Personal financial control: 8 things to avoid

Discover how to improve your personal financial control in 2022

Having personal financial control on a daily basis can be a very difficult task.

This is why many people make plans, but have difficulty putting new habits into practice. The problem is that this can affect your finances in both the short and long term.

With that in mind, in today’s article, we’re going to talk about some mistakes that can hinder your financial organization.

Read on to find out more.

How to have personal financial control?

Personal financial control is the practice of organizing all income and expenses over a period, usually monthly.

Acquiring this habit is important, because many people do not know how much they earn and spend each month, which is certainly one of the main reasons for lack of financial control.

Therefore, it is necessary that you start planning and organizing your expenses.

In addition to knowing and controlling your fixed and variable expenses, it is important to set goals. This way, you can optimize the use of this money and cut out habits that keep you away from your true financial goals.

Even if you can't apply all the points of personal financial control, the important thing is to take the first step.

This way, over time, you will find it easier to create habits that will help you achieve good results.

What are the most common mistakes in personal financial control?

See what are the main habits that hinder your spending and, therefore, sabotage your savings:

1. Not planning

Financial planning is important so that you can better understand your income and expenses.

Furthermore, this plan will help you set financial goals, such as investing more, traveling, changing cars, among others.

This will help you plan your expenses and better understand your financial reality.

So, before anything else, put together your financial plan!

2. Not having an emergency fund

The emergency fund, as the name suggests, is an amount set aside for eventualities and financial contingencies.

In other words, it is a reserve to deal with unexpected situations and avoid new debts.

It is important that you commit to using this fund only in times of emergency, such as car repairs, urgent travel, health emergencies, etc.

Building your emergency fund may seem complicated at first, but gradually you will reach the desired amount.

This way, if something unexpected happens, you will have a much easier time dealing with the situation, as you will not need to resort to high-interest loans.

We never know what might happen, do we? And that’s why saving money for emergencies is essential.

3. Investing in something just because of recommendations from acquaintances

Without a doubt, starting to invest is very important for you to increase your assets and have more financial peace of mind.

However, many people start investing without planning just because they heard someone talk about such an application.

To choose the best investment option, you must take several factors into account, such as your investor profile, financial objectives, investment profitability, redemption period, liquidity, among others.

4. Not writing down your expenses

This topic has everything to do with planning, since in order to control your budget, you need to write down your expenses.

In fact, it doesn't matter if the expense in question is low, because even small expenses, when accumulated, can turn into a snowball.

Therefore, it is ideal that you write down all your expenses. This way, in addition to managing your budget better, you will know exactly where your money is going.

5. Thinking only in the short term

Many people think that planning for the future means giving up the present.

Actually, it's not quite like that. 

By thinking long-term, you can focus more on what you really want. This way, you can avoid unnecessary expenses that only jeopardize your finances.

Setting goals and objectives is necessary to chart the path you truly want to follow in the future.

6. Over-shopping

Compulsive shopping can take a big chunk of your budget away.

If you're not careful about overspending, you could end up getting into debt and jeopardizing your main financial goals, whether they're short-term or long-term.

Before buying something, think about whether you really need it. Because we often buy products that we won't use.

Here are some ways to avoid compulsive shopping:

• Avoid shopping when you are very happy or very sad (as this can trigger you to spend more)

• Postpone purchases (to make sure you really need it)

• Make lists of what you need to buy

• Set budgets for different categories

7. Beware of promotions

Promotions are related to the habit of consuming more than you actually need.

But after all, if a product has a good price, why not take advantage?

Promotions serve as triggers for you to spend more on things you don't need.

Of course, if you want and need to buy something, it's worth taking the opportunity to purchase the product at a better price.

However, if you buy things just because they are on sale, you will end up spending more unnecessarily.

8. Leaving money sitting in a savings account

Starting to save is very important for you to have more financial peace of mind and achieve your goals.

However, leave money in savings It is not the best option for your savings, especially if your focus is on the long term.

The good news is that there are several fixed income investments that are as safe as savings accounts, but offer much better returns, such as Tesouro Direto, CDB, LCI/LCA, among others.

Conclusion

These are our tips to help you have more personal control.

To avoid making mistakes that can harm your finances, rethink your habits, carry out financial planning and set short and long-term goals.

Also start thinking about building your emergency fund and write down all your expenses, regardless of the amount!