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.