Everyone wants to get a big income and not have to worry about the savings they have.
But actually in financial matters, it is not the size of the income that is important, but what really needs to be considered is how to manage personal finances so that they can be enjoyed and have financial stability.
Benefits of Managing Personal Finance
Managing personal finances is very important to do. Even if the income is large, if it is not regulated or managed properly, of course it will not know where it is going and will feel lacking.
The purpose of working people, of course, is to be able to live prosperously in the present and in the future. But if spending is not controlled, debt is everywhere, of course it cannot make life prosperous.
Therefore, it is very important for anyone to know how to manage finances, especially their own finances. This is to avoid complicated economic problems that weigh on your mind every day. Be sure to manage and control expenses and income so that the stakes are not greater than the stakes. How to?
How to Manage Your Own Finances
Maybe for some people managing finances is difficult and requires hard work. But actually how to manage personal finances is not too complicated. The point is on intent as well as accuracy. Let's see the full review below:
1. Create Your Own Financial Records
In managing personal finances the first thing that must be owned is the financial record itself. From this note, the financial management process will be easier and simpler. This note also includes the initial steps to be taken.
The purpose of this record is to organize and monitor the entry and exit of money so that it is not messy and can be organized better. Later with these notes, you can choose which ones need to be reduced and which ones need to be added by adjusting them based on your daily needs.
Keeping these records can also be useful for setting financial goals for a certain period of time. For example, there is a plan for the next 5 years to buy a house, now it can be designed through the financial books that have been made.
2. Create a Monthly Budget
This monthly budget is very important for managing personal finances. Try to allocate 40% of your income for daily needs, 30% to pay off or pay debts if any, 20% for savings or investments, the rest for donations or zakat.
3. Good at Self-Control
This is the main key in managing your own finances. Everyone has different needs and income. Strategies for managing finances will also differ from one another.
Better control yourself before buying anything. Prioritize what is most important and most needed. For needs that can still be postponed, just postpone and put the remaining income into savings. Try to have long-term investments, this is to build financial strength in the future.
4. Provide Emergency Fund
This division of money is sometimes confusing. The main thing is daily expenses, second installments, third savings, then don't forget the emergency fund. This emergency fund is very important because it is used for events or disasters that cannot be predicted when they will come.
5. Have Insurance
This is one good practical way for the future. Health and life insurance benefits can guarantee the future so that the plans that have been designed run as expected. This insurance can cover a lot of expenses needed in the future if something bad happens unexpectedly. For example for medical expenses, education costs, and the like.
6. Pay Off Debts and Installments
If you have debts or installments, it's a good idea if you can pay them off one by one immediately. Having debts and installments is a sign of unhealthy finances, so pay off immediately according to the priority list that must be paid off first.
7. Avoid Debt
Being a consumptive person is indeed very detrimental, especially if you like consumptive debt. Do not be too easy to think of borrowing money just to fulfill wants not needs. It is better to borrow to be able to make money, for example used as small business capital or the like.