Personal Money Management Tips and Their Benefits

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As we entered adulthood, we began to be financially independent because we already had an income. This means that you must be able to manage your personal finances well from now onwards. The size or size of income does not affect financial stability. It all depends on how to manage personal finances properly.

Everyone has their own way of doing things, including personal money management. Tips for managing finances in the following article can be used as a reference for managing personal finances in a smart and effective way. Here is the review:

Personal Money Management Tips and Their Benefits

1. Establish Expense Details

One of the simple things you can do to manage your personal finances well is to record your expenses. The existence of a breakdown of expenses will help you find out the average of your expenses every month, so that it will make it easier for you to make salary allocations so that you are not wasteful.

2. Making a Salary Allocation

After the average amount of expenses each month you have routinely recorded, the next step can be done by making a salary allocation. Salary allocation is very useful for you to use as a reference for managing personal finances every month. You can try the following simple salary allocation:

For example, if your salary is IDR 5 million, then the details of the allocation are as follows.

  • 65Persen (Rp3.250.000,-) necessities, bills, and installments
  • 10Persen (Rp500.000,-) emergency fund
  • Savings and investment 10Persen (500,000 IDR)-)
  • 10Persen (Rp500.000,-) self-reward
  • 10 Persen (500.000 Rp)
  • You can adjust the simple salary allocation according to your income.

3.Pay Off Debts and Installments on Time

If you have dependents in the form of debts or installments, make sure to pay them on time so as not to be exposed to large fines and interest. Fines and interest over late implications can be wasted expenses. Paying installments on time can also keep your credit score good.

4. Avoid accumulating consumer debt

Consumptive debt or installments are debts that are used to buy consumer goods. This means that the items used, such as mobile phones, motorized vehicles, cars, branded bags, and many more, Monthly bills on consumptive goods can increase routine expenses if they are not in accordance with the ability to pay them. Make sure that your salary allocation for installments is no more than 30% of your total salary.

5. Set up an emergency fund

One of the things that should not be missed in managing personal finances every month is to set aside an emergency fund for this fund just in case. We can never predict the future, including unforeseen events of an emergency nature. With a special savings emergency fund, you can use it if you experience urgent conditions in the future.

6. Saving and Investing at the Beginning of the Month

Getting used to setting aside funds to save and invest at the beginning of the month after payday is a special trick so that the two of them do not just become a discourse. Saving at the beginning of the month indicates that the routine has entered into your financial planning for each payday. The norm of saving at the end of the month can make savings money used for unexpected needs or desires.

7. Begin Investing

You certainly have dreams or goals for the future that you want to realize. One of the ways to realize the goal in the future is to prepare it with investment. If you are a beginner, you can try mutual funds and gold investments. Besides not being complicated, the nominal investment is very affordable, starting from only IDR 10 thousand. There are several things that you need to pay attention to before starting to invest in, including:

  • Determine your investment goals in the first place.
  • Determine the amount of targeted funds and the time goals to achieve them.
  • Know your risk profile.
  • Choose a trusted investment application that has been registered and supervised by the Ojk, one of which is Tanamduit.
  • Adjust the product selection to the investment period and your risk profile.
  • Invest regularly every month.

The Benefits of Managing Finances

Day to-day, our needs continue to show an increase. Not only basic needs, but other needs also move up. It requires us to work hard again to earn an income. Not to mention, planning for the future by having a lot of savings and investment for long-term needs.

The existence of money is indeed very important, especially since this money can be a form of motivation for everyone to be able to continue living in a better direction while working and working. Therefore, good financial arrangements are needed in order to fulfill them without significant problems. Here are seven benefits that you can get if you manage your finances well:

1.Train to Live a Frugal Lifestyle

A more frugal life is not a life that fits the right life, let alone all its shortcomings. Frugal living is living with sufficiency and even being able to realize what you want. This is the basic benefit that you will definitely get if you manage your finances well.

Manage your finances every month by prioritizing obligations and needs and also eliminating or eliminating debts that can cause problems in your finances. Saving money can also control your expenses that may often be excessive and maintain them so that you don’t waste them.

2. Practice Being More Orderly and Orderly

In addition to being frugal, if you can manage your finances well, just look at it, your life will be more orderly and orderly in the future. Everything you want, including your own needs and those of your family, is always planned in detail. You can realize that way life will become more balanced not only for basic needs, but also for things that can refresh you, such as going on vacation, religious tours, and other physical needs.

3. Decrease Stress

Stress is a health problem that can harm you. If the stress is too acute, surely you also realize that it is a high risk and can cause disease, even (Amit-Amitnya) causing death. Therefore, start managing your finances well right now.

Avoid things that can cause stress, such as large debts, loans that have not been paid off because interest is getting higher, and also excessive lifestyles and other financial problems. If it does cause this stressful disease, make your mind lighter by saving a lot.

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4. Have Better Future Planning

If you can save money and pursue life more lightly without debt problems, you can be sure that your future planning is also much better. The reason is that when everything is well planned and organized, what you want for the future, it is not impossible that it will happen. This is the benefit that you will feel both now and later.

Thus, this article review that discusses personal money management with the review above is hopefully useful and can be applied by managing personal money as well as possible.

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