For people who have income every month, understanding how to
manage finances that are good for themselves is important. Not everyone is able
to manage finances well so that there are still many people who often complain
because their salary has run out even though the time to get the next salary is
still long. We must be able to manage finances so that we are not tempted to
make loans or owe. Apart from that, you also have to be able to control
yourself not to buy secondary needs that are actually less important. A big
salary or a small salary will not be able to guarantee the adequacy of all our
needs and happiness or that of our family. All of that will really depend on
how financial management is implemented. Therefore, the ability to manage
finances needs to be studied and implemented for everyone in their lives to
help meet current and future needs.
Then how to start managing the monthly income? Here are some
ways that can be applied.
1. List of Salary Allocation Percentages
Basically we can allocate a monthly salary, as in the
following example: 45% for basic needs; 20% to pay installments or debt; 25%
for savings; 10% for daily money. The percentage used will be very flexible
depending on how needed and how we want to allocate it. The use of percentages
like this will help in allocating income in more detail.
2. Formulas 40 - 30 - 20 - 10
If we have trouble doing the first method, maybe we can try
using this formula. The following is a description of these figures, namely 40
percent of salary is allocated for living needs and monthly expenses such as
the need for food, transportation, electricity, water, internet quota, and so
on. 30 percent of the salary is allocated for the needs of facilities such as
car payments, house payments, and debt if any. Make sure to pay off debt first
and try not to increase debt if the previous debt has not been repaid. 20
percent of salary allocated for savings. This savings can be used to pay for
the child's education in the future. But you can also make this section more
detailed, such as for savings, investments, and so on. 10 percent of salary is
allocated to pay zakat or charity. It can also be set aside as a reserve fund
for emergency and sudden needs.
3. Need or Want?
People are quite difficult to distinguish between what is a
need and what is a want. This is what can make a person become in debt if they cannot
control their expenses. Needs and wants are two different things. For example
cellphone. You already have a mobile phone that functionally meets your needs.
However, after seeing the newest cellphone, you replace your cellphone by
buying the cellphone because it looks more luxurious. As a result, you use the
money to buy a cellphone even though you haven't paid for your child's
education and car payments. Finally the bills increase while the income does
not increase. Therefore, this is the importance of sorting out between needs
and wants.
4. The Importance of an Emergency Fund
An emergency fund is a fund that is deliberately prepared to
anticipate various emergency conditions that require immediate cash. For
example, when you suddenly get laid off or suddenly fall ill and require
hospitalization that is not covered by insurance. It can also anticipate
unexpected events in everyday life such as car breakdowns, accidents, punctured
tires, and so on. If we have an emergency fund, maybe we can avoid getting into
debt or even using savings that we have a purpose for using in the future.
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