Did you know that improving your relationship with money can make every other aspect of your life easier? Because who doesn't want to live in peace without thinking about the headache of expenses, debts, and being negative? So for that, just improving your financial organization.

And you, do you already know what a good organization of your finances is? Because both good financial planning and positive attitudes towards your household budget make all the difference in avoiding stress over money.

So, if you have a lot of worries in your financial life, this article will help you to improve your relationship with money this year. So keep reading and check out what information we have for you!

A first essential reflection to understand how to improve your relationship with money is to understand how this relationship is. Because have you ever stopped to think if you really have good attitudes and results with your financial decisions?

So, it's time to think about it. First, you need to make a list and write down all your expenses, debts, installments, bills, etc. And then, check if you have too many outstanding debts, if you are overpaying your purchases and your credit card bill.

Because if you are doing all this, the chances of already being indebted or even over-indebted will be greater. For example, if you have debts with the revolving credit card, with the overdraft or with installments in arrears in the payment of loans.

So these are all red flags for your relationship with money. Because clearly an indebted person, negative in credit protection bodies, or who has no idea how much he receives or how much he spends, is not in control of his financial life.

But don't worry, it's always time to change those attitudes and improve your relationship with money in 2021! So, to help you, we've brought some good tips on attitudes you can take, habits to create, and others that you should get rid of at once.

So, did you identify with the profile of those who need to improve their relationship with money? So keep reading, and check out our 8 tips that we brought especially to help you. Let's go?

As we said, there is a way to make your relationship with money even better this year. And for that you will need a new look at your finances, your financial planning, your spending, everything! 

But don't be scared, it's not a seven-headed animal as it may seem. And little by little you will see the positive results in all aspects of your life. Because who lives in peace if they are negative, worried about money and debts? So let's change that now! Check out our tips below.

That is, you need to have real knowledge of everything that comes in and out of your bank account. Therefore, you need to understand the cash flow of your money. First, you must know what your exact monthly income is, and what essential expenses you will have each month.

For example, some types of essential spending are:

This way you will know what expenses you will need to keep every month. But it's also essential that you understand what your non-essential expenses are. That is, what you can buy on impulse, spend for leisure, entertainment, etc. 

For example, you might be spending on non-essentials like:

That is, it is important to understand your spending profile as a whole, whether essential or non-essential. Because only then will you be able to understand where you are exaggerating in your expenses, and you will be able to create strategies to modify this situation.

In addition, also know what your debts are in general, the active ones, the ones already paid. So, write down everything, deadline to pay, total, how many installments are still left. Organize your debts by amount and priority. This will make it easier for you to decide where to start paying if you are having trouble paying all at the same time.

In addition to understanding and organizing your cash flow well, you need to create a good strategy to save money. Because only by creating new habits like this can you improve your relationship with money.

So, you can already have a good idea of how much comes in and how much goes out, where you can cut expenses, etc. From there, it will be easier to create your savings goals, establishing how much money you intend to save every month.

And stick to that goal! Preferably try to invest this money in investment funds with long-term liquidity and low risk. For example, you can invest every month in CDB's with a period of 1 year for withdrawal. Thus, you will know that you cannot change that value before 12 months of term.

However, it is also important to have at the same time an amount that you can keep so that you can withdraw it if you need it in emergencies. Therefore, set aside a portion of your savings for an investment of daily liquidity, such as the various investment funds that banks offer.

But be careful with the automatic rescue function that some options will give you. Because that way you spend your savings without even realizing it. So, briefly set savings goals, have an amount you can't touch and one available for emergencies.

Now that you have a good idea of all your outstanding debts, and have separated them by maturity, total amount and number of installments, it's time to think about negotiating or paying off your debts.

So start by thinking about the highest outstanding debts. Which ones could you pay off faster and which ones take a long time? Think about how to pay off the easiest debts and renegotiate the biggest and most difficult debts to pay.

Because larger outstanding debts in arrears will mean ever-increasing interest rates and money to pay. So settle those big debts first. Then, think about smaller debts that have low interest rates, try to pay off as many as you can.

But never stop negotiating your debts, because that way you can get longer terms to pay, lower interest rates, etc. This is a golden rule for improving your relationship with money in 2021.

Because the less debt, the more money left for you to save, invest and put in your favor!

As we said earlier, it is essential that you have a good emergency reserve. So put this as an essential financial goal! Try to find solutions to be able to save an amount every month for this emergency reserve.

And no matter how small that amount is, it will make all the difference when you need money. So discipline yourself to stick to your savings goals, especially for creating an emergency reserve. 

Therefore, put the money for this reserve as an essential monthly expense, and never fail to separate this amount from your monthly income when doing your financial planning. 

By creating these habits, you will automatically improve your relationship with money and get many positive results from it, be sure!

One of the biggest mistakes people make is getting lost in too many installment payments. Because buying in installments can give the false impression that you are spending less, because the value is diluted. But interest rates may apply to the installments, do not forget, especially for long installments.

And also, the higher the installment, the greater the chances of you getting lost amid so much installment spending. That is, the installments accumulate, and what seemed cheap and possible to pay can become a huge headache.

Therefore, avoid long installments. But if necessary, write down and keep track of all the outstanding installments you still have.

Another great danger to having a good relationship with money is allowing debts with overdraft or credit card revolving credit. 

Because these debts have the highest interest rates in the national market, and can reach up to 400% per year in the case of the revolving card. A lot of money to pay interest, right?

So, to avoid any type of problem that could end up in more debt, you must avoid using an overdraft or not being able to pay your card bill at all costs. So, always be aware of your credit card expenses, and your balance in your bank account. 

Create these habits, and over time you'll see that it won't be difficult to improve your relationship with money. You will feel the difference.

Another attitude that will make all the difference in your relationship with money is to reduce the use of credit cards. Or stop using altogether! That's right, if you're already negative and with a lot of debt, it's time to forget about your credit card at once.

Because most people end up spending more than they can afford, simply because the money seems easy. Since the invoice only comes in the next month and until then you don't even realize how much you've already spent on your credit card, right?

In this way, there is a great risk of default on your card statement. And then you fall into debt with the revolving interest rate on your credit card, one of the highest in Brazil! Therefore, it is not worth the risk for those who already need to improve their relationship with money, is it?

So you can start by trying to lower your card spending to a minimum. And over time, it decreases until your monthly bill is zero. It will certainly be rewarding to see the invoice cleared to pay, right?

In addition to everything, you need to understand that there are good options in investment assets for you to put your money and make it yield. Therefore, it is not necessary to leave your money stored in the savings account, which has ceased to be advantageous for some time.

Thus, learn about financial education and your investor profile. That way you improve your relationship with money and make it work in your favor! Instead of letting your money stand still, you put it together and put it to yield. Very interesting, isn't it?

And for those who want to start in the investment world, one of the most interesting fixed income assets is the CDB (Bank Deposit Certificate). Because it offers a guarantee of investment protection, and still has low risks due to its pre-fixed profitability.

That is, you know in advance the profitability of that asset, and the average of the last 12 months or 24 months. And for sure, your money will have better returns than if you simply leave it in the Savings, right?

So, research more about investments, especially about the CBD to start with, and create strategies to make your money work. That way, you improve your relationship with money, get rid of debt and learn to work with your savings in order to make the value multiply.

Did you just see how much interesting stuff? And it may seem very complex, but it's not. You just need to know your priorities and have control and organization over your finances. After all, those who have an organized and debt-free financial life live with much more peace of mind! So, get to work.