A “bigger stake in the stake” problem, or greater servicing, may have occurred to your financial condition. This is clearly a problem that must be resolved immediately in order to stabilize the financial condition. A practical step to solve this problem is to do money management. Here are 5 money management tips that you can apply.
Make financial priorities
Everyone has a type of expense that must be prioritized. In that sense, these priority expenditures must be paid off as quickly as possible and cannot be delayed. The most common examples of priority expenditures are credit card bills, electricity and water contributions, house rental fees, home mortgage dependents, car loans, children’s school fees, and so on. Before you look at the entirety of your financial statements, you should start making a list of financial priorities. Apart from the various bills that have been previously mentioned, this financial priority can also include the financial goals you have. For example, suppose you have a goal to buy a house 5 years from now. Means, you can add the post “home savings” into the list of financial priorities.
Know your monthly expenses
After knowing your financial priorities, the next money management tip is to evaluate your spending routine for a month. Everyone’s expenses usually have a similar pattern every month. This will make it easier for you to analyze your financial condition in the past month. First of all, you need to list all expenses for this month or last month. Keeping each payment receipt will be very helpful in this process. Then, create several expense categories and sort each expense into one category. From there, you can see which expenses can actually be reduced or even completely eliminated.
By looking at these expense categories, you can also form a budget range for your various types of expenses in the following month. For example, you see that your expenditure in the entertainment category is up to IDR 2.5 million, which means you can make a budget of IDR 1.5 million to IDR 2 million for the following month.
Prepare money for emergencies
No one can know when disaster will come. An emergency can come from anywhere at any time. Starting from family members who fall sick, accidents occur, leaky houses, damaged cars, to the current pandemic phenomenon. Therefore, as a money management step, you need to prepare savings for emergencies. Usually referred to as an emergency fund. This emergency fund should cover a total of 3 months of your salary.
In addition to helping you financially when there is a sudden need, this emergency fund will also calm your mind on a daily basis. There is no need to be afraid of a shortage of money at times when something happens.
Saving and investing from young
The habit of saving has been taught since childhood. However, not many people succeed in adopting a routine saving habit, let alone investing. This savings can be used for anything. Maybe you have a desire for a vacation, you can use these savings. Savings can also be converted into pension funds. Whatever your needs are, you should have more than one savings. The sooner you start saving, the less money you have to save per month. You can start by setting aside 10% of your salary for savings, while the other 10% is for investment as a money management effort.
In choosing an investment product, make sure you have learned the basics first. Don’t invest in just one investment product, but plant it in various investment fields. Remember that the greater the chance of a return on investment, the greater the risk.
Start a side business when needed
What happens if your monthly salary is just barely enough to cover your daily needs? Of course, it will be very difficult to apply the money management tips above. However, you can outsmart it by increasing income rather than reducing expenses. The trick is to start a side business.
You also need to be careful when choosing the line of business you want to build. Choose an industry that has the potential for market demand that remains high in all situations, even in the COVID-19 pandemic like today, one of which is the agricultural products sector. You don’t need to buy land to become rice fields, just partner with a distributor of agricultural products. Agricultural products from distributors believe are of high quality, so you can sell them back to the general market, manufacturers, food and beverages corporations, restaurants, and so on. Choose a trusted distributor like Mekar Jaya Indah, which offers a variety of local and export agricultural products, from green beans from Burma and Africa, coffee beans, to candlenuts.