Author: Pedro Ygor Rodrigues Mesquita
Most people think that we just need to earn as much as we can to get our ambitions such as buying flight tickets to travel around the world or another one you yearn for so hard. Do you agree with them?
Well, I have to admit that they aren’t entirely wrong, but would you believe me if I said that getting a lot of money isn’t enough for that or even that you can achieve your goals by not necessarily earning as much as you think?
In this blog, I’m objectively going to tell you some practical ways for you to grasp it easily by following a few steps. We aren’t going to uptake abstract concepts and common-sense tips as we’re used to, but apply true and known knowledge in our financial life. Follow me up and let me show you!
First of all, we must talk about Financial Control, which is a really necessary set of habits we’ve got to have in mind to achieve our goals by changing our consumption habits. After all, how could we change something that we can’t see?
So it’s a process of materializing your transactions for you can change your habits by looking at what you’ve done. Thus, long story short, Financial Control’s basically defined by a cycle of 4 habits: planning, recording, verification and analyzing.
- Planning: Firstly, we should set time aside to think about our consumption habit monthly, considering what you’ve been doing, paying, eating and so on in the last months. Then, you have to make a budget, including all the things you’ve just thought about, recognizing what has been crucial for you so far and what is going to be from now on.
- Recording: Self-explanatory, it’s just the action of registering your expenses and incomes somewhere. It’s simple but is going to be fundamental for the other habits work out. Without doing this often and well, everything might be hard. But relax! I’ll show you how you must do it!
- Verification: What’s the point of recording everything if we won’t check them? It’s very important to compare what you planned to what you’ve done to keep yourself under control. You’ve always got to look at your purchases to see how much and how often you can still spend.
- Analyzing: In the end of the month, take a look at what’s worked out or not, has everything occurred the way you thought? Why? What can get better? I’ll teach you some simple hints to find the answers for these questions!
All the previous habits are important, they’re part of the process of converting data into usual knowledge, which will let us see our standards and consumptions more clearly and visually.
Source: Author
Okay, you might’ve understood everything so far, next we’re finally going to learn how to apply these things in practice!
Practically, we have to adopt some way to register our budget and follow those habits, and I suggest you to take up a cash flow worksheet or a control financial app.
Thus, you must recognize some good options, and they’re those ones that have expenses and incomes by category, as well as having a good view of them with graphics or tables to facilitate the process of budgeting and analyzing your acquisitions.
For apps, I recommend anyone that has those characteristics, but I particularly indicate Organizze and mainly Mobills. They’re very great ones that have got a satisfying free version what will allow you to make your financial life organized.
As for worksheets, I dropped off some good ones on Google Drive, there are 3 options classified as easy, intermediate and hard. It means their complexity of use, the higher it is, the more setting it has. Therefore, you decide which one you prefer. They’re on the link bellow:
https://drive.google.com/drive/u/2/folders/11T15kEZLAFz5AOvXQ7ADyU2mh5fH06cE
If you don’t know which one is best for you, take a look at some of their positive e negative aspects:
- Cash Flow Worksheet
- Positive
- It can be accessed offline
- You can make graphs and calculations on your own
- It’s totally free
- You can build it or choose one online
- Negative
- Your software may get slow over time
- You need some knowledge about the software to understand the spreadsheet
- It’s easy to lose information, you just need to click somewhere, then you won’t notice that you’ve deleted something
- Control Financial App
- Positive
- More practical than a worksheet
- Calculation and graphs are automatic
- You can receive notifications about your planning
- There are good graphics at your disposal
- Negative
- You must subscribe to a premium version to use all sessions
- Income and expense categories may be limited
- You can only access some resources online
- You can’t change anything on the app, just use what’s available
After picking up a way to register your budgets, you can now learn exactly what to do. Let’s follow the clues below:
- How to fill it out
Before anything, you must fill your app or worksheet with your latest expenses and incomes to understand your habits clearer and keep going after that. If you don’t have all them on track to do that, just put as many transactions as you can, then make one called “unknown” whose value has to be what is missing to match your saved money.
Pay attention to doing it by correcting the categories of your activities, because it’s going to be very important for you in the future.
- How to budget
After seeing what you’ve been spending, choose if you want to save more money or just balance your spending more correctly, then create goals by category relating to your choice.
Now, you’re able to carry out those steps showed before. Let’s apply everything together:
- Planning
- You first register your transactions, dividing them into correct dates, descriptions, categories and amounts.
Source: https://web.mobills.com.br/
- Make a budget by category based on the expenses and incomes you’ve had:
Source: https://web.mobills.com.br/
This first budget can be little assertive because you aren’t still used to see your habits and shift them.
- Recording:
Do the same that you had done on the section 1.a, keep registering your actions as soon as you spend or earn any money not to lose control of them. It’s very important to preserve this custom.
Source: https://web.mobills.com.br/
- Verification:
You’ll be checking if you’re about to exceed your goals as often as you prefer, then trying to respect your limits by not overtaking them for you achieve your monthly objectives.
Source: https://web.mobills.com.br/
- Analyzing:
In the end of the month, analyze if your goals have been effective for you by checking graphics or tables divide by categories:
Source: https://web.mobills.com.br/
After having data of many months of use, you can look at the monthly balances and try to grasp what occurred in those ones that they were positive or negative.
Source: https://web.mobills.com.br/
All these steps can be performed by the form of registering you have chosen. Now all you need is to restart this cycle from planning every month from now on!
Bibliography
8 simple ways to save money. Bank of America, 2020. Disponível em: <https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/ways-to-save-money>. Acesso em: 15/10/2020.
KIYOSAKI, R. A Different Financial Education (in 17 Definitive Lessons). Rich Dad, 2020. Disponível em: <https://www.richdad.com/financial-education>. Acesso em: 15/10/2020.
60 Super Simple Ways to Save Money. Intuit Turbo, 2018. Disponível em: <https://turbo.intuit.com/blog/real-money-talk/how-to-save-money-1358/>. Acesso em: 15/10/2020.
How to Save Money: 20 Simple Tips. Ramsey, 2020. Disponível em: <https://www.daveramsey.com/blog/the-secret-to-saving-money>. Acesso em: 15/10/2020.
9 Good Money Habits You Can Form. Mental Floss. Disponível em: <https://www.mentalfloss.com/article/532663/9-good-money-habits-you-can-form>. Acesso em: 15/10/2020.
BATISTA, J. Controle financeiro e planejamento: por que são importante?. Flua, 2019. Disponível em: <https://www.flua.com.br/blog/controle-financeiro-e-planejamento-por-que-sao-importantes/#:~:text=O%20que%20%C3%A9%20controle%20financeiro,corrigir%20poss%C3%ADveis%20falhas%20e%20erros.>. Acesso em: 08/12/2020.
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