It’s Difficult To Manage Personal Finance!


There’s a bunch of saving tips that we can find anywhere in only 1 click, but the most concern that I usually hear about is even with the attempt to apply saving tips and actually we all can save some, there are still 2 common problems i’ve been facing, and I see lots of my friends coping with. For money savers, lots of us get into 2 types

Type 1:  After sometimes, our saving is still zero for countless reasons – and all sounds really reasonable to spend on ;). Well, at least these people are not always broken.

Type 2:  We try to save and save and save more, with the haunted thought that more saving is better and more secured, and we ignore our wants, forget that we’re young and should invest our money somewhere else to beautify our life and society, instead of looking at rising number in our account.  When making comparison regarding this matter, I usually ask myself “What make this world better, more beautiful and more diverse?” It’s YOU and me, we are the ones who bring smiles – tears, love-hate to others, and  all other emotions. we are the ones who can help others with our hands, our intelligence, and our sincere heart. We are the ones who can make more money and profit to contribute to society and to donate to those who need…our money shall mean nothing without us, so maybe rather to keep ourselves be beautiful creatures first before counting the spare in the account.

So I think it’s better to look at a larger picture, not only know saving tips, but also learn how to use money, how to balance our accounts for sudden needs in future and current worthy spending.  I’m not an expert, either a super excellent at finance. I used to get broken sometimes and most of time still finding it hard to get decide to spend or not to spend my money; so I fully understand your struggle to balance. But I’ve  tried different ways to manage better, learnt to take preparation for bad days; and here are my way

  1. Fully take your own responsibility for your money.  I truly grateful about the way my parents educated me, trained me to be independent and active in term of finance management.  Since my first year in university, while my friends got pocket money from their parents now and then because the parents didn’t want them to over-spend, my parents clearly limited the amount that they could support me per month, then transacted to my bank account the  total pack of 10 months for a school year (they skipped summer coz I could work more); and my mum told me “be responsible for your decision of using money! If you spend everything for 1-2 months, that’s your right; but don’t think of asking us for more.” By that way, I have been learning to control myself, or pushed myself to work if my needs arose.
  2. Divide your money into 3 accounts: Long-term saving(For unexpected events + personal guarantee) , short-term saving (for specific purposes) and monthly expense (which you allow yourself to spend AT MOST – again, please don’t be too hard to yourself, you deserve to live well.)
  • Long-term saving:

I have been asking myself how much is needed for an account to guarantee for my bad days including serious sickness, getting disease, months of being unemployed, accident, getting all your valuable possessions robbed and so on. The list really goes on and on because we never know what kind of tragedy will hit into our life. When my income as a fresh graduate is not so generous to be capable of earning a big amount at once and putting it aside for a long time, when I still have so many needs and plans that money is the first requirement,  how much should I  actually force myself to leave it alone? If I keep saving for long-term, then where will be the spare for other spontaneous purposes?  Thinking of those questions, I set a target for my long-term saving account based on my sufficient monthly expense for 1 year and some spare for other spends, try to imagine all kind of situation to measure the required finance. By that way I can be sure  I always have back-up plan and solution for even the worst situations happening to me.

  ***My little message***

Saving for long-term when you haven’t earned much is irritating, I know! But imagine if one day, for example , you suddenly and desperately want to quit job and follow your dream but the reality of having no money after leaving your boring but stable-earning job scares you and prevents you from taking decision. How much of regret will you probably feel? Money is never the happiness, but having secured finance will definitely give us more freedom of choices!  

  • Short-term saving:

I usually target for short-term saving in 4-6-9 months or 1 year ; young people like us usually consider that period of time as long-term saving though, probably because 1 year is long enough compared to our only 20-something years of living. However, as the way I define above, long-term is for truly unknown events while for short-term, I apparently have intention of what that amount will be spent on. To know how much I should transact into this account, I usually create a check list of what I aim for in 6 month or 1 year, then depending on my traveling plan and other self-development activities I will calculate how much I will need to save per month till the set time.

It’s been almost 1 year of my full-time work life and only 5-6 months ago I started thinking about long-term saving.  For the past 1 year, most of my short-term saving has been paid for my travel, about one-thirds was for the fitness club and some studying courses. So far I think i’m satisfied with my financial management and all my investment to enrich my inner life.

  • Monthly Expense:

This is where we can apply whatever saving tips written on the internet and magazines. Since I already allocate my income into three parts at the beginning and move all  savings into different accounts, over-spending is hardly my issue. Therefore, I only apply 1 concrete rule: trade-off! which means if my girly glossy things consume a big portion, then I have to cut on my eating out at expensive restaurants, time at coffee shop, and other costly entertainment activities. This rule makes me think twice before I want to purchase almost everything and to always consider what my priority is.

Currently, all the banks have been released so many services to make the use of your account more convenient and manageable. To me online saving service is one of a kind. With 1 card, I can open different saving accounts for different purposes just easily as a piece of cake!  At the same time opening the online saving account, I can set the saving term (which will have equivalent interest rates) and the date of auto transaction from my main account. So 6 months and 1-2 months of rotation is set for my  long-term  and short-term saving accounts respectively; and the auto date of transaction is only 1-2 days after salary receiving day. To be exact, I won’t have any chance to think twice before getting the message notifying that the number in my main account for monthly expense got decreased significantly and in another message, it will be the subtracted already got settled into my savings :))

 *****

Dear my friends,

I hope this piece of sharing is not only about money but also about a kind of lifestyle at which you can be free from all regret of overspending on the unnecessary;  get yourself prepared for the “rainy days”; live independently and generously no matter how much you actually earn; and  realize what is important to you and what is not when it comes to setting the priorities.

How do you usually manage your finance then? I would love to know what you can do to get your settled money generate more earning if possible.

 

 

 

 

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