, but inflation will push prices up over time and your "stalled" money will not be able to buy the same things over a period of time.
So it pays to understand how to invest that money that you can save on a monthly basis. With high inflation, the government usually ends up raising interest rates, which provides good investment opportunities. Just so you have an idea of some of the better known options:
- Savings (not recommended)
- CDB (Certificate of Deposit) or CDI (Certificate of Interbank Deposit)
- Treasury Direct
- LCI (Letters of Real Estate Credit) or LCA (Agribusiness Credit Letters)
- Stocks and Investment Funds
- Among other possibilities
Now which of these to choose will depend on your risk profile and the money you have to invest.
5 - If you can not save, be careful with loans and clear your debts
To close our most important tips, let's get on the dark side of personal financial control that are debts.
Usually they are obtained with loans, which can sometimes be automatic at your bank, such as overdraft and that can cause a small amount to become a big debt over time if you do not take care.
So if you realize that your salary is not going to be enough to pay all your bills and you have to apply for a loan, hurry to pay it off as soon as possible, otherwise a small debt can turn into a snowball.
The Beginning of Personal Financial Control
As I said throughout the post, the beginning of personal financial control is a good one. personal and family budget worksheet. It is this tool that will give you all the inputs for decision making and monitoring of your finances.