10 Steps to Wise and Prudent Financial Management
How to overcome strong financial stress with 10 Steps to Wise and Prudent Financial Management? You have to start managing your finances from the beginning because if it is too late, you will incur debt around the waist and the result will be bad for decades. Instead of you a healthy person will become ill and instead of you get peace of mind, you will be burdened with debt and blackmailed by Ah Long (Loan Shark).
Let’s get 10 Steps to Wise and Prudent Financial Management so that you can avoid from unwanted things in the future.
10 Steps to Wise and Prudent Financial Management #1 - Organize Savings and Spending
Organize Savings and Spending is the first step in 10 Steps to Wise and Prudent Financial Management Episode 1. How to organize savings and expenses so systematically and consistently?
There are many ways you can use. There are three (3) ways to identify expenses in the 10 Steps of Wise and Prudent Financial Management and can be translated as below:
- Find out the actual expenses each month
- Find out about fun spending
- Know contingencies
Find out the Actual Expenses Each Month
The equipment you need is a pen, a piece of paper and a calculator. You should make a short list of what types of actual expenses you need to spend from your income. Actual expenses such as PTPTN education loan installment payment, Zakat payment, car installment, house and others. Add it all up and keep in mind that all the expenses that have been added up MUST be prepared by you every month.
Knowing Fun Spending
This is not a joke because it is this category of fun spending that will usually distract you from the real goal. For example, if you have a monthly salary of USD4,000, you must feel very proud because of your hard work are paid with a monthly salary. We would spend most of our income during weekend. You eat in a nice place and buy a smartphone accessory that costs hundreds of dollars while you still have 4 weeks before the next paycheck arrives.
Buying no necessary items online is also known as fun spending.
And finally, you have to go into bad debt because you are not focused on actual spending and there are among the many cases where real spending money is used for fun expenses like buying watches, buying car and motorcycle accessories or being influenced by Facebook Live. Don’t be easily fooled by merchants who sell goods that don’t provide significant benefits to your quality of life.
Festive spending is also detrimental to us if spending is not controlled. Lots of cheap sales the festive season and we are easily swayed to buy. Be careful if you buy items especially during the festive season because unknowingly, you have spent part of your salary.
Knowing Contingent Expenses
The medical treatment cost of a parent’s or self’s, repairing a vehicle involved in an accident or your handbag being stolen are examples of contingent expenses that must be taken into account. The recent floods in our country have not only destroyed homes, property and the surrounding area, but also caused us to have a hard time living because we had to start a new life. Although we do not know when such a thing will happen, but you try to follow the Malay proverb that is “prepare an umbrella before the rain”.
Usually contingent expenses require very high costs so early preparation is necessary to prevent you from getting into a lot of debt.
10 Steps to Wise and Prudent Financial Management #2 - Don't be Proud of Yourself
The second step in the 10 Steps to Wise and Prudent Financial Management is Don’t be Proud of Yourself. We often use all social media platforms such as Facebook, Instagram, Tik Tok and so on by updating status and promoting new items if you are an entrepreneur. But these days, more and more people are too bold to show off what they have and pride themselves on the wealth and earnings they get. This creates a society that is proud of itself.
For those who are born rich, it is not surprising to be proud of the income and assets they have. But if made with the intention of ‘pretending’ will cause many to follow with the negative behavior as mentioned.
What Happens Next?
If the nature of self -pride is out of control, more and more people who cannot afford it will follow the rhythm of ‘self -pride’ of celebrities or rich people. Your spending becomes like an artist’s and your makeup is outrageous. The lifestyle of a humble person is no longer ignored and there is a racing nature to be proud of oneself. So the 10 Steps of Wise and Prudent Financial Management cannot come true because the nature of self -pride is on display from each of your own actions.
Want to know the next step in 10 Steps to Smart and Prudent Financial Management? Please click to the next page.
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