Business and Finance

Posts Tagged ‘financial management’

Every person has a way of managing finances. Principle, the regular monthly income as much as possible to meet all your needs and leave money for savings. Then, have your income aside for savings each month?

Actually, that needs to change first is the mindset to be able to manage your finances well. If you have previously focused on how to leave money, then change the mindset in a good way to spend money from the monthly income. Do not leave money, but spend a fun way. Because the money is to spend and pay-for spent

Do not spend money this payday interpreted consumptive behavior that tends to promote the desire (appetite) rather than necessity. How to manage finances is conducted by four stages of priority:

1. Liabilities religious / social, 10 percent of income
In determining priorities, you need to determine spending by looking at risk factors (high, medium, low) and flexibility. Flexible Spending long-term nature that can still be negotiable, while his opponent, namely the need is not flexible or fixed (fix), are short term.

Religious or social obligations, such as zakat (Muslim), tithe (Nazarenes), is in first priority. These expenditures are fixed, 2.5 percent for charity, for example, is not negotiable. So, take out the Zakat funds, accepting a pay-per-month.

2. Installment debt, a maximum of 35 per cent of the income
These expenditures are too high and risky fix. Therefore, you must fulfill this obligation at the beginning of each month receive a payday. Installments as mortgage, car, credit cards, and others need to be paid based on your spending.

Higher interest if these obligations are not met immediately. In addition to psychological factors, for a normal person you will experience a psychological disorder if the wound a lot of debt. Not to mention the legal consequences if the loan at the bank loss.

3. Future needs, at least 10 percent of income
Saving, investing, and buying insurance is a form of future needs that must be allocated from the monthly income. This requirement is important because financial conditions are always dynamic. Especially for employees, where security allows salaries to increase, decrease, or even lose their jobs do not earn an alias (eg layoffs). The nature of this expenditure and high-risk fix.

4. Cost of living, 40-60 percent of income
If the three above obligations have been fulfilled as soon as you receive a monthly salary, use the rest to meet all the needs of the monthly routine, such as food, electricity / water, kids tuition, contributions to environmental / safety, including those related to hobbies such as buying books, watching movies, or other entertainment expenses (that nature desires).

With live, you will not run out of money at the beginning of receiving a paycheck. If you were tempted to buy discount items at the mall, you’ve noticed the rest of your money (after being expelled for the top three priorities) would not be enough anymore to go shopping. Because the main problem experienced by many people with money income is used up so quickly receive a salary.

Priority spending money is to pay a debt, then saving than shopping who wishes can never be limited.

No amount of your income, money left each month if it would still use the old pattern. So, spend your regular income to spend in accordance with four main priorities. Be sure to meet the consumptive nature of taste in the final sequence.

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