financialtreat – will explain about Personal Finance Planning and Business which you will get in the following article. let’s look at this article carefully!
So that we can have a healthy financial situation we must be able to carry out personal financial planning well. But there are still many people who are still not clear on how to carry out this plan properly and correctly. Here we will provide additional ways that you can do to make personal financial planning.
Actually how to do it is very easy if you follow the steps below. Make sure to fill in all the information that fits your current financial situation so that the results can also be better. Don’t fill in the things that you hope you remember will happen to your finances. Without further ado, here are some ways to do personal financial planning.
Financial Planning for Personal and Business
As we mentioned above, on this occasion we will add you several ways to make good and correct personal financial planning. This will certainly be very helpful for all of you who wish to have healthy and well-planned finances.
If you follow all the plans that you have made according to the steps we provide below, then of course you can get a healthy financial atmosphere. Think carefully about what you want to include in this plan. Make sure to fill it out properly and correctly.
1. Create an Expenditure Budget
You have to calculate, how much money you get each month after the tax deductions and other salary deductions. Be sure to only include sources of income you can rely on, such as a regular salary.
If there is another income that is not fixed, you can put it in another income category. You also need to make these calculations before the month starts so that you have enough time to complete this planning.
2. Record All Personal Income and Expenses
If you don’t have a personal financial record, you certainly won’t be able to manage your finances properly. Keeping track of personal income and expenses will give you many additional benefits and be the first step of good financial management.
You can see where your income is used so you can be aware of what expenses you can reduce and increase the amount according to your needs. This will also be very useful for designing financial goals.
If you have plans to buy a laptop in the next 3 months, then you should start saving money from now on. It can also be used to estimate the money for savings that you have to spend every month so that your goals can be achieved within the specified timeframe.
3. Use the 50/30/20 . Formula
You can use the 50/30/20 formula method. This method requires you to divide your net income into three parts. A more detailed example is as follows. You have to set aside 50 percent of your daily income and mandatory bills. For example, shopping for food, toiletries, and even medicine.
Also include mandatory bills such as electricity, water, insurance, and more. Calculate correctly, and whether this corresponds to the amount of 50 Percent of your income. If it’s too much, then you can reduce it by choosing a cheaper item.
Set aside 30 percent of your income for entertainment and other necessities so you can still have fun while managing your finances well. You can prepare your budget in advance to get the entertainment you want. This means that you can still have fun even though you have conducive finances.
Set aside another 20 percent of income for savings and investments. This can be in the form of an emergency fund or an item you want to buy. You can also include it as a retirement fund or investment capital.
4. Pay Installment Debt On Time
Being free from debt will make you more conducive and comfortable with your financial condition, because you will not have other burdens for daily expenses. You will also not get involved in an endless vicious circle. Debt conduits usually arise because you have needs that your daily income cannot meet.
Moreover, you can go into debt to pay off debt, so your debt will not run out first. So that you can be free from debt, you can control the desire to owe. If your debt is in the form of a credit card or other loan, be sure to have an interest-free one. You can also combine debts in one place so you don’t get confused. Make sure to always pay quickly so that it is paid off quickly.
5. Press Consumptive Expenditure
Reduce consumptive expenses that you usually do in daily activities. Because this will make you even more penniless. It is also strictly prohibited by financial planners everywhere. Minimize all the consumptive expenses you have and make sure you only buy the things you need and also at low prices.
- Allocate for Emergency Fund
Make sure to always set aside an emergency fund on each of your income. An emergency fund is very important so that when something unexpected happens, our financial condition is not compromised. The nominal can be in accordance with the financial situation and spending priorities. Ideally if you are not married then you should collect 6 times of all expenses per month.
6. Have Health and Life Insurance
Make an effort to have health and life insurance, as this is a very good investment. But many people still feel like it’s a loss to pay it every month because they can’t get the benefits right away.
Even though you have to be aware that this is a form of the proverb, prepare an umbrella before it rains. We have to always be on guard when it will rain by always carrying an umbrella. With insurance, you don’t have to be afraid to pay for health costs when you have to spend quite a lot of money.
How to Make a Monthly Personal Financial Planning
Some of the ways above are general monthly planning. If you want to make a more detailed personal financial plan, such as per month (that’s better), you can follow the methods below.
This will become more useful as you do it per month. You will also find it easier to plan finances per month compared to last year, of course there will be more things to think about. If you want to understand how to make a monthly personal finance plan, you can see below how to get it.
1. Create a Monthly Budget
Making a monthly budget is a very important activity because you can understand what expenses you have to spend each month. Sometimes a person is difficult to find expenses per month so they are wasteful.
Having monthly expenses allows you to register what your expenses are and then see if they exceed your monthly income or not. Make sure if these expenses are detailed and fixed. Examples can be boarding houses and transportation costs.
Read more financial Lawyer:
- A Guide to Financial Planning Tips for Beginners
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2. Determine Financial Priorities
Once you have determined your monthly budget, you must determine your financial priorities. The trick is to emphasize to buy the items you need and are out of stock. You can refill this item or it is a daily necessity item. Make sure the maximum amount is also so that you don’t waste time shopping.
3. Immediately Pay the Bill
Don’t think you will become rich right away after you receive your salary. The first thing you should do is pay all the bills you have. Such as water bills, telephone, credit, and other bills that are already in your monthly budget. This is very important so that the cost of daily necessities is not disturbed. Make sure to pay on time so that your financial burden can be reduced.
4. Allocate for Savings and Investments
Allocating income to savings and investments will make you rich. Because you will have enough savings for the things you want to achieve in the future and are protected from a bad financial situation. Funds that you can set aside according to other needs. It would be even better if you set aside a large amount so that your expenses can be reduced.
Well, that’s the way to do personal financial planning, hopefully with the above explanation it will be a reflection for you and thank you.