How to organize accounts? This is a recurring question from many families who monthly end the month in the red or without a penny on their bill. The truth is: those who do not control finances end up facing this financial stress.
The effects and consequences of it can affect even the person's physical and mental health, since he will find himself distressed, worried and nervous in the face of his own financial problems.
48% of UK citizens claim to have no control over their budget, showed a research recent report by the National Confederation of Shopkeepers (CNDL) and the Credit Protection Service (SPC Brasil).
The problem is that this financial disorganization results in debts. If you are in this situation and want to know how to organize your accounts, this article is for you.
Throughout this content we will talk about:
- What is financial health?
- 9 tips for organizing accounts;
- How important is it to have all accounts written down?
So, come on!
What is financial health?
Before we delve into how to organize accounts properly, we need to talk a little bit about the importance of financial health. When we speak of this term we are referring to intelligent money management.
This is not related to how much money you have, but how you manage it to achieve your goals. Those who are financially concerned end up influencing their personal and professional lives negatively.
Out of every ten defaulting UK citizens, eight say they suffered from negative emotional impacts related to debt, he said. a research CNDL and SPC.
This is because financial stress can cause physical and mental problems, in addition to making people more unproductive, unmotivated and debt-ridden. In fact, financial stress was already the subject of an article on our blog, Click here and check it out.
That is, keeping your financial health up to date is the best option to live well. But this task is not easy and that is why we have separated some tips for you to achieve a comfortable financial situation for a good part of your life.
9 tips for organizing accounts
Good financial planning requires organization, economy, knowledge of one's own expenses and often requires a change in lifestyle. To help you answer the question: “how do I organize my finances?”, We have separated some tips below.
Find out all about your income
The first step in knowing how to organize your accounts is to have a real understanding of your monthly income. Do you know how much you earn, in net value? Knowing this value is the starting point to be able to control the finances.
So write down everything you earn, from salary to extra income. If so, supplement this account with your partner's earnings, once the earnings and expenditures enter into a joint plan.
Know your spending
It is impossible to deal with finances if you do not know how much you spend. Only 33% of UK citizens plan ahead, according to CNDL and SPC Brasil. However, it is essential to have this control.
Therefore, put all fixed expenses (rent, electricity, car installments, school fees, college fees) and variables (fuel, parking, lunch outside the house) at the tip of the pencil.
Having this broad view of spending will be critical to later find out if your accounts are in the red on a monthly basis and especially to make a cut in spending.
Evaluate your earnings and spend
Now that you know exactly your earnings and expenses, it's time to compare each other to find out about your financial reality.
If you are running out of money is a good sign, now if you are in the red it is an indication that your finances are poorly organized. This view is important, as it is from there that you will begin the process of cutting costs. We'll talk about it next.
The process of spending cut it is paramount in a financial planning process. When thinking about how to organize the accounts, an adjustment in your budget makes all the difference.
In this process, always consider spending less than you earn. Avoid extrapolating your earnings and cut off what is not a priority. For example: do you have a streaming subscription, newspaper subscription or even a mobile plan that does not use 100%?
Make this reflection, and if the answer is yes, think about cutting it starting today. Also evaluate other expenses you can avoid, such as eating out every day. Every cut, no matter how small, will undoubtedly make a big difference to your monthly budget.
Pay off your debts
One survey by the National Confederation of Trade in Goods, Services and Tourism (CNC) revealed that more than 66.3% of UK citizens are in debt. This is a sign that many do not know how to organize their accounts and end up turning their debts into a snowball.
The first step to get out of this financial hole is to recognize the problems, put everything on paper and look for alternatives to pay the values. Search renegotiate debts, assess the possibilities of cash payments and set a deadline to settle them.
Another essential point is not to make debt on top of debt. If you are in debt, avoid using your credit card, overdraft and making new installment accounts.
Set goals and objectives
Another important tip in financial planning and how to organize finances is in setting goals. Once you are able to set goals that you aim to achieve, it is easier to have control over your money.
That's because when you have a goal it is easier to save and even have control over the accounts, because, you will do everything to get to that goal set. Of course, it is important to set achievable goals.
In this way, also put on paper what you aim for in the coming months or years. Is it buying a house? A car? A course? A graduate degree?
Write down the value of these goals and sew with what you earn. This way, you will be able to know how much you need to save and for how long until you reach your goal.
Bet on a change of habits
The Locomotiva Institute showed in search that 42% of UK citizens were willing to spend less than they spent before the pandemic.
The drop in income did have an impact on this scenario, but a lot of it has to do with the financial re-planning that people started to do. This is the famous change of habit, which is closely linked to good financial planning.
Want to know how to organize accounts correctly? So, start paying attention to your habits. When we talk about habits we can include excessive spending on food, commuting and impulse purchases.
Evaluate what makes you spend unnecessarily, cut spending and give preference to activities that are free or that do not exceed your possibilities.
Never buy on impulse
Six out of ten UK citizens make impulse purchases, said one study the Credit Protection Service (SPC Brasil) and the National Confederation of Shopkeepers (CNDL).
The big issue is that buying unnecessary things tends to compromise the budget and put people in debt. To escape this reality, the first question to ask yourself before buying anything is: “do I need it now?”.
If there is hesitation in the response, you are most likely acting on impulse, and it is certainly possible to wait to make such a purchase. Another tip is to avoid promotions and avoid registering on department store websites.
Invest your money
Don't think that losing money is just about spending too much. Those who do not invest also end up seeing a “devaluation” of their own money. Since, standing still does not generate any kind of income.
Therefore, as organizing accounts is about taking good care of your money, investing is an essential part of this process.
From savings, which is not so recommended, to more attractive options such as investment funds, private pension plans, bonds (LCI, LCA, CDB), stocks and so on. Just adjust the investment to your profile (conservative or bold) to start.
How important is it to have all accounts written down?
The above tips are fundamental in the process of how to organize the accounts, but just as important, it is to have a financial notebook so that you have a macro view of your finances.
This account book will be responsible for guiding you on how much you can spend, save and to know which bills to pay. After all, organization is essential to not get lost in your budget.
Currently, there are numerous online applications that contribute to this path of how to organize finances in the notebook, being a modern alternative and that optimizes the organization of accounts.
Some of the highlights, in terms of accounts payable organizer, are: Google Sheets, Google Keep, Guarantee, Organizze, among others. The good news is that they are available for Android and IOs, making it even easier to use.
Plan and change your life
Getting organized, financially speaking, requires planning and sacrifices. If you are really interested in how to organize finances correctly, we invite you to follow some of the tips that we have given throughout this article.
Since maintaining your financial health preserved, you will have a higher quality of life. Therefore, if you have goals and objectives for your life, the initial step is to organize the accounts.
Whether to buy something of value, a house or a car, or to pay off debts. Everything requires organization, discipline and willingness to know your own income, cut expenses and save money.
Did you like our article on how to organize accounts? So, share it on your social networks and help more people understand the importance of keeping your financial health up to date.