Como Organizar Sua Vida Financeira - Gustavo Cerbasi

Do you know exactly how much you spend? Do you know what you need to buy? Is your financial life balanced? The author Gustavo Cerbasi will help you to answer these questions in the book “Como Organizar Sua Vida Financeira”!

If you don't know how to do it, calm down! Here you will find the best techniques and strategies for organizing your financial life in a didactic and simple manner.

Got interested in achieving a prosperous future for you and your family? Continue this reading with us!

The book “Como Organizar Sua Vida Financeira”

The book “Como Organizar Sua Vida Financeira”, in free translation from Portuguese “How to Organize Your Financial Life”, uses an objective, didactic and interactive approach to the reader to instruct them on how to develop personal financial intelligence.

In the end, the author Gustavo Cerbasi, discusses the world of personal finance, teaching how to assemble his own planning with appropriate tactics and models.

The work is part of a collection published by Expo Money and contains 160 pages divided into 10 chapters.

Who is Gustavo Cerbasi?

Gustavo Cerbasi is an administrator, writer, financial advisor, speaker and teacher. Finance Specialist from New York University and author of 16 books, highlighting the Best Seller “Smart Couples Get Rich Together”.

He is considered a reference in financial health and education, giving lectures to anyone who wants to know how to invest in the stock market, negotiate debts or organize the financial life.

He was elected by Época Magazine as one of the most influential personalities in Brazil.

Why should I read “Como Organizar Sua Vida Financeira”?

Whether you want to learn the basics of personal financial planning or just how to organize your finances, this book is for you!

It’s recommended for everyone who wants to get the right tips in order to make more money-conscious decisions, avoiding common mistakes that disturb financial development.

So if you want to balance your finances and plan a more prosperous future, stay with us!

What can I learn from “Como Organizar Sua Vida Financeira”?

• Self-knowledge is critical to financial success. Ignoring or omitting expenses will only postpone the problem and leave the dreams further from fulfillment;
• The household budget is the tool that assists families in organizing expenses and income. It helps keeping expenses under control;
• You must know your tax obligations, otherwise, you may have problems;
• Planning is not just about paying for household expenses. All family buying desires should be equally budgeted, regardless of value;
• Credit cards and loans are not always villains. It's important to understand these tools and use them wisely;
• Unforeseen events happen, so having a contingency plan in mind is critical to ensuring your family in unexpected situations;
• Investing periodically and often will ensure dreams come true and a comfortable future;
• Studying and keeping up to date will improve your knowledge and consequently, decisions will tend to be more assertive;
• For planning to be successful, focus is required. Actions such as keeping finances at your fingertips will make all the difference on the road to success.

Are you excited to know more about all these topics? Continue this reading with us!

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What is the importance of Self-Awareness?

In this chapter of the book “Como Organizar Sua Vida Financeira”, the author Gustavo Cerbasi explains that the key to success is self-awareness of your current financial situation.

For this, it’s essential to involve the family to understand all the expenses, debts and investments you have.

Cerbasi shows that the value of his investments doesn’t include assets such as his home or car, but the amount of money invested in some applications.

He also quotes the concept of net profitability, and for him, it’s the value obtained in investments after the redemption tax discount.

But beware: income tax is deducted only when the amount invested is redeemed. This should be taken into account when calculating, as well as the period inflation rate.

Thus, the net return on your investments should be calculated and taken into account in financial planning.

In addition, the book presents 4 indicators that can be used to assess the equity situation, these are:

• Minimum Survival Equity (MSE): This concept is nothing more than an emergency reserve that should be used in the event of unemployment or a situation beyond your will as a disease. This reserve must be made in an investment that has immediate liquidity. To find out your MSE, just perform the calculation below:

 MSE = 6 × Average Monthly Family Expenses

• Recommended Minimum Asset for Your Security (RMA): The constitution of this asset is the ballast to maintain your life for several months. However, there is a differentiation to calculate this indicator according to its level of employability. This reserve is also directed to cases where the investment has immediate liquidity. To calculate it, you must use the following formula:

RMA = 12 × Average Monthly Family Expenses, for good employability.

RMA = 20 × Average Monthly Family Expenses, for low employability.

• Ideal Equity for Your Age and Consumption (IE): This indicator will help you understand if you are on the right track in asset accumulation, so it takes into account your age:

 IE = 10% × Average Monthly Family Expenses x Age

• Equity Required for Financial Independence (ERFI): The result of this calculation is how much you need to live the rest of your life with only the net income from your investments and small consumption of your reserves, making conservative investments:

ERFI = 12 × Average Monthly Family Expenses ÷ Annual Net Return on Investments

The author concludes the chapter by suggesting initiatives for your personal financial project, such as understanding your current finances, making smart choices, and devising a plan to meet the first indicators presented.

How to make a Home Budget?

Here, Cerbasi explains that it’s essential to have a balanced household budget each month, so plans and dreams can come true.

He suggests that the family’s expenses should be outlined in an Excel spreadsheet or in a paper, for example.

To set up this budget, you need to subdivide your spending into categories, just like the example below:

• Housing Expenses: mortgage, rent, municipal property tax;
• Health Expenses: health insurance plan, consultations;
• Transportation Expenses: fuel, parking, motor vehicle property tax;
• Personal Expenses: hairdresser, gym;
• Education Expenses: school, college;
• Leisure expenses: cinema, sightseeing, travel;
• Other expenses: bank fees, tips.

In addition to including these categories, for the budget to be successful, it must be based on some assumptions such as:

• Periodicity of control;
• List of revenues;
• Net revenue;
• List of fixed expenses;
• Available balance;
• Financial investments; and
• Cash surplus.

The author concludes the section by warning that the budget should be monitored and, if necessary, periodically corrected and adjusted to meet personal financial goals.

How to use your Budget wisely?

Just listing your spending is not enough for your budget to be successful. With that in mind, the author suggests 8 fundamental steps you should follow:

1. Always write down or keep the receipts of expenses;
2. Arrange expenses to understand your consumption patterns;
3. Compare evolution over time;
4. Reflect on the quality of your choices;
5. Stipulate changes in your consumption in order to have more quality;
6. Pay attention to your new choices so that they are in line with your goals;
7. Always remember that your choices have consequences;
8. Use the current budget to simulate extreme situations, such as losing a job or receiving a large amount of money.

The book “Como Organizar Sua Vida Financeira” also addresses the actions that should be included in your planning routine, such as continually reviewing the budget, making the necessary corrections and adjustments, and taking the time to prepare and track the control sheet.

In addition, Gustavo Cerbasi suggests automating the saving habit by earmarking part of your income on scheduled applications monthly. A monthly saving of 10% to 20% of earnings is suggested.

It’s recommended that the budget has the vision of an end. Example: “This month I spent $200 on restaurant meals, next month I will spend $ 150.00”.

The unforeseen should also be equally “foreseen”, with about 5% of your monthly income sufficient to cover these expenses.

This chapter contains 3 more important advices:

1. Arrange the salaries of your expenses in chronological order;
2. Debit some of the expenses, paying attention to the companies you trust; 
3. Plan to pay taxes and other annual expenses.

Be sure to involve the whole family on it, including your children. Explain the importance of financial planning.

Also, be sure to keep your payment slips by type and by term! They may be important in the future.

There are 2 types of income: stable and variable.

For example, a civil servant has the stability of having his monthly income uneventful. This may cause some comfort on the part of the family because the family knows that they can count on this money.

Don’t fall into this huge trap! The household budget must exist regardless of the income situation.

But a self-employed person has to deal with variations in income month by month, which is a further challenge. Therefore, they should be more organized to meet their monthly expenses and still form savings for the realization of their dreams.

To conclude, the key to understanding variable income is to create a year-round mapping of revenues and thereby create a lean standard of living by exploring times that are more prone to eventual consumption.

Shopping: Do you know how to plan for it?

The book points out 6 fundamental tips for making your purchases a success.

Tip 1 - Have a List

Purchases must be specified in financial planning, regardless of whether they are ordinary or occasional. So always have a list at hand of your desires and needs.

For example, when shopping, we get lots of stimuli and if we don’t know exactly what to buy, we are tempted to fall into traps.

Tip 2 - Always Know How Much You Can Spend

In addition to knowing what you are going to spend your money on, it is crucial to know what is the maximum amount you are pretending to pay for this item, which helps a lot in decision-making. Always keep this value in mind before leaving home.

Tip 3 - Always Search

Researching prices is necessary before making a decision. This will probably save your money.

Tip 4 - Set Your Consumption Goals and Build Your Plan

Plan the goods you want to buy and set a deadline to buy them. Also define when each of them will be acquired, from an order by priority, for example: “I'm going to buy a washing machine and save $100 a month for a year”.

It’s important that this budget is made jointly with the family and contains short and long term plans.

Moreover, savings that will be invested, must contain the yield rate of the money invested.

Tip 5 - Be True to Your Goals and Track Your Performance

To be successful, it’s critical that you stay true to your goals and that your performance is tracked as your purchases are prioritized.

Always review your planning and see if you are really achieving what you anticipated.

Tip 6 - Negotiation/Communication Strategy

Before you go shopping, plan your trading strategies so as not to fall into sales talk.

Credit

If you think credit is the villain, you would be surprised to read this chapter of the book “Como Organizar Sua Vida Financeira”. With education and awareness, credit can be an important ally in anticipating your dreams or even a means of organizing your financial life.

The author Gustavo Cerbasi suggests that you should understand how your credit works, its limits and what are the advantages offered by the bank in which you are an account holder.

Here are some tips:

• Always evaluate credit alternatives for the best value for money;
• Study bank benefit programs and how they can be used in your favor, such as fees and fee exemptions;
• Be aware and always have control of your spending and what you need to have a financially balanced life.

Security - More people depend on you

At this point of the book, it is discussed what to do to ensure the standard of living for the present in the future. According to the author, the leftovers in your budget will guarantee a wealthy future.

In order to understand this concept, you need to know the risks. If you are a civil servant, for example, there is probably no problem with a temporary loss of income.

However, in the case of private sector workers and the self-employed, several factors can lead to a sudden change in family income.

By this way, you should ask yourself the following questions:

• “What are your sources of income, do you have more than one?”
• "How many dependents do you have?"
• “How many months will the family be impacted by your consumption patterns, if you are unable to work?”

After assessing your financial situation, you should take action to ensure your safety even with complications.

Here are some examples of actions to take to reduce your risk:

• Constantly review the budget to reduce spending;
• If you have a property and have Severance Pay Fund, try to repay your debt;
• Discuss with the family alternative plans for hypothetical cases;
• Diversify your investments;
• Study ways to have more than one income;
• If you are a liberal professional, consider taking out professional insurance.

Investments - Necessary Goods

Concluding the book “Como Organizar Sua Vida Financeira”, the author Gustavo Cerbasi says that we must understand how to structure an investment portfolio based on your investor profile!

First and foremost, it’s crucial to have a bank or brokerage checking account where you will direct your investments.

It’s also important to always be aware of the risk level of the investment as it may be high or low.

Have a diversified portfolio of investments, such as fixed income, direct treasury, stocks, among others. Study investment strategies to make better and better choices.

Books about financial planning

For Robert Kiyosaki, author of the bestseller “Rich Dad, Poor Dad”, the journey to enrichment should begin as early as possible, and it involves assessing your finances, setting personal goals, and seeking the knowledge you need to achieve your goals.

In the book “The Dumb Things Smart People Do With Their Money”, Jill Schlesinger says that people should not invest their money in what they don’t know. You must have good planning and a thorough knowledge of where to invest.

Finally, for the author of “Think and Grow Rich”, Napoleon Hill, the first step to becoming rich is to have a strong desire to be rich. It may sound simple, right? But this desire has to cause fire in the belly and you must have a good deal of persistence.

How can I apply the ideas from “Como Organizar Sua Vida Financeira”?

This book is easy to read and has many practical applications that can be applied separately or together.

With the information contained here, you can put in place organizational strategies, set up your personal planning and adjust once and for all your family finances.

The tools and techniques outlined in this book are critical to winning the long-awaited financial organization, just follow the walkthrough and put it into practice.

But to help you out, let’s highlight the most important steps you should take:

• Write down your expenses;
• Plan your budget;
• Control yourself! Saving means having more money for what is really needed.

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