Financial planning and control help you stop feeling like your money is disappearing without explanation and start using it more consciously . Without organization, you spend without realizing it, live in a tight spot and never manage to set aside an amount to invest or build an emergency fund .
With good planning, on the other hand, you know exactly where every dollar goes, avoid unpleasant surprises and can prepare for the future without having to cut out everything you like .
And that’s not all: being in control of your finances makes you make wiser choices. Because, at the end of the day, you begin to realize what makes sense to spend, how to invest and how to reach your goals without simply depending on fortune. Ultimately, it’s not so much a matter of earning more or saving less, but more about having the knowledge on how to maximize what you already have.
Financial planning VS financial control
In planning, you define your goals and create a path to get there . It’s about deciding how to use your money wisely, choosing where to spend, how much to save and how to invest. In financial control , you monitor all of this in practice . In other words, you look at your statement, adjust your expenses when necessary and continually ensure that your plan is actually working.
The two together make your money work for you, instead of just being something that comes in and goes out without you really understanding where it went.
Benefits of financial planning and control
With good financial planning and careful control over your money situation, some of the benefits that will make the biggest difference in your life are:
- Debt prevention ;
- Security and stability ;
- Achieve financial goals ;
- Improved cash flow .
Continue reading to better understand how each one happens.
Debt prevention
With well-planned finances, you avoid taking on unnecessary debt . In addition, you become more aware of existing debts and the path to follow to pay them off.
In practice, knowing exactly how much money comes in and goes out prevents you from spending more than you can afford and ending up relying on loans or credit cards. It’s basically ensuring that your money lasts the entire month without having to resort to expensive and stressful solutions.
Security and stability
Having a well-planned financial plan means fewer unpleasant surprises . This is because part of the planning involves building up a reserve for unforeseen events, creating a monthly budget and organizing your accounts.
The result of all this is a routine in which you enjoy greater financial peace of mind , without reaching the middle of the month wondering “will it be enough?”. Without this rush, your decisions related to money are made with more awareness and less desperation. In fact, with security and stability.
Achieve financial goals
Retiring with more peace of mind , getting rid of debts or taking a trip are some common goals and, naturally, each of them requires different deadlines and amounts. By controlling your finances, you can organize yourself to get closer to achieving your goals . Otherwise, they remain just abstract ideas.
Improved cash flow
You may better comprehend when and how money comes in and goes out by keeping your accounts organized. Without this, it’s very easy to lose control, spending all your resources little by little, without realizing that, when you put it all together, the loss was huge.
Financial planning and control also serve to avoid unnecessary difficulties , improve your ability to invest and make your money yield more. With a healthy cash flow, there is more money left over for what really matters: avoiding debt, paying for your lifestyle and investing.
How to implement financial planning and control?
Implementing financial planning and control in your life is easier than you think — just follow these steps :
- Set clear goals;
- Create a budget;
- Monitor finances;
- Adjust the route when necessary.
Find out exactly what to do in each of them below.
Set clear goals
Different goals require different amounts of money, deadlines, and strategies. Therefore, without knowing what your goals are, you have no way of knowing what you need to achieve them . Consequently, you will continue to spend your resources aimlessly — probably more than you imagine — and focus only on the present.
If you need some inspiration to know where to start, our tip is to pay off any debts you have before setting your sights on more distant goals.
Tip: If you are already in debt, draw up a plan to get rid of these debts and try to avoid new ones until the mission is accomplished. If necessary, know that renegotiation platforms can help you get more favorable payment terms.
Create a budget
Sometimes, it’s not an expensive purchase that destabilizes you (although this can also be a problem when it’s done without planning). The biggest problem, in fact, usually lies in the small daily expenses , made with little thought and control, which add up to very high amounts at the end of the month. It’s not uncommon for you to see your money run out before the end of the month and have no idea how it happened.
The solution is as follows:
- Write down all your cash inflows;
- List your fixed expenses (housing, food, medicine, gasoline, etc.);
- Map out the debts that need to be paid off as a priority;
- Set limits for each type of expense in your life (leisure, groceries, etc.).
Knowing how far you can go, you are less likely to get overwhelmed by the bills and have losses before the end of the month.
Monitor finances
This is where financial control comes in . When we advise you to record your income and expenses, this means constantly monitoring your notes.
Furthermore, it is ideal that, rather than just filling in this information, you take some time to analyze the progress of your planning. This closer look at your records helps you identify expenses that can be cut , notice unhealthy consumption habits and outline more efficient strategies to optimize the use of money.