Congratulations! You can already smell the new money in your account. After a month of hard work, your monthly paycheck has finally arrived. However, this euphoria often makes us forget ourselves and end up with an agonizing “old date”. So, to make sure that doesn't happen, let's take a look at 5 effective ways to manage your new monthly salary:
1. Allocate Funds Immediately!
Once your paycheck comes in, don't delay in dividing it according to your needs. It's like your monthly “financial map”. Some important items that you must allocate at the beginning are basic needs, such as rent / mortgage, electricity and water bills, internet, transportation, and daily food needs.
Next, allocate your salary for savings and investment. Set aside at least 10-20% of your salary for the future. Be it emergency fund savings, mutual fund investments, gold, or other instruments. The discipline of saving at the beginning will feel lighter than at the end of the month when money is running low. And finally, allocate your salary for debt repayment. If you have credit card installments, online loans, or other debts, immediately allocate funds to pay them. Don't be late because it will increase the interest burden.
2. Prioritize Needs vs Wants
After allocating funds for the important items above, take a look at your remaining money. This is where you need to differentiate between needs and wants. Needs are things that are essential for your survival, such as food, transportation to work, and medicine.
Wants are things that make life more comfortable or enjoyable, such as hanging out at a café every week, buying the latest gadget, or a luxurious vacation. Prioritize fulfilling your needs first. If the remaining money allows, then you can consider fulfilling some of your wants. Remember, not all wants have to be fulfilled at once.
3. Utilize Financial Apps or Manual Notes
In this digital era, there are many financial apps that can help you record and track expenses. With apps, you can see where your money goes and identify items that can be streamlined. If you prefer the manual method, a notebook or spreadsheet is also a good option. The point is, keep track of your expenses, no matter how small they are!
4. Apply the "Wait First" Rule for Impulse Purchases
Often, the temptation to buy things that are not really needed just pops up, especially when it's just payday. To avoid impulse purchases, apply the “wait first” rule. Every time you want to buy something that is not a basic necessity, postpone it for 24 hours or even a week. During that time, try to rethink whether the item is something you really need or just a momentary whim.
5. Evaluate and Correct Periodically
At the end of the month, or at least once every two weeks, take the time to evaluate your financial management. Are your expenses in accordance with the budget you have made? Are there any expense items that are inflated? From this evaluation, you can learn and make corrections for the following month. For example, if you spent too much on eating out this month, you can try to cook at home more often in the following month.
Managing your monthly salary does require discipline and commitment. However, by applying the 5 moves above, you will find it easier to control your finances, avoid “old dates”, and achieve your financial goals in the future. Good luck!
Source: nobubank.com
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