Financial planning should be carried out in accordance with your reality

Financial planning should be carried out in accordance with your reality

  • TikTok, YouTube and Instagram have invaded people’s lives. However, these tools and the flow of information they bring make it necessary to know how to filter content very well.
  • When you try to copy a model that doesn’t match your reality, you start believing that financial planning is something unattainable.
  • Just as important as making a financial plan is keeping track of it over time.

Social networks TikTok, YouTube and Instagram have invaded people’s lives. However, these tools and the flow of information they bring make it necessary to know how to filter content very well.

Over the past few years, I’ve seen many people recommend “cake recipes” for financial planning, outlining the ideal percentage of your paycheck to spend on each type of expense.

The intentions of these influencers may be good, but in practice it can lead people to distance themselves from financial planning.

When you try to copy a model that doesn’t match your reality, you tend to believe that financial planning is something fixed, unaffordable, and unattainable. And that’s the biggest mistake you can make.

“Financial planning is not a straitjacket, it is an aid to achieving your goals. The idea is to maximize consumption based on your income, adapting over time to changes in income and/or needs,” says Fabio Araujo, financial planner and author of Sociedade da Fortuna and O Cão Pidão . about financial education of youth and children.

Two ways of financial planning

In talking with Araujo, we came to the conclusion that there are two ways to plan financially: based on a specific goal or achieving quality of life in general over time.

The first one is easier, because if you need 5000 reais for 12 months, then it is easier to calculate how much you will need to invest each month, what types of investments are ideal for this, and what adjustments in your budget will be required. . . .

The second model of financial planning requires a deeper understanding. It’s like going to the doctor: first you need to make a diagnosis, and then prescribe treatment.

To get started, ask yourself: Do I have a fixed or variable income from my job? How big is this income? What are my main expenses? Do I have debts? Dependents?

In addition to practical information about your finances, it is important to map your behavior. Are you prone to compulsive spending? Are you good with your credit card? Do you get into debt easily? Knowing yourself is the first step in creating the tools to avoid detours on the path to the financial life you want.

For Milena Germano Rodriguez Ferreira, a Sao Paulo public school high school student who completed the Multiplicando Sonhos financial education program, financial planning is all about spending less than you earn, recognizing unnecessary expenses, and above all understanding the consequences of doing so. reasons for change in your life and in society.

Once diagnosed, you should make it a habit to write down your expenses and everything that goes into your account. This will make it easier to understand where your money comes from and where it goes.

Carefully analyze what is superfluous for you and what is essential, and understand: if you, for example, love football, you have no problem with allocating part of the budget for going to the stadium, provided that you are in moderation.

Giving up what you love to do to try and achieve extreme levels of money saving is the easiest way to give up financial planning altogether. So I reinforce: create your own “cake recipe”.

Garnish

Just as important as creating a financial plan is keeping track of it over time. It needs to be functional throughout its life, so you should redo it as many times as necessary.

Has your income changed, for example? Review planning and rebalance accounts.

If necessary, do not hesitate to contact a financial advisor. Of course, this will not be a cost, but a long-term investment. “A financial advisor has two roles: a technical role, which is to provide the person with relevant information and tools according to their profile and goals, and a mentor role, as they help people who are not in the habit of thinking about their finances to get started. do,” Araujo says.

For 18-year-old Renata Abreu, a third-year public school student fresh out of the Multiplicando Sonhos financial education program, financial planning is a guide and requires dedication. “You can’t stop and wait for things to happen, but with the right help it gets easier and the path gets wider to see new opportunities.”

In the end, don’t forget that whether you’re inspired by a qualified financial advisor or the person you follow on TikTok, you and your family are doing your financial planning on a daily basis. Use the information available to your advantage and take charge of your financial life.

And finally, Milena and Renata agree that the recipe for financial planning requires dedication and focus, but it is useless to stand still and wait for a turn in your financial life. We must start!

Tell me in advance if it was worth it, okay? Good planning!

* Collaboration between Giovanna Castro and Andrea Tavares

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