How to Manage Your Money and Never Live in Debt Again
- Robson Silva
- Sep 24, 2025
- 6 min read
Learn how to manage your money, get out of debt, and invest to build wealth. A practical, clear, and straightforward guide to transforming your financial life.
Introduction
Have you ever wondered where all your money goes at the end of the month? If the answer is "I don't know," you're not alone. Research shows that 69% of people don't manage to save any of their income. In other words, seven out of every ten people you know are constantly in the red or on the edge of their budget. Only three manage to save anything, and even that doesn't mean they invest well.
The good news is that managing your money doesn't have to be complicated . With a few mindset and habit changes, you can transform your relationship with finances. This article will show you, clearly and practically:
Why so many people get lost on the financial path.
The impact of debt and how to get rid of it.
The three types of financial mindset: poor, middle class, and rich.
How to organize your budget with the 50/30/20 rule.
The importance of assets, liabilities and investments.
The financial life cycle: from youth to retirement.
Practical strategies to start applying today.
Let's go?
Why is it so important to learn how to manage your money?
Managing money isn't just a matter of math; it's a matter of life. Many people get into debt because they want to anticipate pleasures they can't yet afford. They buy a new car, a high-end cell phone, or pay for trips in installments—and end up creating a huge burden in the future.
It's what I call "being a rich person" : living on appearances, trying to appear well-off, but with no security whatsoever. The consequence is a life full of debt, stress, and frustration.
Debt: the silent enemy
Let's look at a practical example. Imagine you have R$10,000 in debt on your revolving credit card , with 12% interest per month. It seems heavy, but manageable, right? Well, in five years, that debt could grow to almost R$9 million ! Yes, you read that right.
This happens because compound interest works against you. Therefore, before investing a single cent, the priority is to eliminate debt —especially high-interest debt. Bad debt isn't just a delay: it's a prison.
The Three Financial Mindsets
People handle money differently. Understanding this helps you identify where you're at and where you need to go.
1. “Poor” mentality
People receive their salary and spend it all on basic expenses: food, rent, electricity, transportation. When they have a little left over (R$50, R$100, R$200), they spend it too. The money never becomes an investment. The result: they live in a cycle of survival, always "putting out fires."
2. “Middle class” mentality
Here, there's already a slightly higher income. This person pays expenses, but also buys liabilities , believing they're investing. Examples: a car, a home, expensive appliances. The problem is that these items take money out of their pocket (maintenance, taxes, depreciation). In the end, despite working hard, they don't accumulate real assets.
3. “Rich” mentality
The wealthy mindset is different. Salary doesn't just go toward expenses or liabilities. It's used to buy assets —anything that puts money in your pocket: stocks, real estate funds, fixed income, businesses. These assets generate passive income , which is reinvested in more assets. Over time, the person starts paying expenses with dividends, not with salary. This is the cycle of prosperity.
Smart Budgeting: The 50/30/20 Rule
One of the simplest and most efficient ways to organize your budget is to imagine a pizza divided into three slices:
50% – Essential expenses: housing, food, transportation, health.
30% – Optional expenses: leisure, hobbies, restaurants, gifts.
20% – Future: studies, emergency reserve and investments.
Why does this rule work?
It ensures that you live with dignity (essentials).
Allows you to enjoy life with balance (optional).
And, most importantly, it creates the habit of saving and multiplying (future) money .
If you don't set aside that 20%, you'll be stuck in the middle-class cycle: you work, you spend, you pay off liabilities, and you never build wealth.
Assets vs. Liabilities: The Key to Prosperity
What is a liability?
Anything that takes money out of your pocket. Example: a car, a mortgage, an expensive cell phone. They may bring comfort, but they drain your budget.
What is an asset?
Anything that puts money in your pocket. Examples: stocks, real estate funds, Treasury bonds, and your own businesses. These are investments that generate income without requiring you to work longer hours.
The life-changing question: Does your salary go to assets or liabilities? This decision determines whether you will become richer or poorer over the course of your life.
The financial life cycle
Life is made up of phases, and each one requires a different approach to money.
Youth (development): little money, lots of health and time. This is the perfect time to learn and start investing small.
Adulthood (growth): higher income, career development, starting a family. It's time to control spending and accelerate investments.
Maturity: peak of career, higher salary, but also greater responsibilities. It's time to build wealth and think about retirement.
Decline and retirement: less energy, poorer health, higher costs. Those who didn't prepare in advance struggle to maintain their standard of living.
Moral of the story: the sooner you start, the easier it will be to reap the rewards in the future.
Practical strategies to get started today
1. Write down everything you spend
Use a notebook or app. Knowing where your money goes is the first step to controlling it.
2. Eliminate debt
Expensive debts (credit cards, overdrafts) should be a priority. Negotiate, pay in installments, or exchange them for lower interest rates, but don't keep them.
3. Create an emergency fund
Save 3 to 6 months of expenses in a secure investment (such as a Treasury Selic bond or a CDB with daily liquidity). This prevents further debt.
4. Invest in knowledge
Courses, books, lectures. Learning is the most powerful asset. The more you know, the more value you generate and the more money you can earn.
5. Invest in assets
Start small, but start. Treasury Direct, real estate funds, stocks, private pensions. The important thing is to get into the asset game.
6. Adjust your standard of living
Don't fall into the trap of increasing your expenses as your salary increases. Live slightly below your income and use the difference to invest.
Practical example: the magic of compound interest
If you invest R$1,000 per month at 12% per year for 30 years, you will have accumulated more than R$3 million . Now, if you wait until 10 years from now, investing the same amount, you will have just over R$900,000 .
The difference is stark: time is the most powerful factor in investing . The sooner, the better.
Conclusion: who controls whom?
Money is a great servant, but a terrible master. If you control it, it works for you. If it controls you, you will be a slave to debt and stress.
Start today, even if it's small. Don't wait to "earn more" to organize your finances. Those who don't take care of the little, also don't take care of the much.
Remember: planting seeds every day is the only way to reap rewards in the future.
FAQ – Frequently Asked Questions about Managing Money
1. Do I need to earn a lot to invest?
No. You can start with R$30 in Tesouro Direto. The most important thing is habit.
2. Is it worth financing a house?
It depends. Often, financing costs more than rent. Consider the interest rates and your current situation.
3. What is better: paying off debt or investing?
Always pay off expensive debts first. High interest rates destroy any investment.
4. How do I know if I'm spending too much?
If you have little or nothing left to invest, you are spending beyond your limit.
5. What is the secret to getting rich?
Spend less than you earn, invest the difference and repeat this for many years.
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