There are flaws in financial planning that compromise your budget and leave you in the red. Before you know what are the main financial planning mistakes that hurt your pocket, you need to know that any problem can be solved, you just have to make a decision.
If today you find yourself in a complicated situation, do not be afraid to face financial problems and change your attitudes toward money.
Next, NHA Credit shows you the 7 financial planning mistakes that get you in the red.
1) Do not do financial planning
Do you know how much you earn and how much you spend? Spending planning is essential not to get red. Planning your main expenses means having more control over your finances.
Even before you drop your salary or other type of payment, you need to know where your money goes. Ideally, you should write down your main expenses in a spreadsheet , separating them by categories.
It is at this time that you can plan how much you can spend, for example, with leisure and meal out of home. There is no mistake!
Tips for planning expenses:
- Write everything down in a notebook or expense spreadsheet;
- Define how much you can spend by category, for example: “supermarket”, “leisure”;
- Clarify your income (salary and extra income) and expenses (accounts payable and principal expenses).
2) Do not control expenses
The salary falls on the account and you know what your expenses of the month are: accounts payable, supermarket, pharmacy, among others. Well, that’s not enough.
In addition to planning your main expenses, it is necessary for you to have discipline, that is, to monitor the movement of your money and not to spend more than you can.
Who is not accustomed to controlling the expenses, is more likely to arrive at the end of the month tight or even without money. Do not let the financial discontent knock on your door!
Tips for Controlling Expenses:
- Cut or reduce unnecessary expenses;
- Be aware of the small expenses of everyday life;
- Do not exceed planned values in your budget.
3) Do not use credit in a conscious way
Credit is money borrowed! Credit card and overdraft are the big bad guys when it comes to financial balance.
If you do not control credit card spending and use overdraft often, you tend to have serious problems, especially if you can not get rid of those debts quickly.
To avoid credit card misconduct and overdraft, if you need cash, prefer cheaper credit lines, such as a personal payday loan . Run away from high interest rates right now
Tips for Using Credit Wisely:
- Track the purchases in installments;
- Avoid to the maximum the minimum payment of the card;
- Credit is not money: Define how much you can spend and stick to it.
4) Do not negotiate your debts
You have debts, but you still do not know if you should negotiate your debts? The answer is “yes,” and the sooner! Know that it is possible to pay off your debts even if you earn little .
Trading is the only way for you to get your name off the register of defaulters and regain access to credit. In addition, debts increase rapidly with interest and fine.
The later you trade, the more expensive the debt will come out. Do not lose time: contact the lender and upgrade on your debts.
Tips for negotiating your debts:
- Request discounts on cash payment;
- Concentrate multiple debts on a single one with a personal payday loan .
- Clarify the conditions of negotiation in cash or installment payment;
5) Not following the “standard of living” of your pocket
Do you go out buying everything you see ahead of you? Do you choose expensive restaurants for lunch every day? Caution: following a “standard of living” that does not fit your pocket can seriously damage your financial life.
For this reason, it is important to clarify how much you can afford not to stay in the red and of course make good choices.
Remember that if you do not follow the “standard of living” that your pocket asks for now, your situation may get worse up there, and you will not even be able to consume what is cheaper.
Tips for following the “standard of living” of your pocket:
- Search and compare prices before purchases;
- Save when possible to balance expenses;
- Before consuming, ask yourself, “Am I needing it?” And “Can I even buy it?”.
6) Do not have financial objectives
You can even plan and control your spending, but if you do not have financial goals, your money can be used for any purpose. And how can this hurt your financial life?
Now, if you do not have a plan, you can waste your money for nothing and then repent. To prevent this from happening, you better define what your financial goals are, short, medium and long term.
For example, if you want to renovate the home, you need to know how much you need and how long it takes to get the money.
Tips for setting your financial goals:
- Create goals, set deadlines and necessary values;
- Think about your main dreams and what needs to be done to reach them;
- Be disciplined to achieve your goals within the stipulated deadlines.
7) Do not have a financial reserve
Unforeseen pockets can disrupt your financial health. Staying in the red because you did not plan for emergency spending is more common than you might think.
There is only one way to avoid this problem: by creating a financial reserve. No matter how much you make: save some of your money.
You can start small and increase the amount until you get a good reserve. It is important that you do not confuse financial reserve with money saved for other purposes such as a trip.
Tips for creating a financial reserve:
- Save a certain amount every month;
- If possible, increase the amount to get the desired balance faster;
- Do not use the financial reserve for another purpose, just for emergencies.