The purchase credit facilities, and the financing of large goods, combined with the lack of financial preparation of the people, caused a large part of the people to become indebted and with the so-called dirty name. To improve and help, we brought 6 tips for you to do your planning. But take it easy, it’s not complicated, you can do it yourself, just take the steps we will take next.
1 – Define your financial goals
Understanding your goals is essential for yourself. Define your financial goals – what do you want your life to be like five years from now? And 10 and 20 years from now? Do you want to own a car or a house? Or do you want both? At an older age, how do you imagine yourself? Your goals must come first, because they inspire you to complete the next steps and provide a guiding light as you work to make those goals a reality. If you are unsure of the best way to save or invest for your goals, you can also look for a specialized economist.
2 – Monitor your debts
Write down as much as you can about your expenses, what is coming out and what is coming in. An accurate image is the key to creating a financial plan and can reveal ways to further target savings or debt payments. Most experts recommend the principles of the 50/30/20 budget: dedicate 50% of your salary to meet needs (housing, utilities, transport and other recurring payments), 30% for wishes (meals, clothes, entertainment) and 20% for savings and debt payments.
3 – Monitor emergency spending
The basis of any financial plan is saving money for emergency expenses. You can start small by putting in about 5%, but not as if it were a savings, think that this amount can be withdrawn by you at any time, but not for any reason. Using your card in the right way. Good credit offers options when you need them, such as the ability to get a decent rate on a car loan. It can also increase your budget by getting cheaper insurance rates and allowing you to skip utility bills.
4 – Beware of high interest rates
A crucial step in any financial plan: paying off “toxic” high-interest debts, such as credit card balances, payday loans, securities loans and self-rental payments. The interest rates on some of them can be so high that you end up paying two or three times the amount you borrowed. If you are experiencing difficulties with revolving debt, a debt consolidation loan or debt management plan can help you to group multiple expenses into one monthly bill at a lower interest rate.
5 – Invest, even little
- Investing is as easy as messing with these newer smartphones, some people avoid messing with it, others unravel it completely, that is, it is not something complicated, only that there is a lack of interest.
- Investing seems like something for wealthy people or for when you are established in your career and family life. Is not.
- Talk to your bank manager, see what she has for you, or go to a search site, search for investments, you will see thousands of options, most of them online, take advantage of this opportunity and get started now.
6 – Build a large reserve
With each of these steps, you are building a good reserve to protect yourself and your family from financial setbacks. As your career progresses, continue to improve your financial gap:
- Increase contributions to your retirement accounts;
- Fill your emergency fund until you have three to six months of essential living expenses;
- Use insurance to protect your financial stability so that a car accident or illness doesn’t get in the way. Life insurance protects loved ones who depend on their income. Life insurance, covering periods of 10 to 30 years, is suitable for the needs of most people.
- So, are you still going to waste time without getting organized? Take advantage of these tips now and have great results.
Read too: How to set your goals.