By Alexa Gavin
Most people do not know how to manage their finances. This shows that we still have a long way to go in managing personal finances, and the first step is to understand how you have been dealing with your money. Here are some tips on how to do this assessment or visit website.
List All Your Income And Expenses
First, map all your expenses and earnings. This includes salary, extra income, retirement, scholarships, house bills, mortgages, annuities, rent, life insurance, etc. It is also necessary to keep a record of all day-to-day expenses, from purchasing a simple cookie to the purchase of clothes and electronics. That way, you will have precise control of how you are using your resources. See this mapping to know how much of your money is already committed at the beginning of the month. The famous “throw the bills on the table” to have a panoramic view of the challenge.
Categorize Your Expenses
The second step is to separate your expenses into categories. For example:
- food (coffee, snacks, restaurant, etc.);
- household bills (energy, internet, water);
- housing (rent, property financing, condominium fee);
- leisure (cinema, theater, games, etc.).
By organizing your spending in this way, you’ll find out how much you spend in each category and more easily see which one impacts your budget the most. You can also start to reflect on the weights of each expense profile and see which are a priority and which are superfluous, for example.
Analyze Your Net Balance
The formula is simple: income – expenses = net balance. In other words, this calculation will help you find out if you are spending more than you earn. If the result is positive, your financial health is in good shape. Otherwise, if you have a negative balance, you need to reevaluate your habits. Don’t despair; you are becoming aware and scaling the size of the challenge, which will help you start to draw a plan of action. Go straight on!
Evaluate Your Debts
Calculate debts and understand how much they weigh on your monthly budget. Are you able to make the payment without compromising your standard of living? Or are some of them already falling behind because there isn’t enough money? These questions may reveal that you need to renegotiate some of your debt to make all payments. Renegotiation is, urgently, a practice that has to become a habit among Brazilians!
Check Your Savings
To assess your finances, assess how much you can save each month or if you can save anything. Savings are essential for achieving your goals and giving yourself and your family greater financial security. Here’s a catchphrase: prosperity isn’t about how much you earn; it’s about how much you can save!
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