Any amount of income will never be enough to meet your needs if you don’t know how to manage finances. Rich people will experience financial problems if they do not know how to manage personal finances well.
In fact, managing finances is the main key to achieving financial success. Especially with the increasing cost of living requires us to be smarter in managing finances so as not to get into debt.
If you are not married or have a family, let’s familiarize yourself with now to manage finances better so that needs can be met or you may end up needing an easy instant cash advance online loans service provider.
Want to know how to manage personal finances? Let’s look at the following review:
We can manage personal finance by understanding two simple concepts, namely income and expenses. Income is the amount of money you earn such as monthly salary, operating income, investment income, pension, rent and so forth. Meanwhile, expenses are payments of products or services with income. Personal finance consists of various topics, such as managing finances, personal financial records, and managing loans wisely. Understanding the fundamentals of financial management will make you live well starting today and building a stable financial future.
Personal Financial Records
Have you made your personal financial records every month? If not, start recording your income this month so you can manage your personal finances well. This income breakdown comes from salary as a company employee or a civil servant. You should also note if you get income from other professions or side businesses such as freelancers, online taxi drivers, online sales businesses, tutors, home rental businesses and so on.
After you record your income details, then allocate your income to the expenditure budget, as below:
Every month, there are important needs that must be met routinely, such as buying kitchen needs, buying bathing needs, paying for electricity and water, and so forth. At least 50% of monthly income must be set aside for these routine needs.
If God is willing to give you a long life, you can enjoy your financial success when you have an investment. Therefore, allocate 12.5% of your income to investments in various sectors, such as property, stock exchange, P2P, forex, mutual funds, or others. Investment funds can also be used to deal with the high cost of children’s education or to prepare your retirement funds in the future.
Entertainment or Vacation Costs
It is undeniable, stress can be experienced by everyone. If allowed to drag on, stress will turn into depression and even cause chronic diseases such as heart disease. Therefore, you need to prepare a special budget for entertainment or holidays to release stress. Collect about 10% of funds for entertainment or holiday purposes.