The Right Way for Young People to Manage Finances
Young people certainly need to know how to manage their finances properly. Everyone naturally wants to live a safe old age. You also have the same desire, right? However, in order to achieve this, we have to put forth effort since we were young. When your body is still fit, then is the right time to work hard. This needs to be accompanied by good financial management knowledge. Here are some tips for those of you who want to manage finances more precisely.
Distinguish Funds For Emergency Needs And Funds For Retirement
In order for a ‘peaceful’ old age, don’t forget to prepare a retirement fund from now on. You have to remember, physical condition as you get older can make your productivity decrease too. At some point, you can no longer be active again. You can use this retirement fund so you can meet your needs at that retirement. So, therefore you must be able to manage finances so that you can set aside a portion of your salary for retirement funds. However, also distinguish retirement funds from types of emergency funds. The function of the emergency fund is no less important. As the name implies, an emergency fund is a fund that can be used for emergency conditions. For example, you suddenly need a new laptop because the old laptop is damaged. Also, when your motorbike needs to enter the garage workshop. For single ones, it is recommended that you prepare 3x the amount of monthly expenses. Meanwhile, for those who have a family, this emergency fund is prepared for 6 to 12 times the amount of monthly expenses. So that if there are certain conditions that require you to spend money suddenly, your finances will not be shaken.
Set A Budget According To Time
There is another key to managing finances better, which is not spending too much money. This is where determining the budget will help you limit your expenses. People of course have different budget spending arrangements. You can determine this budget on a daily, weekly, and monthly basis. It’s usually easier to “break down” the budget. For example, that is, in a month you receive a salary of IDR 5 million. A total of Rp 2 million is set aside for savings. For the remaining IDR 3 million, you can determine your daily needs budget. Every day, of course, there will be various types of fees. For example, the cost for a month’s transportation, the cost for internet. Then other daily needs which of course will be different for each person.
Avoid Debt And Avoid Using Credit Cards
We need to know that technology has made it easier to apply for lucrative loans. But this thing is owed. In order to manage finances better, avoid getting into debt as much as possible because there is interest in paying the installments. Then besides that, you should avoid using a credit card too. Better not to be easily tempted by offers on credit cards. Also, think about the installments you need to pay after using the credit card.