Keeping track of personal finances is a simple habit, but it can make all the difference in the way you handle money. By managing what comes in and what goes out of your checking account and what your credit card spending is, you can balance your finances and have enough money to get out of debt forever, fulfill your dreams and achieve financial security, regardless of the salary you receive. In addition, you are more comfortable knowing exactly what your financial situation is and what you need to do to improve or maintain a good financial situation.
Provides a more balanced life
Those who have excessive installments on their credit card, buy more than their income allows and pay unnecessary fees are far from having a balanced financial life. The imbalance also appears in wrong decisions in relation to investments and purchases, such as opting for undervalued shares, making the wrong car changes, among others. Creating the habit of analyzing how much you spend and, mainly, what you spend, leads to more intelligent and balanced financial decisions, since goals and dreams are taken into account and, consequently, consumption is made more consciously, taking into account in view of what you and your family want to accomplish.
Helps you achieve your dreams and goals
Planning for the future is essential to achieve your dreams and goals. With personal finance control, it is easier to have a clear vision of what you want to accomplish and, mainly, what you must do to achieve what you want. Money management helps you identify how much you have available to make a dream come true, such as checking into your own home or taking a big trip, and the expenses you can cut to save monthly to reach the amount needed to fulfill that desire .
Doesn’t let you have that doubt about where the money went at the end of the month
It is not uncommon to reach the end of the month almost in the red and have no idea where the money ended up. When you write down all the expenses and, mainly, categorize them, you start to track exactly how your money is being spent.
Helps cut unnecessary expenses
Most people know that they have a lot of unnecessary expenses on a daily basis, but many of them do not know exactly what they are. With the control of personal finances it is more to identify the expenses that are not essential to maintain and / or are being made in excess and can be cut. From the gym you never go to the unknown fees charged to your checking account and credit card, to the expenses you don’t even know why you made them: in most of your personal budget there is potential for savings and cost savings.
Avoids interest and debt
Some are higher and more problematic, like those charged when you pay only the minimum credit card or use an overdraft. Others, lower, such as the delay in the electricity bill or IPTU. However, no matter where the interest comes from, with personal finance control and effective money management, you learn to avoid it and balance your checking account. Keeping your finances in check is also possible to avoid debts, as you get to know how much you earn, how much you spend and the maximum you can reserve for each expense.
Can program yourself to save
Personal finance control and planning go hand in hand. Those who start to manage their money wisely, consequently, plan better in which budget categories they will use it. Separating part of the monthly income for an emergency reserve or for investments becomes natural and, as soon as you receive the salary, you already know that a part will be allocated to the fund for unforeseen events or for long-term investments.
Has less stress
There is nothing worse than being apprehensive each time you use your credit or debit card, not knowing if there is a balance or limit to make a purchase. By making personal finance control a habit, you get to know exactly how much you have in your checking account and how much you have spent within your credit card limit. Anyone who has gone a step further and planned to create an emergency reserve has even more quality of life: