How To Manage Your Spending

Good afternoon! I'm starting my day with a flu this morning. Very uncomfortable. :(
I thought of writing this topic because I've came across an article in a local newspaper last Wednesday discussing about how to manage money well. I myself is somehow "love" shopping so much which ends me up with no real savings at the end of the month. This is bad news! I need to do something PRONTO!

We know how hard it is to find money but why do we spends it so easily? I guess two most important thing here is SELF-CONTROL and PROPER PLANNING.

Evaluate financial state
The level of income for each person varies. Your cash-in-hand & savings is what we call ASSETS. Total up all your assets and your expenses. If your expenses is more than your assets, this is what we call unhealthy state of finances. You need to have more savings & reduce expenditures!

Assess financial needs & wants
Do you really NEED it or you just WANT it? WANT means something you wanted to buy just because its pretty, to show off, following trends etc. So if it's a WANT, put the idea off.

BUT if you need it, set a time frames. If you need it within the year, set your savings for each months. Example: If you want to buy a RM1000 handphone in five months, then the savings needed is RM200 a month.

Prepare budget
After receiving an income, you should set some for savings, not spend first and use whatever that remains for savings. It will never works that way. The ideal total savings is between 10-15% of your monthly income. When there is extra income like bonus, save it.

Implement
You should monitor your daily expenses well. One way is the envelope method. Put an amount of money for a particular expenditure in an envelope. At the end of the month, after all the 10 - 15% saving from income and subtracting the expenses, save the balance to the saving.


Start saving at a young age. If possible, start saving when you start working. But do not spend unnecessarily. We must spend according to our ability.

REMEMBER!
When you wanted to buy something, you should ask yourself two questions:

1. Do I need that thing?
2. Can I afford this?

If both answer is NO, then forget about buying that thing.

Just a thought and sharing. Tell me if it helps =)