Knowing how to make a personal budget to plan finances has been a great challenge these days. Especially in the midst of a national and global economic downturn. This is because the decline in the purchasing power of the population and the increase in unemployment and inflation have affected the pockets of most Brazilians.
In this context, the personal budget is the best way to take care of your money and significantly improve your quality of life. Thus, you worry less about monthly bills and you can achieve your future goals, such as the dream house for yourself.
For those who want to keep their accounts up to date and achieve a healthy relationship with money, having a personal budget is essential. Do you want to know how? Follow our publication and learn how to organize your finances and achieve your goals!
What is the personal budget?
The personal budget is a tool that allows you to carry out financial planning, in order to anticipate expenses and organize finances so that they are balanced. That is, it works as a forecast of your income and expenses during the period.
In practice, we can say that this methodology provides an estimate of how much you will earn and how much you will have to spend per month to reach your goals. This article is considering the most efficient application of money available. Generally, this control is carried out from the complete registration of the balance of the bank account and of the investments. In this way, it is possible to have a complete overview of personal finances.
Thus, it is possible to analyze costs, make more assertive decisions and prevent unforeseen events, as well as know which expenses most affect your income and consumption habits that are harmful to your pocket. In this way, there is a way to improve financial management and maintain good financial control in your daily life.
How important is it?
When it comes to money, many people have no idea how much they earn and how much they spend each month. However, for those seeking control and financial independence, it is essential to know if the monthly expenses are compatible with their earnings.
In this case, the personal budget is an essential practice for those who want to have better results, avoiding getting into debt or becoming financially complicated and establishing a healthy relationship with their own money, which will be spent within the possibilities, without unnecessary debt.
Those who do not plan financially live on money and under constant pressure, needing to change their shopping routine, their goals and even depriving themselves of some pleasant habits precisely due to lack of resources.
Therefore, creating a personal budget allows greater control over finances and a balance to achieve your goals and follow a path of financial prosperity.
How to create a personal budget?
Now that you know what a personal budget is and how it can positively impact your life, it’s time to put it into practice and create your own.
First, it’s worth noting that organization is essential to ensuring a healthy financial life. Without a doubt, putting your budget on paper, even if you do not have a fixed monthly income, is the key to the right path. Below is a step-by-step guide to planning a successful personal budget. Verify!
Identify if there are past due invoices
Paying off overdue debts is the first attitude that must be carried out in order to have financial health. That’s because they often have high interest rates and fees that are posted throughout the days the payment is due.
If it’s not possible to pay all your bills right away, prioritize paying those that are essential to maintaining your standard of living, such as water, electricity, and gas. In addition, it is important to categorize your fixed and variable expenses, as well as enter your direct debit accounts, in order to keep your personal budget organized.
Remember that when you are not in debt, it is easier to control your money and save it to achieve your goals, without harming your quality of life.
control your finances
Oddly enough, many people want to create a personal budget without realizing how much they earn each month. Knowing what goes in and out of your account allows you to closely monitor your financial situation and allows you better choices with your money. In this case, it is recommended to keep a spreadsheet of monthly expenses and write down all the expenses and income throughout the month.
This will help you manage your finances and avoid unnecessary expenses, keeping your financial life more organized. In this way, you will have more clarity about what your monthly budget is, knowing if your expenses adjust to your reality.
Once you know all your income and expenses, it’s time to define what you really want to achieve, in financial terms. That is, establish your priorities and your goals in the short, medium and long term to direct your approach.
Without prioritizing, organizing and committing to saving money becomes meaningless, and suddenly you’re off plan. That way, list your financial goals and write down everything you need, so you can gain more discipline and focus to stick to your budget.
Use technology to your advantage
A great tip is also to take advantage of the benefits of technology to plan and catch up on bills. Digital accounts and applications, for example, are useful not only because of the comfort and economy they offer, but mainly because of the flexibility in their use.
With these tools, you can map all expenses simply and quickly, manage your finances efficiently, and plan a personalized budget, allowing for more strategic decision-making.
change some habits
There is no way to discuss financial budgeting without mentioning changing personal habits. After all, having a lifestyle incompatible with the financial situation is the main reason why many people get into debt.
In this case, it is best to rethink your choices and make some spending cuts. Avoid unnecessary purchases, compare prices, reduce credit card purchases, limit daily spending, make investments, be more disciplined and stay financially organized. This can certainly help in controlling finances.
Have a reserve fund and insurance
Another important aspect of personal budgeting is the need for an emergency reserve and life insurance. They guarantee more stability in times of instability and convey security for greater peace of mind in emergencies. You can even do the life insurance simulation now, just click below, it’s free!
So figure out a percentage of your monthly earnings and set aside about 10% for emergencies. It is worth remembering that this percentage can be readjusted according to your priorities and needs.
By following these tips and other personal budgeting content, it is possible to have a balanced financial life with a better quality of life. After all, the financial situation is reflected in the physical and emotional health of people, and knowing the subject allows you to make more balanced decisions.
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