Organizing personal finances is a major challenge for many people. It is especially a big challenge for business owners who also need to take care of their company’s finances. However, it is a very important task because poor planning can lead to serious problems, such as increased debt and unnecessary spending that undermines income.

To prevent this from happening, you need to invest to manage your money effectively. This will reduce your worries at the end of the month, allow you to invest and increase your capital, travel, change your car, etc.

With that in mind, here are 9 simple tips to help you organize your personal finances

• Make a budget;
• Set goals to save;
• Restrict spending;
• Avoid unnecessary expenses;
• Stay away from debt;
• Separate an amount for annual expenses;
• Have a reserve for emergencies;
• Separate personal accounts from professional ones;
• Use technology to your advantage.
• Want to know more details about each of them? So, read on!

1. Make a budget

List all fixed expenses such as water, electricity, telephone, rent, etc. Then calculate how much the average of all these expenses would be in a month. That value will be your cost of living.

Keep in mind that this amount already represents a portion of your monthly income. Therefore, you must constantly monitor your future expenses to ensure that everything is as planned.

The remaining amount is available to invest in variable expenses, make investments, or build reserves.

2. Set goals to save

Saving cannot be done with just the money left over at the end of the month. It must be done with a purpose, not only to keep track of your expenses, but also to build your financial outlook.

To do this, you should decide on a monthly reserve amount and set aside that amount in a separate account from the one you use for your daily expenses as soon as you receive your paycheck.

3. Restrict your day-to-day spending

Just as you would set a savings goal, you should also set a goal for your expenses. For each type of expense, set a maximum amount you can spend per month. This division can be done by category, for example:

• 15% with supermarket;
• 10% with leisure;
• 5% on clothing and other accessories.

This does not mean that you should spend this amount every month, but that it is the maximum amount you can invest in each modality. This is a big step forward in the process of organizing your personal finances.

4. Avoid unnecessary expenses

Knowing where your income is going makes it easier to determine what is important and what is expendable in your personal budget. This way, you can avoid putting your paycheck toward expenses you can’t afford.

When you are about to buy something, ask yourself if you can afford it and if you really need it. Sometimes willpower speaks volumes, but you need to control yourself because it is better not to go into debt than to go into debt.

If you have multiple priorities but can only afford one of them, prioritize what you need most. Sometimes you have to think about some things.

What about stopping spending on extras so that you can invest, save for a more peaceful retirement, or save to conquer what you really want? This could be very interesting!

5. Stay out of debt

If you don’t have debts, you’re already on a good path in terms of controlling your personal finances. However, if you do, this is the first problem you should solve to get financially organized.

Late bills come with other costs, such as fees and interest charges, and take away opportunities for savings and self-discipline. In this situation, all incoming money is spent on paying bills and paying back debts becomes the main objective.

The way to solve this problem is to try to renegotiate the debt or pay it in installments, and remove this “stone” in the financial consolidation project.

6. Separate an amount for annual expenses

The mistake many people make is to focus only on monthly expenses and not consider annual expenses such as IPVA, IPTU, and insurance. These expenses can eventually become a problem if they are not scheduled.

Therefore, it is appropriate to set aside a certain amount of money during the year for these expenses. It is also a good idea to set aside a fixed amount each month.

7. Have a reserve for emergencies

Unforeseen events can happen at any time, so it is necessary to be prepared. The purpose of creating an emergency reserve fund is to prevent unforeseen events such as contract cancellations, health problems, car repairs, etc. It is necessary to have financial composure during these times, and the emergency reserve fund guarantees this.

8. Separate personal accounts from professional accounts

Financial management should be available to everyone. However, if you are also a corporation, you need to be especially careful. Personal accounts can never be mixed with professional accounts, and this is not just a matter of organization.

If these accounts are mixed and personal income is used to pay off the corporation’s debts and vice versa, not only will this have serious consequences, for example, making financial planning for the business impossible, but it will also jeopardize the accounting. This is because all CNPJs must perform bank reconciliations (i.e., reconciling the bank statements of the PJ accounts with the company’s deposit and withdrawal declarations). When mixing personal and business finances, accounts are not closed.

To avoid such problems, it is ideal to open two bank accounts, one for personal use and one for corporate use. This way, you can avoid mixing up the bills and income of the two.

Additionally, to facilitate bank account reconciliation, you can use the Contabilizei platform, which can automatically reconcile account activity and statements. For more information, please click here!

9. Use technology to your advantage

There are several applications on the market that can help you with this task of organizing your personal finances in your daily life. In this way, it becomes easier to record and manage all the expenses that are part of one’s daily routine.

This will allow you to identify which amounts are being spent unnecessarily so that they can be reduced. The key is to learn to control your finances, save money, and value your income more.

For financial management, a tip would be to migrate your accounting to Contabilizei and automate invoicing and bank reconciliations.

Have you realized the importance of organizing your personal finances and separating your work accounts? Then put these tips into practice right now. Doing so will ensure a more peaceful financial life and help you achieve all the goals you have set!

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