Managing your monthly finances is actually a difficult and difficult task. Many people learn or just read articles on how to manage finances properly and correctly from the experts directly and via online. That’s fine, considering managing finances is very beneficial for your financial future.
Financial management not only takes into account every income and expenditure, but also learns how the two of them operate in a balanced way, not having a bigger stake than a pole, causing a financial deficit. Therefore, it is necessary to know the details of short-term and long-term expenditure, as well as to make savings efforts.
If you are still confused, here are some ways to manage finances that are guaranteed to be effective in building a more stable financial future.
1. Set Salary with Principles 50-20-30
How to manage finances on this one is very simple, but not many people know. So set a budget with a 50-20-30 system. What is that? For every salary or income you receive each month, allocate 50% of the money for daily living expenses, such as food, transportation costs, paying rent for houses, electricity and water bills, including credit card bills.
Next, set aside 20% of salary for savings and investment. You must allocate money for emergency funds, for example when you fall ill, a broken motorbike, or other unexpected event. Don’t forget to use it for investing in pension funds or other investment instruments. These funds should not be contested.
While the remaining budget of 30% of your salary for entertainment, holidays, shopping for clothes or buying desired items. If this budget allocation is considered too large, you can reduce it. Actually you can adjust it yourself by sticking to the 50-20-30 principle.
2. Describe yourself at the age of 80 years
Right now you are still in the age range of 20-30 millennials. But try to imagine yourself at the age of 80 years. Do you still want to work to earn money or want to enjoy life with your children and grandchildren? If you do not want your retirement to be miserable without sufficient financial provisions, of course you should start thinking about retirement savings since you are young.
Imagine also at the age of 80 years, you already have a home and a vehicle, send your children to graduate school, the whole family is protected by insurance, there are businesses that support old age. How beautiful right? To achieve all that, you need to manage finances properly while young. Of course you can without having to sacrifice your lifestyle.
3. Prepare a Pension Fund
Not many people think about retirement funds while they are in their productive age. On average they think that the money earned is only to meet current needs. Though they have to prepare funds or retirement savings. Where you will grow old and no longer be working. You can set aside 10% of your monthly salary for a pension fund deposit.
4. Take advantage of insurance as possible
Don’t be mistaken, some life insurance policies now offer the option of accelerating benefits. Where the benefit or guarantee of death can be paid while the insured is still alive. For example when you buy insurance for your 75-year-old mother, you can submit insurance claims for maternal care costs when sick. Later the insurance company will reduce the death benefit by the amount of money that has been disbursed for medical expenses.
The remaining balance will be paid to you if your mother dies. Life insurance can be used to replace income streams for spouses who are still alive, provide guarantees for heirs, change the value of assets, maximize pensions, college funds for children and grandchildren, and other benefits.
5. Wisely Using a Credit Card
Even though you’re managing finances, you don’t need to close a credit card. You can get around the loan wisely using a credit card. The longer the credit card’s age and the timeliness of paying installments will be recorded on your credit score. Closing a credit card certainly damages your credit score. If you have an old credit card with a decent limit, leave it alone because you can use it for sudden needs.
6. Negotiate Interest when Applying for a Loan
Who says interest on loans cannot be negotiated? It’s easy, just come to the bank to talk about it. You can talk about the interest and loan tenor. The goal is to not disturb your overall financial condition. So, not all income is paid only for installments.
7. Save the Change
Do not underestimate the small change. Keep the returns from stalls, minimarkets, and so forth. Prepare a container to store the change so that it does not splatter. Later this dime will continue to grow and can be used during emergencies, especially in old dates when the wallet starts to tight.
Smart Manage Finances, Life Becomes Calmer
Keeping finance stable does sound easy, but the reality isn’t. Need a strong commitment to run it. Because without commitment, you will easily be tempted by various obstacles that are in plain sight so that it can ruin the financial plan that has been prepared in such a way. Moreover, this is entering the new year. Smart in managing every income and expenditure is the key. The aim is to achieve a better financial future.