Making money is hard, but spending money is even harder. Knowing how to manage personal finances and spending properly will help you become more self-reliant, opening up more opportunities for growth. However, how to manage finances is currently one of the quite difficult problems that many people face.
The right way to manage personal finances helps you be more proactive
1. Effective personal financial management
Effective personal finance management is not a simple job, can not be done in a day or two but successfully. However, you can start with the smallest, simplest steps. It’s getting into the habit of recording the expenses you use every day. The goal of this is so that at the end of the day you can summarize and reallocate your spending more appropriately.
The first step to learning financial management can be quite difficult, because you are living a fairly free lifestyle, spending without thinking much. That is why you need to do financial management every day, because gradually it will form a good and useful habit for you.
Besides, reviewing and calculating your spending every day will make it easier for you to balance and manage your spending to match the plans you’ve set up. With that, personal financial management is effective and long-lasting.
2. How to manage personal finances with 6 jars
How to manage personal finances with the best 6 jars
One of the famous books on getting rich ” Secrets of the Millionaire Mind” and “Get Rich Fast” by Mr. T. Harv Eker has shown a very effective way to manage your own finances that is to apply it. recipe 6 jars. In it, depending on your income and financial allocation to 6 jars with the ratio and purpose as follows
- Jar 1: Financial Freedom Fund – 10% of income:
Freedom fund or in other words is a reserve fund for the future for your own plans. You can use this fund to retire early or satisfy your passions thanks to this fund.
- Bottle 2: Long-term Consumption Fund – 10% of income.
A fund to help you in arising situations such as health, illness… Having this fund will help you be more proactive in unexpected situations.
- Jar 3: Education Fund – 10% of income.
Improving your knowledge will help you improve your knowledge, develop your capabilities, and create more relationships and opportunities for growth. This fund you can use to learn a communication course in another language or courses on financial business.
- Jar 4: Benefit Fund – 10% of income.
The ultimate goal of making money or managing finances is to make life more happy and joyful. Therefore, you should not be too strict about saving that you forget the entertainment and enjoyment needs for yourself. This is the reward for the effort as well as the motivation to try harder in the future.
- Jar 5: Share/Give Fund – 5% of income.
Giving is also a way for you to have greater happiness. There are many more difficult and needy people out there than you, and surely helping them will make you feel happier and more heartwarming. In addition, this fund is also used to help you and your family and friends in difficult times.
- Jar 6: Essential Consumption Fund – 55% of income.
This is the main source of funds for you to spend on daily life or other essential needs such as eating, living, spending on clothes, clothes, etc. Depending on your income, the % for this fund. can be adjusted to ensure that your daily necessities are most complete.
3. Manage personal finances in the Japanese style
3.1. Using the Kakeibo . notebook
How to manage personal finances with a scientific Kakeibo book
Kakeibo book is a smart personal financial management methodapplied by the Japanese for a long time. In fact, this is just an ordinary notebook used to record ordinary personal income and expenditure, but it has a special effect in financial management and savings.
Rules for using Kakeibo notebooks include answering 4 questions:
- How much money do you have?
- How much do you want to save?
- How much did you spend?
- How can you improve?
The advantage of using the Kakeibo book is that you can clearly understand the expenses, from which you can adjust and use the money in a more reasonable and accurate way. Besides, using the Kakeibo notebook will also give you a good habit of being meticulous and careful because there is a need for accuracy in recording so that the statistics of expenditures are faster and easier.
3.2. Learn how to delay enjoyment
Stylish new clothes, glamorous lipsticks can make any girl fall in love and forget about managing expenses.
However, using a lot of money will help you be motivated to make more. But your inability to postpone temporary temptations will prevent you from achieving your best goals and form a bad habit that is hard to break.
4. Manage personal finances with excel
How to manage personal finances with smart excel
Using the excel tool is also an effective personal financial management method that you should apply.
- The advantage of this method is that you can use modern computer aid tools, the calculation will be easier and more accurate than using manual methods such as manuals. The storage is also guaranteed and easier and you never have to worry about the reason of loss or damage like the notebook.
- However, using excel is quite disadvantageous because you always need a technology device such as a smartphone or laptop to fill in the information. So in some cases you forget to bring your phone or laptop, taking notes will be delayed. Thus, the recalculation of expenditures may be flawed, not completing the original plan.
The information in the form usually includes: date, month, year, total income, spending information (food, utensils, gas, room, etc.). incurred expenses, balance…
5. Other spending-cutting tools
One of the other effective ways to manage personal finances is to use tools to help cut spending:
- Buy from Groupon websites to save money. The groupon model or easier to understand is the group purchase model to be charged at wholesale prices, even you only need to spend an amount equal to 50% to 70% of the original price when buying goods according to this model.
- Websites that hunt for sale, promotion or auction prices.
- Promotions, discounts of supermarkets or stores that you want to buy.
6. Use a Personal Financial Management App
Currently, there are many financial management companies established and with that, financial management applications are born. Personal financial management applications are smart tools that users can download on mobile versions to support more reasonable spending.
These tools will help you record personal expenses, analyze your financial situation, balance fluctuations, some can even remind you of overdue spending. Thereby helping you to spend rationally and achieve your financial goals effectively.
Some of today’s effective financial management tools that you can refer to are PocketGuard, HomeBudget, Fast Budget, My Expenses, Level Money, Spendee etc.
In general, financial management is something that every individual should do from now on. With the above effective ways to manage personal finances , hopefully, it will help you manage your spending more reasonably.
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