Financial planning
Financial planning

Financial Planning Tips For Beginner

Now we will give you several ways to make good and correct your financial planning. Its can be good for your life.

1. Create an Expenditure Budget

You have to calculate how much money you get each month after tax deductions and other salary deductions. Be sure to only include sources of income that you can rely on, such as a regular salary. If there is other income that is not fixed, you can include it in another income category. You also need to make these calculations before the month starts so you have enough time to complete this financial planning.

2. Record All Personal Income and Expenses

If you don’t have a personal financial record, you definitely won’t be able to manage your finances properly. Recording personal income and expenses will provide many benefits for yourself and be the first step of good financial planning.

You can see where your income is used so you can find out what expenses you can reduce and or increase the amount according to your needs. It will also be very useful for designing financial goals. If you have plans to buy a laptop in the next 3 months, then you should start saving money from now on. It can also be used to estimate the money for savings that you have to spend every month so that your goals can be achieved within a predetermined time span.

3. Use the 50/30/20 . Formula

You can use the 50/30/20 formula method created by Elizabeth Warren. This method requires you to divide your net income into three parts. A more detailed example is as follows.

You have to set aside 50% of your daily income as well as mandatory bills. Examples include shopping for food, toiletries, and even medicine. Also include mandatory bills such as electricity, water, insurance, and more. Calculate correctly, and whether this corresponds to the amount of 50% of your income. If it’s too much, then you can reduce it by choosing a cheaper item.

Set aside 30% of your income for entertainment and other necessities so you can still have fun while managing your financial planning well. You can prepare your budget in advance to get the entertainment you want. This means that you can still have fun even though you have secure finances.
Set aside another 20% of income for savings and investments. This can be in the form of an emergency fund or an item you want to buy. You can also include it as a retirement fund or investment capital.

4. Pay Debt & Installment On Time

Being free from debt will make you more secure and comfortable with your financial planning situation, because you will have no other burden except daily expenses. You will also not be involved in an endless vicious circle. Debt behavior usually arises because you have needs that your daily income cannot meet.

You can even go into debt to pay off debt, which will make your debt never run out. In order to be free from debt, you can control the desire to owe. If your debt is in the form of a credit card or other loan, be sure to have an interest-free one. You can also combine debts in one place so you don’t get confusing about that. Make sure to always pay quickly so that it is paid off quickly.

5. Press Consumptive Expenditure

Reduce consumptive expenses that you usually do in daily activities. Because this will make you even more penniless. Bad financial planning also strictly prohibited by planners everywhere. Press all the consumptive expenses you have and make sure you only buy the things you need and at a low price.

6. Allocate for Emergency Fund

Make sure to always set aside an emergency fund for each of your income. An emergency fund is very important so that when something happens, our financial situation is okay. The nominal can be adjusted according to financial conditions and spending priorities. Ideally if you are single then you must collect 6 times the total expenditure per month. You have to remember that emergency funds and savings are different in financial planning.

7. Have Health and Life Insurance

Make an effort to have health and life insurance, as this is a very good financial planning investment. However, many people still feel that it is a loss to pay it every month because they cannot get the benefits right away. Even though you have to know that this is a form of the proverb, prepare an umbrella before it rains. We must always be on guard when it will rain by always carrying an umbrella. With insurance, you don’t have to be afraid to pay for health costs when you have to spend quite a lot of money.

Read More : Planning For The Future Now

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