In a situation where finances go off the rails and the person ends up falling into debt, a solution may be to resort to debt exchange, where there is a replacement of expensive installments with high-interest rates for cheaper ones with a longer-term.
However, it is essential to know your relationship with money and seek to understand which factors may be getting in the way of controlling your financial life. In addition, financial planning is a more than necessary ally for those looking to reorganize their finances and get out of the red.
That is why financial control is so important for those who are in debt and want to get their finances back on track, but also for those who want to avoid falling into default, even save money or achieve some other goal.
With that in mind, we’ve separated 5 practical tips that can help you stay in control. Take a look:
Table of Contents
List and track all income and expenses
It may seem obvious to know how much you earn or what you spend, right? But believe me, many people do not have an exact idea of their income and expenses and what expenses impact their budget.
Therefore, the first step in controlling finances is to keep track of all cash inflows and outflows. It is worth using a spreadsheet on your computer, a notebook, or even an application on your cell phone. The important thing is to record your fixed and variable earnings and expenses.
Thus, you will better see how your budget works and understand which expenses are higher, where possible gaps are and what can be reduced or cut.
It is at these times that you can discover more superfluous expenses that take up a large part of the budget or how it is necessary to change behavior in routine market purchases, for example.
Create a debt payment plan
The first step is to get organized and put together a plan to pay off debt. If so, talk to the family about the situation and establish what can be cut or reduced. If there is extra income, consider using the money for the outstanding payment.
It is necessary to be clear how much of the budget will be allocated to paying off the debt, how long it will take to pay it off, the interest involved and which consumption behaviors will need to be reviewed. Not just to get out of the red, but also to avoid falling into debt again.
If the debt swap makes sense, the new maturity loan also needs to be on schedule, so it doesn’t become a substitute drag.
Put major accounts on automatic debit
Automatic debit can be a good ally for those who want to keep track of their accounts. That way, you don’t run the risk of using the money intended for important expenses on other things and avoid paying interest and late fees.
It is worth listing all accounts to be placed on automatic debit, along with the amount and due date. Also pay attention to the dates, ensuring that there is a balance in your account when the amounts are debited.
Another advantage is that some companies also offer discounts when bills are paid by direct debit, so it’s worth checking. The request can be made directly with the companies, often through the company’s own app.
Use your credit card sparingly
To have your financial life under control, you need to be careful with your card, so as not to compromise your income and get into debt.
According to a study by the National Confederation of Commerce, debts due to credit cards lead to the ranking of overdue debts among Brazilians and interest rates are usually one of the highest in the market.
To have it as a resource, don’t use it as an extension of your income. Stipulate a maximum limit on how much you can spend on it, in addition, avoid accumulating multiple installments of different purchases, which together, take up a good part of the income in the following months.
Also, pay attention to the invoice due date and avoid delaying it or falling into revolving credit, because interest rates are usually very high.
Start an emergency fund
Who has never faced an unforeseen situation, such as a health problem or even a period of unemployment? It is at these times that the financial reserve is very useful for those who want to maintain control and have more security.
You don’t need to start by adding large amounts if your budget doesn’t allow it. Start with a comfortable amount for your reality, which could be spent on something you wouldn’t even realize.
The secret is to create the habit and discipline of saving a certain monthly amount.
Gradually, you can increase this amount. The important thing is not to save what’s left, because there will always be a reason to spend. Instead, as soon as the salary falls into the account, set aside an amount for your reserve.
We hope that our tips will help you to have a healthier financial life. If you need extra help, count on our personal credit line, with fair rates, installments that fit in your pocket, and a fully digital process.