Many people have difficulty controlling expenses when getting a salary for their work. Indeed there is so much to do, so many needs and desires. Therefore, you must be wiser in managing money to secure your future. You might need financial advice on how to best use your salary.
Check out financial advice from Adhil Shetty, CEO of BankBazzar, as quoted from Etnownews.com
1. Start with monthly budgeting and obey it
One of the first things you have to do is create a budget that tells you how much money you need to save, invest, and spend.
When getting a salary, make a list of your routine expenses and discretion, and put in some money to save and invest.
2. Save and invest
Saving and investing will secure your financial future. Adhil suggests that you should allocate at least 20 percent of your income for savings and investment.
Save and invest is very important so that your deposits grow effectively. You must choose your investment product according to your age, risk profile and financial goals.
If you find it difficult to save money, start creating a periodic deposit account that automatically saves a fixed amount in the bank deposit every month.
In addition, you also have to build an emergency fund that can help deal with possible job losses or medical emergencies.
3. Pay off existing debt
Managing debt must be one of the top priorities when your salary arrives. Set aside the amount you need to pay your debt at the beginning of the month.
Make a list of your debt and prioritize it according to the interest rate and due date. Automate your payments to avoid missing deadlines and pay late fees. Credit card bill payments must be made before the due date to avoid high interest costs along with penalties. Make payments on time so that your finances and credit score stay healthy.
4. Protect yourself with insurance
Insurance serves as a protection that reduces financial risks arising from emergencies such as illness and death. Term policies and health insurance policies are a must for all paid individuals with dependents’ family members. Often people still don’t realize the big benefits that come from insurance because they don’t see it as a producing instrument. But insurance is a financial instrument that protects you and your family financially during an emergency.
Read more: This is the Best Way to Allocate Your Salary
