Taking care of money is a difficult task and requires calm when paying the bills, people do not have access to financial education. We don't learn financial education in schools, so many people have difficulty finding the point of economic balance and lose control not only financially but also over their lives.
However, avoiding unnecessary expenses is still a positive factor, but no one needs to be a genius or so strict with expenses. To do this and avoid problems, a minimum level of knowledge is enough. Above all, consensus and dialogue with those involved to achieve the objectives.
With this in mind, we created this guide to explain the economic balance point and how people and entrepreneurs can control their money. This way it is possible to make a profit and guarantee a little money at the cash register.
After all – What is financial education?
We refer to financial education when we decide to structure the accounts, to organize all the amounts we receive and have to spend, that is, the difference between what we have in revenue conflicting with what we have in expenses in order to study the reduction costs and create a reserve.
However, there are three ways to achieve this balance. The concepts and calculations are theoretically simple, the difficult part will be the discipline to put them into practice. Understand below some criteria that help you take control of your finances.
1 – Record the facts and have good accounting
Companies use this method of accounting to keep fixed costs aligned with business results. This gives you an idea of what can be turned into profit after the monthly payments. The same applies to your personal life, consider that your home would be a business, with expenses and income to be considered.
2 – Economy
This point stands out as a necessary factor to maintain your financial health. To do this, you need to create your “cash book” By describing all cash inflows and outflows, your cash flow will be healthy, remaining positive and consequently making it possible to build a reserve. It is then up to you to choose a good investment with analysis of the results, such as redemption period, profitability rate, and fees and taxes upon redemption.
In this way, the economic balance point creates opportunities and advantages to maintain your “piggy bank” full.
3 – Economic-financial balance
The economic-financial balance point eliminates expenses that you do not need to account for or have in your spending portfolio. However, expenses are declared and recorded in the financial transaction history.
On the other hand, the financial aspect only presents administrative and operational costs in the business. In your personal routine, you need to list exactly each expense made to understand where to apply the expense reduction.
See how to calculate the economic balance of your finances
Economic balance is made by calculations using monthly expenses and profit margin. To do this, you need to discount everything that comes out of the box and this way you have an idea of what is left.
So to maintain the profit structure, you have to use the balance factors that affect cash flow.
But how to deal with money?
People in Brazil are on a tight budget, so spending must be kept under control. However, Brazilian inflation is reducing people's money, so the solution is to speed things up.
Financial experts recommend caution when shopping, filling up the car, always looking for the best price and avoiding unnecessary expenses, as this is how we lose control over our money.
However, there are no rules for moving around, each person must adapt their rules to their family and their reality. To do this, you need to know the economic scenario and thus determine what should be a priority within your budget.
Therefore, consumers need to keep an eye on the market and avoid impulse purchases. Therefore, the rule to avoid debt is to maintain control of your money, whether for personal or business use.
Think before taking on debt
Debt is part of the lives of millions of people, but it is still possible to gradually reduce costs. To do this, you need to make a list of your expenses and look for solutions to reduce them.
On the other hand, the pandemic has ruined many businesses and put some people in a difficult economic situation. And with this imbalance in the economy, money stopped circulating causing losses in several sectors. The government seeks solutions to encourage the population to recover circulation and economic development, and as a consequence we have an increase in inflation.
Final Considerations
Financial education is an extremely important and delicate topic, so be careful and seek a healthier financial life, talk to your family to resolve problems and find ways to get out of the red.
Caixa Econômica offers some classes on its website to help us, do you want to see them? Click here
Do you want to know a little more about economics? There are many more articles waiting for you on the Pá Virada website!
