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To keep your finances safe and sound through the end of the month, you need to know how to manage your finances wisely. Without proper financial planning, your finances will collapse in the future, and you may even be at risk of not being able to have any valuable savings or assets.

Managing finances is quite simple. You don’t have to worry about the calculations because you can use a simple formula that’s easier to understand.

There are now several personal finance records applications that can help you manage your finances. You can also use Excel format to create personal financial reports. With the right personal finance management, you can spend your salary wisely, from daily necessities, entertainment, and donations to parents to investments.

Even though your salary may be small now, you still have the opportunity to own valuable assets. Below is an overview of personal finance management for beginners that you can follow. This article also discusses some examples of managing your payroll. listen carefully, yeah


Here are 10 tips for managing finances wisely


1. Record all income and expenses

The first thing you can do is diligently log your income and expenses every day. This is done to find out how much you need in a month. Record all expenses, even if it is only a small part, to make it easier for you to analyze your monthly expenses.

This way you can also save on unnecessary expenses, e.g. B. Buying coffee from an expensive place or buying unneeded “printed” items. Make a habit of logging in every month so you get used to spending money only on things that matter. Although occasionally you can reward yourself by purchasing the item you want.


2. Set financial goals

The next way to manage finances is to set your financial goals for the future. For example, you are planning to buy a house or a dream car in the next 5-10 years.

Clear financial goals, motivates you not to overspend. Your financial situation will become healthier and more organized. You will also learn to be frugal and to save so that your financial goals can be achieved as you wish.


3. Create a realistic budget

Next, start creating a realistic monthly budget that reflects your condition. Saving 50 percent of your total salary to accumulate your savings quickly is not recommended as you will make it difficult for yourself and not enjoy life. We encourage you to create a realistic budget based on your conditions.

You can manage your finances using the 50:30:20 method, which is 50 percent for everyday needs, 30 percent for extra needs, and 20 percent for saving and investing.


4. Take advantage of the personal expense log app

If you find it difficult to write expenses manually, you can use personal finance applications on Android and iOS smartphones. Some financial record-keeping applications also come with full features such as personal finance reports by category of each expense and income, making it easier for you to know where your expense items have been.

With a personal finance tracking application, you can also classify categories for each of your expenses, such as transportation, meals, or investments. This makes it easier to sort.

5. Avoid debt

As a millennial, you might want to always look trendy with the latest branded clothes or cell phone models. However, do not let this desire mess up your financial management until you apply for a loan.

To realize your wishes, you should be patient and only save according to the financial plan that has been drawn up.

It’s okay to be in debt, but it’s best to buy assets that continue to increase in value every year, like land or houses. If you get into debt, you must also calculate the ratio. Make sure that the installment is no more than 30 percent of your income. Because if it’s more than 30 percent, your finances can get messed up.


6. Start investing

Investing is a surefire way to manage personal finances so your wealth keeps growing. Depending on the risk profile, you can choose between different forms of investment, e.g. B. Money market funds or fixed-income mutual funds with a potential return of 4-6 percent per year.


7. Distinguish between needs and wants

The next way to manage finances is to distinguish between needs and wants. Often people always buy what he wants under the guise of self-gratification. However, if left unchecked, this self-gratification semblance will naturally add to your spending and ultimately other important needs will not be met.


8. Create an emergency fund

As you manage your finances, don’t forget to set up an emergency fund. It’s important to have an emergency fund if you ever need a large amount of money. You still feel safe because you don’t have to use your savings.

A person’s emergency fund can vary by status and occupation. If you’re single, you can collect an emergency fund of 3 to 6 times your monthly expenses.

If you’re married and have dependents, your emergency fund should be 6 to 12 times your monthly expenses. Funds that need to be set aside for an emergency fund are 5 percent of your income.


9. Do you have another account

To avoid over-consumption, you should have another account. A special account for personal needs for a month, another special account for savings.

This also makes you more cautious about spending money because if the money runs out, you cannot transfer your savings to another account.


10. Do you have insurance

If all finances are well planned or managed but there is no insurance, your finances can collapse too. Because in life you will find different types of risks that you never know when will occur, such as getting sick, damaging cars, fire stations, and even death.

If there is no financial protection such as insurance, the savings and assets accumulated so far can be sold off. If you consider the hospital costs, workshops, and damage from house fires are not small.

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