Perhaps by the time this article was published it had gone into the old date, a date that many of us feared, especially millennials. Because on this date we often feel the name is poor, right?
Do you always feel that the money you have is never enough to meet all your needs? Even though you just got a payday or got a delivery from your parents, but not at the end of the month the money you have is up. Lost somewhere he ran. This makes you more dizzy until you become less excited to live the day and eventually become unproductive, feeling the need and cost of living is getting harder to live.
But wait a minute, the question I want to ask is whether your life needs are heavy or are you the only one who can not manage your personal finances? Let’s be honest and ask yourself this question right now.
Well, in this article I tried to discuss a little tips on how to so that you can all manage your personal finances well and some benefits that you will get. So keep listening to this article until it runs out so you can get the whole insight. Don’t forget to share it with all your friends whose fate is the same as yours so that they also get the same insights as you.
3 Effective Ways to Manage Finance
There are many ways you can manage your finances, here are three effective ways I think to manage your finances to stay safe at the end of the month and be financially free in the future.
Make arrangements and record your expenses periodically. But it’s not that simple to implement it, because I’m guessing there are still many of you who until now have not known what your money was spent in the space of a month. Suddenly it’s not the end of the month that your money seems to be gone.
This happens because when you have money, you can unknowingly spend it on small things, which if calculated can make your finances more drop. Such as paying for parking, buying coffee, paying for transportation, and other necessities that are unknowingly worth more than your main needs such as eating.
Budgeting tips that are popular and widely used by most people is by the principle of dividing your income at the beginning of the month into four groups namely 40%, 30%, 20%, and 10%.
The largest portion of allocation is certainly to meet all your basic needs that if you do not fulfill it will interfere with your life such as, eating, paying for electricity, shelter, and others.
If it’s possible, adjust your food menu to your income. Avoid expensive meals every day if you have insufficient income. Get used to cooking by yourself or looking for food that will meet your needs, not just your own.
Allocate 30% of your funds for investment, both long-term and short-term. This will be very useful when one day you have emergency expenses such as accidents, medical treatment, and others that you can not guess when it will come.
This 20% value can be allocated for your enjoyment, eating your favorite food, watching a movie, hanging out with friends, treating friends, and so on. Well, what’s become a lot of misperceptions is that out there are still a lot of people who spend more than 20% of their funds on these fun activities.
This is not wrong, but it does little to affect your main needs. So it is not uncommon for people to feel that they have no money at the end of the month, one of which is the over-allocation in this 20% budgeting. They use more than 20% of their funds for pleasure alone.
This 10% value must be used for charity or charity, because most of the wealth you have is the right of others also in it. With you doing charity can also make you feel more good because you can be useful to others by helping those in need. It will make your heart and mind calm so that later you will be able to increase your income in the future.
This distribution is not absolute so you can change according to your current priorities if you are looking to save for the future, you can reduce the 20% allowance for pleasure allocated to the distribution of funds that are 30% for investments and savings.
2. Saving money
Having savings already entered into the previous language, this saving is important for you to have both long-term and short-term. So start planning your savings that you can use to pay for emergency expenses or realize your long-term dreams. Like buying a house, a car, or proposing to the doi so that you not only stop by but you can make a house, a place for you to lean back when you are tired of making a living.
3. Pay all debts
Debt-free is one of the factors that makes you more comfortable in managing your finances because you have no expenses other than your living expenses. Having a lot of debt makes you stressed, so it can decrease your productivity at work. This debt can also be an endless vicious circle.
When you don’t have the money to meet your needs then you owe to meet it, when you can’t afford to pay your debt in advance then you’ll be able to owe it again to pay it. So much so that your life partner isn’t her but instead owes you your own debt.
Benefits of Managing Personal Finance
The various benefits that you get when managing finances can further motivate yourself when you have implemented habits in managing finances, so that when you find obstacles in the middle of the road you can overcome them and can get back on the track in your financial plan.
1. Have a regular life
Managing your finances means that you can sort out and choose which needs you really need and what you need. You can become more disciplined in buying something so you can slowly eliminate your bad habits in shopping for something you don’t need.
2. Life becomes calm
Sometimes extravagant habits plus not managing your finances properly make you often underfunded at the end of the month. This increases your chances of debt to meet all your needs. Managing your finances can make your life calmer, because you can be free from debt and the funds you have will suit your needs.
3. Have a habit of saving
Save up again. Yep, people your age might prefer to go spend a lot of money hanging out, shopping online, and so on without managing the money they have. This is in line with a survey conducted by The Future of Money in which nearly 20% of millennials make no investments at all.
The survey, which was also conducted by gobankingrates, found that 41% of millennials in the United States have no savings at all. This is if you use it as an opportunity to invest then the income you set aside will be doubled. Starting from a simple habit of saving from an early age.
4. Life becomes more frugal
Successfully managing your finances means that you have managed to distinguish between the needs and desires that exist in your life. You become wiser in making a decision to buy an item that you need or desire. This makes your life so much more frugal and you can feel #enjoylife.
5. No hesitation in spending money
Finally, if you have a large unexpected expense suddenly, you will not hesitate to spend money. This is because at the beginning you have managed your finances and have savings. Preparing for unexpected things such as going to the doctor when you are sick.