According to the Consumer Debt and Delinquency Survey (PEIC), conducted monthly by FineCommerce of San Paulo, 55.1% of consumers are indebted. Growth was over 13% compared to December 2018. And approximately 9% of indebted people will not be able to repay their debt.
To escape this kind of problem we have created a quick and practical guide. The idea is to get you rid of your debts. And get credit without having your dirty name. There are free tools that allow you to manage your accounts and have control over your debts. But are they really reliable?
Planning and control are essential
The recent Credit Protection Service (SPC) study found that approximately 20% of people applying for personal loans seek to repay debt. Although it is a reason worthy of solicitation, it is ideal that you avoid any debt.
And to avoid runaway in your accounts the main word is planning. For if you take care of your finances you will surely be more likely to avoid unwanted situations. So here are 5 good practices that can help you control your money before it controls you.
Having some kind of control over your money is very important. Some people use the good old paper and pen. But others are more in the digital world. And the internet offers a variety of applications that help you manage your accounts. It also lets you know how much you can spend.
If you are old-fashioned, and prefer the notebook, then the tip is that you write down your expenses. Begin simply by writing down everything you spend on the day. If you buy with your credit card, no problem. Keep the vouchers for your purchases and, at the end of the day, sit down and write it down in your notebook.
At the end of the month you will know how much you have spent and can compare with previous months. This way you will know which expenses went beyond what you wanted. And you will be able to better manage your money. Which, in turn, will help you avoid falling into big debt.
Focus on the essentials
If your expenses are already a little out of control but you are still considering getting a payroll loan, then it is time to focus. Basically this means that you must prioritize essential expenses. What’s most important to your life: spending on new clothes or having food on the table?
These priorities vary between each. So there is no perfect formula to prioritize. Ideally, you should think about what is essential yourself and focus on it if your expenses are reaching higher than expected levels. This will make you wonder if you really need to get credit and know when is the best time.
If you still want to buy loans, remember to buy the options you have. And design the installments that will come for payment. This also goes into the concept of planning that we mentioned earlier. But it is also completely linked to what we will talk about next.
It is normal to hear tips from financial advisors to save. But we usually don’t focus on that. The momentum for rampant shopping and the desire to enjoy that 50% promotion on your favorite pants is stronger. But oddly enough, savings can be useful even for discounts on products.
For example, if you are buying a non-promotion product, you can pay 20, 30, or even 40% more than saving your money and waiting for discounts. Stores often make offers to settle stocks because they require working capital. So keep in mind that if you save and earn some interest, you may be saving your money.
And saving is also important for you to have a security reserve. For unforeseen happen. But if you have extra money saved for a leak in your home, or your car goes awry, then you can use it without borrowing money from anyone.
Also think about the future
Another advice we hear a lot out there is that we should enjoy our day as if it were the last of our lives. That is true, but we also have to think about the future. Like it or not, life expectancy has increased. According to World Bank data, Brazilians tend to live up to approximately 75 years.
But the future need not necessarily be your retirement. It may be next month. For example, this is June and your car has the end of plate 8. That is, you will have to pay for your documentation soon. So enjoy and write down this future expense. So when you get your notes you will see that there are already scheduled debts.
And when you see your future expenses, you’ll know that some of your money is already committed. This will let you know exactly what limit you have on your account to spend and what additional expense will cause you to get into a debt situation.
Final Tip: Cut Spending
We talk a lot about planning and future plans, but you can start tracking your debts right now. Usually credit cards offer bank statements and possibly your bank as well. That is, you can now look at how your recent spending went and see where you can cut it. Here are some examples of where some people can save:
- Electricity bill: cutting unnecessary lights and long baths;
- Water bill: washing dishes in an organized manner or using a dishwasher;
- Getting around: Use the bike more or just go instead of taking the car out of the garage.
The math is quite simple: if you spend more than you get, you will have debt. But if you have received more than you spend, then you will have money left in your account. And, for starters, nothing better than understanding where your salary is going and knowing how to save some of your resources.
Finally, our tip is to get you started saving your money today. Cut your unnecessary expenses, plan your expenses and have control over your resources. This is a great way to have capital left over for you to make that trip you always wanted.