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7 Personal Financial Planning and Investment Tips for You

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personal financial planning

To be rich and prosperous is certainly the dream of everyone. No matter what kind of job or profession you do, getting lots of money and lasting a long time is the goal you want to achieve.

Hard work may have previously been the standard for earning a lot of income. However, now working smart should become the standard. Why is that? Because working hard today is synonymous with uneducated people and their work relies on muscle or energy. Meanwhile, educated people must use abilities (skills) that rely on the brain or mind.

Most people are busy managing their financial conditions. Not infrequently those who are successful, but many also have to struggle. So what should be done? Check out the following 10 personal finance planning tips to live a prosperous and happy life.

1. Saving and Investing

It is necessary to be diligent in saving or setting aside the remaining income after it is used to meet daily and monthly needs. Not only saved, so that the money owned can generate more money should be invested. Investments can be made by buying precious metals, joining a bank or insurance program with an additional amount of money, and many other programs that can be followed.

With the investment, people who are extravagant or consumptive can be held back because their money has been allocated to investment. Savings can be easily collected, so regular savings programs are not suitable for consumptive people. Try to set aside at least 50% of income, if not maybe 30%. The smallest percentage that must be left at least each month to be saved is 10%.

Related : Why is It Important to Start Investing Early? Here are Why You Should Start Now

2. Record Every Expense

Records of every financial transaction must be made. Even though he is not an accountant, recording every expense must be made so that he is not too wasteful and knows what the money is used for. We can record expenses in a book, on a cellphone, or on a personal computer excel.

Make sure the records are easy to find and find so that each half of the month and the end of each month can be evaluated how much was spent. If this month there are too many expenses, we can reduce expenses or prevent unnecessary shopping in the following month.

Related : 7 Principles of Long-Term Investing for Successful Prospective Investors

3. Learn About Financial Arrangements

Humans must continue to learn, especially learning about finance such as budgeting, investing, and passive income so that financial freedom is achieved. Making a budget or an estimate for monthly expenses must be done so that life is more focused. Then make an investment and remember that investing is easy.

Try a small amount first, for example, $100 per month. Lastly, passive income, which of course has been heard a lot, but is difficult to do. Find as much information as possible about how to get passive income. Examples of passive income include Dropshipping, Real Estate, Dividends earned from stocks, or it could be from blogging if you like writing blogs.

Related : Investment Tips in Peer To Peer Lending (P2P) You Should Know

4. Learn to Live Frugally

Always remember and apply frugal life because no matter how big your income is, if it can’t be balanced with frugal living, it will be useless. During the week, try to eat at fancy or expensive places only once or twice.

Living frugally can be done by buying things that are really needed. If you are usually tempted to shop online because of the many promos or discounts, try breaking the desire to shop. Think again about how necessary the item be purchased, if it is not really necessary then you should refrain from buying.

Related : Warren Buffett’s 9 Investment Principles for Making Money

5. Have No Debt

Make sure you don’t get into debt at the bank if it’s not for something important. Why? Because borrowing money from the bank adds to the cost of living in the form of interest that must be paid. Piling up debt can be stressful, especially if the debt is large and exceeds your monthly income.

Related : Trading vs. Investing: What’s the Difference?

6. Create Scarcity

Maybe scarcity makes you wonder what it is like? Scarcity is a condition that makes it seem like you are in need, so you are reluctant to spend a lot of money.

How to? First, make spending priorities. After fulfilling all the main needs, make yourself powerless to buy anything with an investment or insurance program. It is as if there is almost no money left in your savings account, when in fact you are just moving it elsewhere.

Related : Protect Your Investment And Avoid Fraud Investments

7. Cut the Expenditure Budget

Try occasionally to cut monthly expenses. For example, every month it costs $1000 so try to spend less than that. If you feel heavy you should not do it often, but if you feel you can survive then do it often. Occasionally it is necessary to conduct self-evaluation by challenging yourself to endure difficult situations.

Those are some things you can do to manage your personal finances so you can live a prosperous and safe life for a long time. Temporary fun in the near future could allow future misery so be sure to prevent that from happening.

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