Managing finances is not an easy matter. You may have planned expenses so neatly, but the money spent still exceeds the limit.
If so, then you need to evaluate how you have managed your finances so far. If not managed properly, spending that exceeds the limit can cause long-term harm. Monthly salaries can feel lacking so you have to reach into savings that should be used for the future.
Tips to Manage Finances in Effective Ways
Here are simple ways to manage finances that you can do.
1, Set clear goals
Write down all the things you want to achieve with your savings, then divide them into certain periods. For example, if you want to buy a vehicle, and then calculate how much money you have to spend each month until your savings meet the price of the vehicle. This method will allow you to resist your desire to buy unneeded items that will later be wasted.
2. List your income and also expenses
Record all your sources of income, basic salary, bonuses, reimbursement, and so on. Add up everything until you reach a total value, and then calculate what percentage of the money you need to spend on each type of need.
Divide your expenses into several categories, for example, savings, monthly bills, transportation, food allowance, and unexpected expenses. Allocation of savings must be prioritized, not derived from remaining expenses.
3. Avoid unnecessary expenses
Payment of bills after they are due usually has to be accompanied by a fine. These are the types of expenses you need to avoid. Make a list of bills that need to be paid along with their due dates to avoid this.
Also, pay attention to any expenses that are accompanied by taxes. Health insurance, education savings, and the like can cost other than the basic contribution. So, understand carefully before you register yourself. Always read carefully everything related to expenses and determine whether they are essential or not.
4. Put needs before wants
Compile a list of needs every month, week, or even day. Prioritize these needs over other items that you want. When shopping monthly, buy items that are needed to save expenses. You should not be easily deceived by your lust which makes it difficult for you to distinguish which is a need and which is a desire. Usually, the desire will lead to many regrets ending with the goods being placed in the warehouse and never used again until they are damaged.
5. Cut daily living costs
If you use public transportation, then buy a ticket that can be used for the whole month, likewise with other expenses such as food, groceries, and the like. This will help you cut daily costs that often go unnoticed. You can also take advantage of your bicycle to do some mobility that is not too far away or you can also walk occasionally while nourishing your body.
6. Pay credit fees effectively
Choose a minimum monthly payment when paying off credit. To manage your finances more effectively, use credit from an all-in-one type of bank so that you can make a single payment every month. If necessary, you can consult with the bank before applying for credit.
7. Using online banking
Online banking is very useful for reminding you to pay monthly bills, making billing schedules for the following month, and monitoring your expenses. However, online banking can also make you wasteful if you are not disciplined in using it. The ease of using online banking transactions is a trap that you should be aware of. You shouldn’t be lulled by some cheap offers from online shops that use online payment methods too. Even though it’s cheap, you can go crazy and buy too much and fail to save.
8. Allocating old age funds
Old-age savings are very important, regardless of your current age. You can allocate old-age funds through a bank that provides these services. Usually, customers only need to set aside a few percent of their income for this type of savings.
9. Use a piggy bank
How to manage finances using a piggy bank is never out of date. Use the piggy bank to save small coins that you rarely use. As long as you do it regularly, the savings in your piggy bank will reach a large value after a few months. Saving money that is not widely used can be your savior when you need cash quickly and don’t have time to go to the bank or make online transactions.
10. Invest
Investing is one of the best ways to manage finances. Banks usually provide investment land, even for people who are just working. Choose a stable and promising investment land. Also, consider the risks you face when investing.
Whatever method you use, the most important aspect you need to do is keep track of your income and expenses. Use a simple formula, namely income minus savings to obtain expenditure figures. This will help you control the amount of spending so that your savings are safe.
