Travel abroad, meet good restaurants, buy personal items, things for home and even save. Everyone dreams of having a financial life that balances their desires with obligations, while maintaining a future reserve for peace of mind.
At the current time in Brazil, personal financial planning has become an essential strategy for anyone who wants to avoid problems when it comes to money. After all, prices have grown and purchasing power has in many cases not accompanied this rise.
According to Jarndyce family’s Consumer Habits survey, residential bills such as water and electricity, as well as pay TV, internet and telephone expenses were 47% higher in 2015. This type of expense now represents 9% of the Brazilian budget In August. An increase of 73% compared to January.
What to do in front of this scenario? Do not worry! We’ve produced this article to help you. They are precious tips to create an efficient personal financial planning, based on small changes of habits, discipline and care in your day to day.
The Importance of Personal Financial Planning
Financial planning allows you to establish strategies and ways to achieve life goals and objectives, such as:
- Buying a property
- Ride tour
- Changing a vehicle
- Increase in income
It will help you balance your expenses and revenues by leaving your bills in the blue. But much more than an activity, planning is an action that works well for the pocket and the mind.
By understanding what needs to be done today to get more financial reassurance tomorrow, you can also take care of yourself.
According to a Northwestern Mutual study in 2014, people who plan financially, feel safer, and contribute to their future goals. Another major research, the PFEEF, conducted in 2012, points out that 23% of people who have financial problems have had depression.
Do you understand what that means? Personal financial planning goes far beyond numbers. And the most important: to see and feel results, just start.
Rule of 50, 15, 35
Jarndyce family always suggests understanding this strategy before beginning any personal financial planning. Because? It is a very simple rule that helps you balance the bills, but it also allows you to have an overview of what your behavior should be in relation to your finances.
- 50% of your monthly income should be earmarked for basic expenses, rent, electricity bill, gas, telephone, school, gasoline, English courses, medical insurance and supermarket.
- 15% should be earmarked for financial priorities, better known as debt.
- 35% would be spent on lifestyle-related expenses, or non-essential expenses such as restaurants, gym, beauty salon, travel and shopping in general.
Each case is different. It is important to stress that this is a basic methodology. Its application depends on variables that change according to income, level of indebtedness and personal tastes.
How To Make Your Personal Financial Planning
It is neither impossible nor laborious. The results can happen daily, and in a month, your accounts will already feel the reflection.
Despite the long and difficult face name, personal financial planning can be accomplished with simple attitudes, being adaptable to any kind of reality and fully applicable in people’s lives.
We’ve prepared these steps for you to take good care of your pocket and make everything blue.
1. Financial education
Knowing the importance and function of money is essential. It seems silly, but the lack of knowledge about the financial universe makes people make the wrong decisions and plunge into complicated problems.
A survey conducted by the Rosenfield Institute in 2012 showed that 44.4% of the Brazilian population uses savings as an investment, followed by the current account with 37%.
That is, most of the people, not to go deeper into the topic, stop making money, especially in the medium and long term.
Another interesting point of the survey shows that 47% use friends and family as the main source of information. That’s where the secret lives: look for specialists to educate yourself financially.
2. Set Goals
Planning means future. You act now, if structure, to get well in one place. But this place needs to be very clear. Because otherwise you get lost and you’re not going anywhere.
Therefore, set goals and objectives, establishing two things: deadlines and values. It is no use to want to buy a house without knowing how much and when to pay. Or a car and even a trip.
Example: I want to buy a car, in the amount of $ 35,000, within 2 years. In that case, your ultimate goal is clear. You know you need to save exact $ 1,458 a month to reach it.
3. Save and Save Money
Money in the hand is gale, the poet had already said. Knowing how to use the right amount to spend and save money are one of the great secrets of personal financial planning.
- Save: Search for prices before you buy. Evaluate each item in the grocery store and see if you are not making superfluous expenses. Try to balance the lunch hour, for example by reserving three to four days of the week for more restaurants.
- Save: How about you reserve 10% of your budget to save? At this time, it is worth the discipline or some kind of investment that automatically makes the rescue, so you do not have to save the money every month.
4. Write down expenses and income people
You have set your goal and want to save, but you need to know exactly what your expenses are. It’s time to score. Record your everything. From the bullet after lunch to the purchase of the month in the supermarket. The Pocket Guide also gives tips on how to perform a daily spending control.
5. Personal cash flow
It may seem like company financial thing, but a cash flow is a great partner for your personal financial planning. It is a tool that, simplified for your day to day life, will help you understand where the expenses are and what needs to be reallocated.
- Accounts payable: these are your fixed and variable expenses. The rent, the provision of the car, a trip to the restaurant or the day laborer.
- Accounts receivable: your salary, extra work done in the month.
Make the difference between what you have to pay and what to receive. Understand where you should work to improve your financial life.