How to manage healthy finances is one solution to keep your financial condition stable until the end of the month. Where in the end the following financial management will create a balance between your wants and needs. Interesting right? Well, no need to linger, let’s look at the tips for managing finances below.
How to Manage Personal Finance
Every day, we are always faced with spending needs. Starting from electricity bills, PDAM, to online shopping entertainment at your favorite e-commerce. The funds we allocate for each of these things can be better regulated by understanding how to manage personal finances. Read more about the following general financial management tips.
Differentiate Needs and Wants
Before actually compiling a monthly financial plan that is right for yourself, first understand which things you need or want.
– Basic needs are all goods or services that are primary to be fulfilled. Some examples are consumption and education.
– A wish is a product or service that is additional in nature and is only fulfilled for personal enjoyment. An example is shopping for lifestyle and hobbies.
By distinguishing the two, managing finances will be easier to do because you know which one is a form of obligation and just to satisfy yourself.
Make a financial plan
The second step you can take as a way to manage personal finances is to create a financial plan. A financial plan can be made by compiling expenses and income per month so that it is easier to monitor.
Even if you only have a small amount of money in your savings, you need to have a financial plan in place. The impact will also be better if you can apply this step early.
Use credit cards wisely
Shopping by using a credit card unwisely can make you more consumptive and the consequences of long-term debt. Therefore, reconsider using a credit card in your various needs.
Another way to manage personal finances that you can apply is to invest. Not only stocks and property, there are currently many other financial technology innovations such as mutual funds that you can choose to invest in.
Prepare an emergency fund
Setting aside a little money from your income is also important, so you can take this step as a way to manage personal finances. There is no requirement how much nominal must be set aside each time. Just make sure this emergency fund can be used when there is an urgent need.
50 20 30 rules
You can also apply an alternative way of managing other monthly finances using the 50 20 30 rule. This scheme was coined by Elizabeth Warren, an economics academic at Harvard University.
Broadly speaking, the concept of the 50 20 30 rule teaches you to divide financial ratios according to the percentage in these provisions.
50% – Primary needs (Needs)
20% – Savings (Savings)
30% – Wishes (Wants)
This concept teaches you to be able to manage money ideally for your main needs, desires for hobbies and saving for the future.
Pay later and Cashback
The next trick that you can use as a way to manage monthly finances is the pay later and cashback features. Currently, almost all e-wallet and e-commerce platforms offer “buy now pay later” and cashback facilities.
Try to maximize the use of these two features wisely as one of the tips for managing finances so that you are not burdened by your expenses.
How to Manage Household Finance
A large number of household needs also need to be managed so that it is more optimal and not wasteful. The following ways to manage household finances can be applied with your family.
Monthly shopping plan
Just like meeting personal needs, in a household monthly needs also need to be carefully planned. In preparation, prioritize basic needs first. For example, in the following example of a list of monthly expenses.
Electricity and water bills
Other household appliances
Installments and dues
Additional needs (Wi-Fi, recreation and more)
Cook and eat at home
Cooking and eating at home is very effective in reducing family expenses. Just imagine, once you and your family eat at a restaurant, you can spend around 50 thousand per person. Meanwhile, this amount can be used to meet the food needs of a family at home.
Saving and Investing
One way to keep household finances stable is to save and invest. If you have a steady income per month, it never hurts to set aside a little for savings.
In addition to saving, you and your partner can also try investing. This step can also be the right way to prepare for old age later.
Applying for insurance is the next way to manage household finances that must be done, especially if you are married and have children. With insurance, some of the risks that occur will not be so burdensome for expenses and families.
Looking for a side job can be an easy way to manage household finances. There are many alternatives that you can try, such as doing a home business or an online business with your partner.
How to Manage Business Finance
A business certainly cannot be separated from its funding and management. For this reason, it is certainly important for business people to know how to manage business finances that are right for their industry.
Draft budget and company financial reports
The first way to manage business finances is to make a budget plan. A budget plan can be made by projecting clearly the sources of income and expenses of the company.
In addition, the company’s financial statements can also be one way to manage business finances. All evidence related to income and expenses can be entered into the books of financial statements.
So that by making these two things, it is likely that the company’s expenses will not swell.
Company loan or debt
It is possible for a business to make loans or debts. This can be disastrous if not managed and monitored properly. As a way of managing business finances to stay on track, try to do regular checks whether the company’s loans and debts have been paid off or not.
All things cannot be separated from a risk, therefore an emergency fund is also important for a company to have. The existence of this one budget allows you to run a business even if you have experienced difficult situations.
Emergency funds can be obtained from the provision of funds obtained from the company’s source of income.
The Importance of Managing Finances
What are the benefits that you can take if you successfully apply how to manage personal finances well? Of course there are many, see the answers in the following list.
Safe cash flow. Monitor your finances in real time, so no income and expenses are missed.
Identify financial errors. Know the problems that occur when managing finances as material for future evaluations.
Quiet retirement. How to manage personal finances can help you prepare for old age.
One thing that really needs to be considered when trying to manage household, personal or business finances is consistency. By applying it consistently in your daily life, this method will be very useful for life in the future. May be useful! You can learn about consolidation in full just here.