1. Know your current financial situation.
Before you can make savings plans for any activity, be it your children’s education, retirement or buying your dream home, you need to know where you are financially today. You may have to bother to get a financial planner if you do not know how to create a financial plan. If you know how to create a financial plan, then you can save a decent amount of money when hiring a financial planner.
2. Save regularly.
Acquiring the habit of saving is a good virtue. You will never know when you are in dire need of this extra money when unforeseen events such as a job cut or a loved one falls ill, which requires a lot of medical care, leading to high medical costs. As a guide, you need to set aside 3-6 months of your current salary to meet your urgent needs.
3. Control your cash flow.
No matter how rich you are, you need to be able to control your cash flow. The simple rule is that what goes in your pocket should be more than what goes out of your pocket. You need to know which element brings you income and what makes you spend.
4. Reduce your costs
Start by keeping track of your daily, weekly and monthly expenses. Find those costs that are not necessary and eliminate them. A good example of this is paying for subscriptions to magazines you don’t read. When you have identified all these items that are not worth your dollar, you can significantly reduce your costs by 25-30%. It is recommended that you have only one credit card so that you can better track your expenses. Make sure you pay the full amount by the due date of each credit card invoice before it goes into incredible debt.
5. Review your debts
As a rule, your debt should not exceed 30-35% of your total income. Gambling and vices are good candidates that can lead to debts. Poor money management can also lead to debts, you could even win 2 million lotteries or inherit a large fortune from a relative.
6. Be frugal, but not stingy
Buy goods only when it gives you good value for your money. It makes sense if you know when to buy something quality and pay a premium against when to buy something less branded, but still serve the same purpose as a branded item. If you have always chosen items based on cheap prices, this item may fail in a short time, which will make you buy another, this will lead to higher costs than you originally expected. You will also be labeled as someone who is stingy, unwilling to spend money when absolutely necessary.
7. Review your investment portfolio
If you have invested in stocks, mutual funds (unit trusts) or various funds, you would like to review them regularly. Your review period can be quarterly, six-month, or annual. For example, when you have done your quarterly analysis and found that the company’s investments you have invested do not yield your target return based on financial data or external intervention, then you would like to replace this stock with better-performing shares of the company. .
8. Educate yourself financially
There is a wealth of financial information and it is free when you surf the internet or go to your local library. You can attend seminars, read books, read newspapers and listen to audio tapes, which are some of the ways you can gain more knowledge.
9. Be generous
There is a saying, “You get what you give.” When you are generous, some of the spiritual forces know this and give you back many times. When you give, there is a natural tendency for the other person who receives to want to give you back.
10. Pay yourself first
Before you pay all your monthly expenses, you need to develop the habit of paying yourself first. If you have a day job when it comes to paying by the day, you can start putting, say, 5% of your salary into another bank account. You can gradually increase this percentage when you have more money for home or feel that you deserve more reward. Many people pay last. Until they pay other expenses, they will no longer have anything to pay.