What do you do when you get your first paycheck? Buy something you’ve been eyeing? Give some to your parents? Or spend it all right away? Do you know how to manage your personal finances so that the money you have can last until the end of the month?
How to manage finances is one solution so that the money you have can last until the end of the month. Usually, young people who hold a lot of money definitely want to spend it immediately.
Hey, it shouldn’t be like that. By knowing how to manage your finances, you can also keep your financial condition stable, you know. Come on, let’s just take a look at the explanation of strategies for managing personal finances with a small or tight salary so that you can survive until the end of the month.
How to Manage Personal Finances on a Small or Just Enough Salary
It is undeniable that life in a big city, especially in the capital city, does cost a lot of money. Starting from food, transportation costs to work, buying credit, and so on.
Well, if you don’t know how to manage your personal finances properly, this will affect your cash flow. Of course you don’t want your salary to run out just like that, right?
Therefore, learn some of the following ways to manage your finances.
1. Differentiate between needs and wants
The first way to manage personal finances is to distinguish between needs and wants. The needs referred to here are daily living needs, yes. Such as eating and drinking, to the cost of going to work.
While desires are shopping for lifestyle. For example, buying clothes, hanging out at cafes, buying expensive coffee, to hobby needs. Why do we need to distinguish needs and desires if we want good personal financial management?
This is intended so that you can know which is an obligation and which is to satisfy yourself. So when you manage your personal finances, you can see where the most money is spent. Is it for needs or wants?
2. Make a Financial Plan
The next way to manage finances is to make a financial plan. How to make a financial plan? Actually, the method is quite easy to do, you know.
You can start by compiling a list of your monthly expenses and monthly income. The goal is to make it easy to monitor your income and expenses.
This financial plan is also needed as a reference for calculating the finances you have. So that later you can still choose which ones are really needed, and which ones are not.
With such a personal financial management model, you can see what is needed and what is not, right
3. Apply the 50 20 30 Rule Method
The 50 20 30 rule can also be used as an easy way to manage personal finances. This method is an alternative method that aims to divide your finances according to the percentage of 50 20 30, as follows:
50% for personal needs
20% for savings
30% for wishes
This way of managing personal finances is claimed to be able to make you manage money ideally for these three needs. This way, you can get it all, right?
4. Be wise in using credit cards and Paylater
Being wise in using credit cards and paylater is a smart way to manage personal finances that you need to pay attention to. Especially if you have a lot of desires that must be purchased on e-commerce .
It is undeniable that credit cards and paylater features really help us get the goods we want. But if you can’t use them wisely, a big bill is ready to come to you at the end of the month.
Therefore, don’t forget to be careful when using these two financial features! If it’s not really an emergency, it would be better if you avoid it.
5. Always Prepare Emergency Funds
Tips for managing personal finances with a small salary
Preparing an emergency fund is very important. We never know when we will need emergency funds. So there is nothing wrong with setting aside a little of your income for this fund.
The amount is up to you. It doesn’t have to be the same every time you set aside, but try to be consistent in doing it every day. The thing you need to pay attention to is that this emergency fund will be enough if you need it at any time.
6. Learn to Invest
Investment is also one way to manage personal finances wisely. The investment you make does not need to be expensive. Investing in mutual funds alone is enough to become your savings later.
The thing you have to pay attention to is choosing a type of investment that already has certification and has obtained a permit, okay. Don’t let you follow a fake investment. Instead of profit, it’s fake.
7. Avoid Debt
Another very important thing is to avoid debt. Did you know that debt is one of the biggest obstacles in managing finances?
If there is no urgent need, it is better not to go into debt. Rather than applying for a loan to someone else, it would be better if you refrain from buying less needed items.
Well, those are some ways to manage personal finances intelligently that you can use. Keep in mind, arrange your financial plan as well as possible by adjusting your priority needs. Be wise in spending money for future provisions.
Even though you are still young, it does not mean that you can freely spend money, yes! Because we never know when the money will run out, and when we need a lot of money.
