Financial control is essential for a more organized, happy and fulfilling life. But this is not always an easy task and some mistakes can overturn your planning. In this post, you will know 5 mistakes that can end your personal financial control and you will understand how to take care of your finances without fear.
Not knowing your spending
Many people do not realize how much they actually spend and this is because they are lost in installments, different credit cards, postdated checks and other debts that can, together, undermine any financial control. In this task you can use a spreadsheet or applications available on the market. It is necessary to note, in detail, all expenses, including those in installments and understand how these are impacting your budget. Even those small amounts spent on coffee or snacks should be noted and recognized in your budget. If you have an automatic financial control spreadsheet, such as GuiaBolso, the task is easier.
Don’t understand the differences between spending
Another mistake in finance is not understanding the different types of disbursements and the impact they have on the budget. There are some expenses that can hardly be avoided, such as rent, food, energy bills and water, among others. These are expenses that, regardless of whether you have income or not, will have to be paid. They can be reduced, but not avoided. Spending on trips to the cinema, going out to bars and restaurants or new clothes can be eliminated. Always try to think if you really need something new and if that trip to a bar or restaurant cannot be replaced by a date at your home, much more fun and economical.
Use credit card or overdraft as income
Another very common mistake is using the credit card or the overdraft limit as income. Many Brazilians arrive before the end of the month without financial resources and use these two means as an extension of their salaries. Subsequently, due to the very high interest rates, ending these debts becomes an almost impossible task. This problem can be avoided with the conscious use of the credit card combined with the knowledge of the installments that you already have to pay and it is also necessary to avoid having too many cards. The overdraft limit can be drastically reduced in your bank just so that you avoid considering it in your budget.
Not having goals gets in the way of financial control
Failing to set goals to cut spending, buy something or save can be one of the mistakes that has been undermining your personal financial control. Now that you already know that knowing your expenses is essential, how about determining percentages to decrease them or even cut them from your life? Later on, you can set goals to purchase something like, for example, a vacation or a change of car, but all with a lot of planning and organization. In addition, you can set a monthly savings target that can be around 5% to 10% of your income and can be used as a reserve for the future.
Not thinking about retirement
Speaking of the future, another very common mistake is not thinking about retirement. So, even though you are very young, you need to start thinking about yours. Thus, it is necessary that in addition to establishing small monthly savings you start to know a little more about investments and look for the best options according to your profile. You can, for example, talk to your bank manager and ask him which types of investments are best for your age and also for your income. However, don’t stand still and always be aware of the best options for you. In this post you saw that mistakes like not knowing the expenses and types of expenses, using the credit card and overdraft as extra income or not having goals and not thinking about the future can compromise your personal financial control. But you saw that with organization, discipline and changing habits you can overcome these mistakes and control your finances. How about reading another article and understanding how to organize your finances in times of crisis?