Master Your Money Management Tips for Beginners, to Take Control of Your Finances Today!

( Money Management Tips For Beginners )

” When it comes to our money , our savings and investments , we must have a long-term vision that can help us achieve returns and a financial strategy as time goes by ,” he said

The expert shares some tips so  you can make the most of your income  throughout the year:

• How to manage money better?

In times of crisis, everything becomes more complicated. Having financial stability and health , for example, becomes one of the greatest challenges and desires of people. To be prepared for this type of unforeseen event, it is necessary to learn to manage money correctly.

It is common to think that having more money will be the solution to all problems and worries. However, things are not that simple. A strategy to reflect and take action on money can be defined in few steps:

• Personal finance education.

Without knowing anything about personal finance and how it works, one can work tirelessly, but will never be able to save enough for a secure future . Therefore, an education in this area is necessary.

• Make a budget.

Creating and sticking to a budget is one of the most important tools you can use to achieve financial freedom. Creating a budget allows you to take control of your finances and make a spending plan . This will help you ensure that your expenses never exceed your income.

• Start an emergency fund.

The unexpected can happen at any time. It is best to prepare for any unforeseen expenses . You should start saving even a little money for any emergency.

• Start saving for your retirement.

To take control of your finances in the future, you need to start saving for retirement today. The best way to do this is by opening a savings account and starting to save a fixed amount each month .

It doesn’t matter how little you save each month. Even small contributions will end up generating big gains in the long run.

• Start investing.

There are two main ways to make money; one is by actively working, while the other is to earn passively by investing . Investing is probably the best way to break the barriers of poverty and improve your chances of financial freedom .

• Follow good habits

Everyone has a certain way of relating to money. It is possible to acquire good habits from parents or relatives, but there are also aspects that need to be improved in the relationship with money.

Therefore, as a first step, the recommendation is to reflect and analyze how you are using your money . Are you spending more than you earn? Ideally, debts should not exceed 30% of your monthly income.

• Recognize expenses

However, this is where the problem arises, as many people do not know how to manage their money responsibly. The main suggestion is to group expenses into two categories: needs and wants.

We can say that needs are those expenses that are made monthly to maintain a lifestyle , for example, paying for electricity, rent, education, food, etc.

Wants, on the other hand, refer to expenses that go beyond needs.

Each person establishes their needs and desires according to their lifestyle and way of relating to money.

For example, now with hybrid work, having a personal laptop and a good internet signal become essential tools for work, so these elements that could previously be considered as desires become needs.

• Know your profile and measure your financial health

As a first step, it is advisable to calculate and track your net worth so you can monitor your financial health and even motivate yourself to save money in the future.

To do this, you only need to count your assets (house, car, income, savings, investments, etc.) and subtract your liabilities (mainly debts and expenses).

The professor also advises considering issues such as our risk profile , our age, etc. to determine the financial strategy that best helps us.

• Set aside at least 10% of your income each month

A useful tip is that before paying fixed expenses, what we call necessities, it is advisable to try to set aside at least 10% of income to invest.

The goal is not just to save money for a period of time until you can spend it on something you want, but to use that amount so that it earns interest and becomes a significant asset in the future.

At first it may be difficult to “give up” that 10%, but the long-term result will be worth it and in less than a year you will begin to see the results.

• The bank as an ally

Throughout life, needs and desires change . This means that at certain times, people will need more money than they receive each month. The safest way to obtain it is through the financial system.

Banks have many savings and credit products to help make a person’s relationship with money profitable and future-proof.

The recommendation is that when a person approaches a bank, they should ask as many questions as possible so as not to have any doubts about the benefits they receive and the commitments they assume.

• Take care of your credit history

When a bank lends money, whether through a credit card, a personal loan , a vehicle loan or a mortgage , a profile of the applicant is immediately created to determine whether obligations are paid on time. This is the credit history and is crucial to establishing a healthy relationship with the financial institution.

Being up to date with loan payments allows you to have greater chances of continuing to be eligible for credit. You can check this for free through what is called a ‘debt report’ on the SBS website .

“Your money, your friend”

Applying these steps allows you to start managing your money in a more controlled and responsible way.

• Evaluate all your expenses and your budget

Before you can save money , it’s important to know what you’re spending it on , so keeping track of everything you buy will help you determine where you can cut back and where your income should go.

To make your record effective, remember to keep track of all your expenses , no matter how small they are. Galindo advises taking advantage of the apps provided by the banks themselves.

” Remember that what cannot be measured cannot be controlled and what cannot be controlled cannot be improved , ” explains the expert.

• Avoid unnecessary purchases

Many people have the habit of buying things they don’t need, and the result is unnecessary purchases that compromise the monthly budget.

Therefore, before buying anything, think about whether you need what you see in front of you; think about whether it is something essential and whether there is no other alternative to replace that purchase with something you already have.

We know that it is often difficult to resist the temptation to buy new things, but at this time it is necessary to think about your financial goals, which are something much bigger. By doing so, you will be much more likely to achieve your dreams.

• Transform a variable expense into a fixed one

Another big villain in our financial life is variable expenses, that is, those that were not set with a limit. For example, a beer with friends, a Friday lunch with colleagues at a more expensive restaurant, and so on.

The big problem with this type of expense is that you never know the exact amount at the end of the month and there are cases in which they exceed the limit you imagine, because there is no control and there is no idea of what the ideal amount is to not compromise your budget.

Therefore, make these expenses fixed and keep track of them. For example, if you define that you will spend a maximum of R$200 per month on trips to bars and restaurants, you will need to monitor the progress of these expenses and stop treating yourself when these types of expenses reach the established value.

• Set savings goals that you can meet

Having savings goals is important to have enough income to invest in health insurance, a down payment on a house , or even to establish a retirement plan.

Setting small , short-term savings goals can help you achieve larger, long-term goals.

Determine how much you need and easily save each week without stressing your life to reach your savings goal at the end of the year.

• Limit your credit card spending

Paying with a credit card may seem less painful than paying with cash or a debit card.

However, carrying balances on your credit cards could increase your interest payments while high credit utilization could lower your credit score.

To avoid these difficulties, it is recommended that you limit your credit card spending and pay the balance on time each month.

Without a doubt, credit cards are one of the biggest villains in people’s financial lives. Therefore, if you want to manage your money efficiently, you need to be careful with them.

What many people don’t realize is that when you make a purchase with a credit card, you’re actually creating a debt to pay off later. In the case of purchases divided into installments, it’s a debt that will last a long time!

This is dangerous for two reasons. The first is that at the end of the day, you are only postponing a payment that should have been made at the time of purchase, losing control and focus of your investment, as this stimulates other short-term expenses.

The second reason is that the possibility of compromising your income in the coming months is high, and therefore, it can harm your future expenses that are essential, putting your situation in a scenario in which you will need to withdraw money from your reserves or incur a debt with interest on the card itself.

Remember that credit card interest rates are one of the highest these days, so your priority should be to avoid them.

• Pay off high-interest debts

When we find ourselves in a period in which our income is limited , it is recommended to reduce to a minimum what is being paid in interest.

This being the case, it is advisable to prioritize the payment of all debts that accumulate interest, dealing first with those debts with high interest.

Opting for low-interest credit cards and loans , as well as paying off your credit card balances each month to avoid interest, can help you meet your savings goals and improve your credit score.

“Remember that what cannot be measured, cannot be controlled and what cannot be controlled cannot be improved .”

• Pay more than the minimum of your debts

“If someone has a debt of $45,000 and does not pay even the minimum amount agreed upon, this can easily turn into a debt of more than $100,000 that can take up to 4 years to pay off ,” explains the academic.

This being the case, Galindo always advises trying to pay more than the minimum amount of the debt in question, seeking to reduce the total amount of the debt.

According to the director, this strategy can be key to shortening the period of time in which this type of debt can be settled.

• Avoid bank fees

Changing some of our banking habits can also help us improve our personal finances.

To do this, you can start by checking the fees your bank charges when withdrawing money from ATMs, making payments at terminals or even during instant transfers.

Using ATMs from the same banking network or waiting to withdraw money from a related ATM can help you save on fees , as can paying in cash whenever possible.

• Put your money in a high-interest savings account

Opening a savings account at your preferred bank is a strategy you can follow to avoid spending money unnecessarily while earning interest from a safe place.

Choosing a high-yield savings account can provide better returns on your money.

For best results, deposit as much money as you can and actively shop around for the best interest rates your bank offers.

• Set up an emergency fund that generates returns

According to Galindo, if you have already saved a significant amount of money, your best option is to look for an account that generates returns and allows you to access your money.

” You have to remember that an emergency fund is made up of 3 to 6 months of your fixed expenses,” advises the expert.

Since you need your funds to be accessible , it is recommended to opt for a savings account that allows you to withdraw the liquidity you may need along with the flexibility to decide how you will continue saving.

• Earn more income while growing your resume

If you have extra time and don’t know what to do with it, take advantage of this space to generate additional money that will help you cover your monthly expenses or even give yourself some small treats.

Asking for more assignments at your job, applying for seasonal or part-time work, as well as taking freelance commissions are some ways you can earn extra income.

• Invest your money safely

Low-risk investments are schemes in which the probability of you earning less than the amount you invested is very low.

This way, you can earn additional income by putting some of the money in your account to work with limited returns to avoid the worry of not getting it back.

” To know how much to invest, we talk about the 50/20/30 rule , where 50% of your income goes to your fixed expenses, 20% to entertainment, and 30% to your savings and investments , considering that there are no debts, of course,” explains Galindo.

• Reinvest all the returns on your investments

Let’s go back to the 10% we talked about in the previous point. If you think that in the future you will be able to use it to buy trips, cars or whatever item you dream of consuming, you are mistaken. All the profits must be reinvested.

This is where you might start to think: what’s the point of having that money if I’m not going to use it?

Calm.The idea is to build wealth and not just save a certain amount each month. Your wealth is your real wealth, the rest is an illusion. It is useless to have a huge salary or profit in your company if at the end of the year you have nothing saved.

People with a wealth mindset are always looking for alternatives to enrich their wealth so that they can live off the returns in the future. If you have the discipline to invest and reinvest your money, in a few years you will not need to worry about issues such as social security, which is not necessarily a safe alternative for retirement.

• Never spend more than you earn

This is obvious advice, right? Well, not so much. Most people know that they shouldn’t spend more than they earn, yet they continue to make the same mistake over and over again.

There are many different excuses and justifications for repeating the mistake, but keep in mind that sooner or later, it is necessary to face reality.

Going into credit card debt month after month only makes you push your problems aside. You may not be in dire financial straits yet, but such behavior simply takes away your freedom of choice as you will be living in a bind every month-end.

Think about it: What if you wanted to invest in a new business idea? What if something unexpected happens to your house or car? Or worse, what if you have unexpected medical expenses? Nobody likes to wish for bad things, but it’s good to have a plan B in case they happen.

At the end of the day, the only expenses that are really necessary are housing, food and transportation. And everything that falls outside of those three can be carefully planned to fit into your budget, without having to go into debt.

• Avoid financing in small installments and high interest rates

When we want a consumer good, we are often attracted by low-payment financing. However, it is good to open our eyes. Most of the time, the installments represent high interest rates.

Just put yourself in the shoes of the company that is selling the product or service: they need to make a profit and financing is nothing more than a loan. In other words, it needs to be advantageous for the lender as well, otherwise the negotiation would be pointless.

So, stay alert! Generally speaking, the less time it takes you to get out of a loan, the less interest you will pay. Not to mention that this will allow you to manage your money better.

Even if financing is short, think carefully before dividing a purchase into installments or taking out a loan: these should always be the last alternative. The always reliable payment in cash continues to be the best option, even for those who usually have difficulties organizing their accounts.

• Look for information on public securities, investment funds or shares

If you follow the recommendation of the first tip of saving 10% of all the money you earn, you will soon have a good amount to invest. In this case, it is good to start looking for ways to use the money right away.

To make your search easier, we have separated some initial information that may help you:

• Public securities

Public bonds of the National Treasury are part of the fixed-income market. They are one of the ways the government raises resources to finance its activities, including education, health and infrastructure.

In addition to offering a higher return than savings, another great advantage is that it is possible to invest in securities that always pay above inflation. This way, your money will never lose value.

• Investment funds

An investment fund is a type of financial instrument. Each fund is formed by the union of various investors (contributors) who come together with the aim of investing in a series of assets, which may include fixed-income securities, commodities, exchange securities, shares, among others. Generally speaking, the more diverse the fund, the lower the risk you run.

• Actions

Shares are small fractions of a company traded on the stock exchange. The money invested in shares represents the equity in the company and is used to purchase equipment and raw materials, pay employees, invest, etc.

That is, by buying a share, you become a partner in the company that issued the share. This means that you will take on the risks of the business, having a share in both the profits and the losses of the organization.

The price of shares is determined by supply and demand: the more people want to buy shares of a corporation, the higher the price goes. Thus, it is possible to sell and make a profit on shares.

• Don’t buy a beach house or a luxury car

Unfortunately, these items only bring expenses and take money out of your pocket faster than you expect. The dream of a beach house, for example, often turns into a nightmare: there is a lot of maintenance and little return.

Most people end up using it only in the summer, however, they fail to rent out the residence in the off-season. The result is a series of expenses, including taxes, monthly bills and measures to keep the property in good condition.

The same thing happens when you trade in your current car for a higher-value vehicle. Insurance costs will skyrocket, maintenance and parts are more expensive, and sometimes fuel consumption will go up as well.

Not to mention the extra costs you may incur to ensure safety – both yours and your vehicle’s – including always leaving your car in a closed parking lot.

• Avoid lending money to relatives and friends

Of course, it all depends on the situation and the friend. The problem is that friends and relatives usually have more freedom and intimacy with us, which is not always a good thing when money is involved.

The person ends up not feeling worried about being in debt or being late with the payment. Time passes and many times the loan is forgotten. So it doesn’t cost anything to be a little careful to avoid having these kinds of problems, right?

• Avoid carrying a lot of money in your pocket

It is good for you to know that carrying cash is a great temptation, as it facilitates the impulse to spend that any human being has, including buying things that are not necessary.

Therefore, the ideal is to only carry enough money for basic daily expenses in your wallet, such as food, transportation and eventual emergencies.

That’s a good strategy to avoid unnecessary expenses and manage your money wisely.

See? Managing money better isn’t a seven-headed monster. With some basic thoughts always in mind, everything becomes easier.

Oh, and keep following this section of entrepreneurs , because every Wednesday we will have news in this area!

• Don’t forget to deduct your taxes

Depending on your tax regime, you may have to file your taxes with the SAT each month and your taxes may end up being higher than you originally expected.

In addition to keeping track of your income, requesting an invoice for some of your work-related purchases can help reduce the amount you owe in the middle of the month.

Just like with cards, it is important to remember to pay your taxes within the official time frame of the month to avoid having to pay more than expected due to a delay.

• How do I measure my debt capacity?

To know our debt capacity, we need to add up all our monthly income and multiply the result by 0.35. The figure obtained is the maximum amount that a person should allocate to cover the payment of all their debts, with their interest, in order not to put their financial health at risk .

• Importance of managing your personal finances efficiently.

Personal finance plays an important role in achieving financial freedom . It can help you understand where you spend your money and how you can reduce that spending to save for the future.

It is essential for a person to manage their finances efficiently . This is why Next International Business School brings you a list of six tips that can help you manage your personal finances correctly.

• Conclusion

In conclusion, money management for beginners is a foundational skill that impacts every aspect of life, from achieving financial stability to securing a prosperous future.

By adopting simple practices like budgeting, saving, and tracking expenses, beginners can develop habits that lead to long-term success and peace of mind.

Effective money management isn’t just about numbers—it’s about fostering discipline, making informed choices, and aligning financial decisions with personal goals.

Mastering these skills early provides a roadmap for growth, helping you take control of your finances and build a secure, fulfilling lifestyle. Remember, every small step counts toward a financially empowered future!