Contrary to what may seem, financial stability depends on relatively simple actions - basically planning and discipline. Organizing finances is the first step towards achieving dreams and projects. From day-to-day initiatives, anyone can achieve financial equilibrium and become a second stage investor. Here are some tips:
1 - Budget daySet aside one day a month to organize your financial life. Assemble a spreadsheet with fixed expenses, debts, payments, occasional expenses. Also enter all your income, such as salary, receipt of rents, eventual gains etc. Assemble your monthly budget, matching expenses to revenue. The ideal is that there is always 10 to 20% more left over.
2 - Define prioritiesIf the budget is in an imbalance - expenses greater than revenues - the way forward is to reduce expenses immediately. Set priorities and eliminate what is not essential. This adjustment period requires discipline. Remember that it is necessary, but transient. Going to the restaurant, sightseeing, traveling, or buying superfluous can wait until financial equilibrium is resumed.
3 - Learn how to use moneyMost people worry about learning how to make money, but not how to use it. There is a big difference between the two situations. Everyone knows stories of businessmen who have accumulated fortunes, but who ended up broke. Nothing is better than learning from the mistakes of others. Read, study, search for finance information. There are several books, magazines, newspapers and websites that translate "economics" into everyday language.
4 - Set financial goalsDetermine a value, time frame, and financial goal to be achieved. Organize yourself to create the conditions for the goal to be met. Example: buy a car worth $ 30 thousand within two years. Review your budget and see how you can rearrange it to get the car on time.
5 - Always saveThere is no organization of personal finances without saving. It is the capital reserve that allows the person to face emergency situations or seasonal crises. Consider as a commitment the task of saving 10% to 20% of your monthly income.
6 - Learn to investFrom a given level of financial organization, the person has resources for investment. The bills are up to date, there are no outstanding debts and the goal of spending less than earned has turned into law. It's time to make money work for you. Look for investments according to your profile. To do so, ask the help of your bank manager, rely on the help of companies that specialize in providing this type of advice or if you are able to take on the task of taking care of your own investments.
7 - Limit the maximum indebtednessWhenever possible, opt for spot purchases. Control the craving for consumption, pool resources, and get the product or service paying in one go. This increases the bargaining power at the time of purchase, allowing discounts and other advantages (gifts, extra points in loyalty programs etc). Use financing only for specific situations like buying a property.
8 - Escape from easy (and expensive) creditLines of credit such as overdraft and credit cards pose serious threats to any financial planning. The interest rates are higher and the person is seduced by the ease in contracting the debt. Remember that easy money costs a lot more.
9 - Use portabilityAnyone who has a loan or loan agreement can take advantage of portability. With it, the debtor has his debt "bought" by another financial institution, which offers him more favorable payment terms. The person exchanges expensive debt for a cheaper one.
10 - Discipline, first of allNone of the above tips will work if the person lacks the discipline to organize their finances. Tracking the planning is key. The temptations of consumption arise at every moment and one must remain permanently focused on the financial objective.
Start now to organize personal finances. With these tips, the task will be less complicated!