Businessman Tips On Money Management
Have you ever think the rich people become so rich, the reasone, was because they managed to spend less money.If you are going to be in business, you must learn about money: how it works, how it flows, and how to put it to work for you.
” When money realizes that it is in good hands, it wants to stay and multiply in those hands.” – Idowu Koyenikan
Here You’ll learn
Concept of money management
Reducing your Debt and
bonus tip – 50/30/20
Understand what's money management
The first step of money management is to understand what is money management? understand the concept of money management. In simple way money management is all it takes to reduce your spending, improve your ability to invest and save, and achieve financial goals that once seemed impossible.
If you are thinking that money management involves budgets and knowing where every rupees goes then you are right.
You should try Anti-Budget
Anti-Budget means you decide exactly where you’re going to spend your money–for going out, for saving, for investing, for rent–and you free yourself from feeling guilty about your spending.in simple way anti-budget is that you pay yourself first, pay your bills, and whatever is left is yours to use any way you want.
There are a few steps you need to take to create an anti-budget
- Pay yourself first (savings)
Paying yourself first is all about building up your savings, so this includes things like:
PPF and EPF
Other retirement savings
- Pay your bills You need to create a list of all your bills, including fixed and variable expenses.Make sure that you have all of your bills covered for the month.
- .Relax about the rest of your money
let me clear this in an easy way,
Let’s say that my monthly income is 55000 Rs. where i saved 15% of my income for savings. That’s 8250 Rs, leaving with 46750 Rs.
Now, i move on to setting money aside for my bills. i add up my mortgage payment, car payment, utilities, daycare, internet, cell phone, Netflix, and other bills, my and they add up to 25000.
after hit all my financial goals for the month and paid all of my financial obligations, i have left with 21750 Rs for the month.
Note: Anti budget only works if you track your debts or always looking for new big wins.
Plan for retirement
If you can not have a plan for your future than its create a fear of future. Planning for your retirement is an important component of creating your best life because the goal is to work less the older we get.So how much do you need to retire? While retirement planning is different for everyone, a quick calculation can use the 4% rule.
Create passive income sources
Now a days only one income source is not enough to live our life happily , right ?.think about can your monthly salary is enough for you ? can it full fill your needs ?
Passive income tend to be boosters of a work-from-home and be-your-own-boss professional lifestyle.There are many ways or sources for passive income.you can read more about passive income here. passive income is a most important part of money management.I’m saying that because of your 20k or 25k salary can’t help you to manage your money.
Start an investment strategy
For better money management you should need to make a better investment strategy.with small income you can not think to investing on stock market.It’s also important to know the risk of investing and whether the period you’re investing in will cover the costs.
If possible to take a guidance from a professional financial advisor. It also helps to know that an investment is not a great vehicle for an emergency fund.
Relook Your Debt
” what gets measured, gets managed “
You need to always eagle eye on your debt.try to reducing your debt.taking a loan is good because we can’t afford our luxurious lifestyle on cash but not over loan.there always better option are there think twice or do research before taking loan.
You’re saving money, meeting financial goals and building security — keep chugging along. Your focus will pay off.
Bonus Tip - 50/30/20 Rule
The Ultimate Lifetime Money Plan.
50% : Needs
30% : Wants
20% : Savings