Thursday, 29 September 2022

How to Manage Finance Carefully for The Future

Many people feel 'rich' every time their paycheck comes in at the beginning of the month. As a result, the salary was spent in a frenzy without considering the burden of the future. However, as we enter the middle of the month, the contents of the wallet dries up and savings are required.

Experiences like this can happen if you don't know how to properly and carefully manage finances. Do you already know the meaning of financial management? Financial management is an activity that includes planning, budgeting, controlling, controlling, seeking, storing funds.

Until protection is realized to achieve a guaranteed financial situation. This does not only apply to institutions or companies, but may also apply to personal financial conditions. If you do not know how to manage money well, it will certainly cause inconvenience.

How to Carefully Manage Finances

So the question is, why should you know how to manage finances? Of course, to prevent a deficit in finance. Good for managing personal finances, family or even business finances. Then what should be done so that there is no shortage situation. Here it was delivered:

1. Create a Monthly Spending Budget

The emergence of a financial deficit situation can occur due to a lifestyle that tends to be exaggerated. This happens when you use money for wants, not needs. The first way to manage finances is to make a monthly spending budget. Calculate all the monthly income you receive (from your main job or non-business). Other incomes that are not fixed in nature, such as bonuses and overtime, do not need to be calculated. It comes later, it is used to fulfill your desires, not your needs.

The next step in the method of managing finances by making a monthly spending budget is as follows:

  • Use stationery or gadgets to calculate and change your budget while checking your checkbook and credit cards so you don't miss anything.
  • Then make a budget for each month's expenses. Divide the budget into two parts, income and expenses. If you have made an account before, it is enough to fill it.
  • Subtract the new revenue from the total total cost. This is done to see the difference in positive numbers to find out that the budget is balanced (the same between income and expenses).
  • If the difference is a negative number, try to make adjustments by removing less significant weights.
  • Keep a good copy of your monthly spending budget in case it happens at a later date.

Make sure your total monthly spending budget does not exceed your total monthly income. This is to prevent debt bondage from occurring in the future.

2. Determine Salary by 50-20-30.

Besides making a monthly spending budget, there are other ways to manage finances using formulas. So what is the formula for managing finances and how is it good and correct? This is to determine the salary using the 50-20-30 principle. Divide the salary into three parts, 50%, 20% and 30% respectively.

An example of how to manage finances with the 50-20-30 principle is as follows:

  • 50% share for basic or primary needs. Basic necessities take up a larger percentage as they meet daily life.
  • 20% share for savings. With savings, you'll be better prepared if something unexpected happens in the future.
  • 30% share in the fulfillment of wishes. Giving a share or a share for the fulfillment of desires should be done in a way that does not interfere with other expenditure items.

With this formula for finance management, it will be easier for you to learn how to manage finances carefully.

3. Throw Life Habits From Payroll to Payroll

Living from paycheck to paycheck is an old habit. Once you know how to manage your money properly, you will no longer adopt this habit. How to manage 2 to 3 million salaries will be easy once you know the principles.

You can apply some of the following financial management ways to break the habit of living from paycheck to paycheck.

  • Make a budget for each month. This budget can help plan expenses and make more optimal use of revenue.
  • Make sure you know where your spending is going each month. Record each expenditure in detail to make it easy for you to evaluate expenditures each month.
  • Reduce all unnecessary expenses such as the habit of drinking coffee in cafes, shopping for clothes, transfers between banks. These expenses sound small, but they are worth it when they are collected and saved.
  • If possible, increase your income again each month.

The most important thing about managing finances is that it is much easier to manage finances by changing your mindset about salary or money. So, even though the salary is limited to 2 million, there is no longer any reason not to practice how to manage finances.

4. Plan Projection or Self-Image in Old Age 60+

Have you ever thought about what the living conditions will be like in your old age, will you be able to calm down without thinking about any burden? Or will it be difficult? Of course, not everyone wants to be a burden to their children and grandchildren in their old age.

In order for this not to happen, you need to plan a picture or projection of yourself in old age. There are two paths you can take for old age, namely with financial planning and work. Financial planning is done by investing in and preparing for pension funds.

Consider the sources of pension funds, backup plans for health, and inheritance plans such as wealth distribution. In this way, long-term retirement projections become ready. The second way is to do business or do business.

It is recommended that you have a business or invest in a relative's business at least 5 years before retirement. Managing company finances in this way is considered to be quite effective for old age.

5. Prepare an Early Retirement Fund

Thinking about pension funds should be done when you are young as the best financial management step. This aims to prevent financial problems from appearing later in your life when you retire. Therefore, there are several ways to manage personal finances to prepare for retirement, such as:

  • Set aside a few servings each month to set aside as a retirement fund preparation.
  • If possible, increase the monthly pension amount again every year.
  • Do not mix pension funds with other funds to avoid using these pension funds.
  • Invest with a pension fund so that the fund can grow even more.
  • If necessary, follow government and banks' pension fund offering programs.
  • One thing is for sure, never delay in preparing your superannuation fund early.

6. Prepare Emergency Fund for Urgent Needs

It's not just pension funds you need to prepare. You should also prepare an emergency fund to be used when there is an urgent need. So, how do you properly and properly organize and manage your finances? Consider the following method for preparing an emergency fund:

  • Start saving or investing. The deposit can be in the form of jewelry or precious metals.
  • Seek additional income if possible. Whether it's a job, self-employment or other.
  • Reduce spending on lifestyle or temporary desires as much as possible.
  • Consistently allocate about 50% of the funds (or adjust the skill).
  • For those of you who are married, you should use the cost-sharing method with your spouse.

The key to managing finances in preparing an emergency fund is to allocate funds wisely and fairly and avoid debt as much as possible.

7. Insurance as a Protection or Safety Net for Financial Conditions

Some of you may still not understand the functions and benefits of insurance. Insurance itself can be said to be a financial protection or safety net. The thing is, when something bad happens in or in the future that requires you to spend quite a bit of money as a way to pay for damages

You don't have to pay in full for it if you have insurance. The insurance company will then pay compensation. Of course, insurance is very important for your financial situation. Especially when it comes to health, spirit and tools. These three categories have the highest risk of unexpected events in the future.

8. Allocate Dues for Health and Employment

As important as insurance, you also need to have BPJS Health and BPJS Employment. This will make it easier for you to reach health institutions. Your obligation to this BPJS is only to pay dues each month so that you can get the facilities.

Therefore, paying BPJS contributions is also one of the efforts or ways of careful financial management. The BPJS fee can also be adjusted based on the class you take. You can then estimate how much must be set aside to pay BPJS contributions.

9. Carefully Check Invoices and Pay Promptly On Time

Another way of careful financial management is to be diligent about checking the bills that are due. This is so you don't have a pile of bills that could cause debt. Therefore, record as much of your invoices and due date as possible. Bills paid on time can also prevent you from being penalized for late payments.

10. Establish a Clear Savings Goal

Saving is also a way of carefully managing finances, which is easy for anyone to do. This way of managing money well applies to all people, including students, students, housewives and employees. You need to save your goals and objectives not only in saving, but also in saving. For the purpose of buying a house, going on a pilgrimage, or preparing children's education funds?

11. Set aside some money to save

Allocating some funds for savings is also one of the best ways to manage finances. With savings, financial conditions will be more beneficial in the future. Saving will make you feel calm and relaxed in life.

12. Scheduled or Term Savings Account with Automatic Debit System

There are many temptations that arise when you think about saving on a consistent basis. At any time you may be tempted to use some of your savings for things that are not really urgent. Well, for those of you who experience this often, use the Autodebet system from salary account to term savings account so the savings can add up even if you haven't specifically set them aside.

13. Generate Daily, Weekly, Even Monthly Financial Reports

To prepare financial reports, not only is the company's financial management system necessary, but as a form of financial management, you should also make regular personal and family financial reports. Make monthly, weekly and daily financial reports so that money in and out is clearer and more measurable. With a detailed report, you can not spend money carelessly.

14. Keep costs as small as possible

Recording the smallest possible expenditure of funds is crucial as a means of careful financial management. This is so you really know what the funds are for. Even if the expenditure is only 1 cent, it will still have an impact on the adjustment of the expenditure budget.

15. Invest Gradually ( The Power of Investing )

Not only do you need to save, but you also need to invest. Saving doesn't make you rich, but investing makes your assets grow. For example, by investing in gold, stocks, mutual funds, land or others, your assets will increase with the increase in the prices of these assets. So make sure you invest in the future as well.

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How to Manage Finance Carefully for The Future

Many people feel 'rich' every time their paycheck comes in at the beginning of the month. As a result, the salary was spent in a fre...