7 Ways to Manage Your Personal Finances Smartly and Accurately

Content list

1. Save
2. Create Expenditure Details
3. Start investing
4. Pay off debts and installments on time
5. Prepare an emergency fund
6. Use your credit card wisely
7. Prepare a retirement fund

Entering adulthood is the right time to manage finances wisely. As we get older, it also requires us to be smarter in choosing what we need or just want. The greater the income earned does not determine whether a person is financially stable. If a person does not manage their finances well, they are forever trapped in the wrong way of life. Everyone's financial management method must be different according to the conditions and abilities faced. At the very least, in this article, you will learn how to prepare for a safe and desirable future.

Here are 7 ways to manage finances properly in the style of boelroom Finance, to prepare for a bright and happy future:

1. Save

The saying "Those who are diligent in the wise, there are those who are rich" is true. This proverb teaches us to be able to apply a culture of frugality. We cannot predict what will happen to us. So it is wise to be able to put what percentage of the income we receive into savings.

If you need guidance on how to save properly, try the "Kakeibo" (Japanese art of saving) method or allocate 20% of your monthly income to a savings account.

2. Create Expenditure Details

Publish expense information every month to easily track how your funds are being spent. For example, paying for daily meals, buying basic needs, paying debts or installments (if any), entertainment needs, etc. You can use existing financial management applications or record them manually in a notebook.

3. Start investing

It is the right decision to take steps to invest in preparing for a better future. Depending on the type of risk level that arises, you can use a number of investment vehicles, including stocks, bonds, gold, mutual funds, and others. First, choose a less risky investment vehicle.

The investment returns from the initial planting will definitely be very profitable with age.

How to Manage Finance

4. Pay off debts and installments on time

For those who have debts or monthly installments, such as mortgage and credit card installments, pay off on time. This is done to avoid charging us too much interest and to keep our credit score in good shape. If you have credit card installments, try to always pay in full, not the minimum payment amount. This is done to prevent us from overspending.

5. Prepare an emergency fund

An emergency fund is money set up for unforeseen and emergency situations, such as an accident, illness or condition, when there is no source of income. The amount of an emergency fund is definitely different for each person, but generally 10 times the income we receive each month. Keep your emergency fund account separate from your needs account and don't use emergency funds.

6. Use your credit card wisely

Credit cards make it easier for us to pay monthly installments. However, the use of credit cards must also be controlled in portion and not used for excessive spending purposes. As for tips on using your credit card wisely, try paying in full each month in installments. Also, don't lend your credit card to your relatives. Because if it changes hands from its original ownership, it is difficult to control where the credit card is spent.

7. Prepare a retirement fund

Finally, you may be able to plan for your needs in retirement. Retirement is a time when we no longer need to look for other sources of income, but enjoy our old age. When retirement comes, you must also be able to adjust your lifestyle to your conditions and abilities. If you plan to retire at 55, you have about 25 to 30 years to prepare your retirement fund.

This is the right and proper way of managing finances that boelroom friends can run. True, the process is not easy, but enjoy the process and keep in mind the end goal you want to achieve. Always eager to prepare for a better future!

read more:  How to plan your finances