Financial constraints is one thing that can get you frustrated, everyone wants to be able to track their finances but not all are disciplined enough to be With all the information we see and hear about money every day, few people really have control over their money. We tend to let money control our lives, rather than enrich our lives.
Although money cannot bring you happiness, it can bring you a sense of security. If you do not have experience in money management, you may always feel that your life is only one step away from a financial cliff.
1: Create A Budget
An author, John C. Maxwell explains budgeting perfectly, “A budget is telling your money where to go instead of wondering where it went.”
A budget is just a plan for your money so that you can better understand where you are going each month.
A popular and effective way to budget is with the 50/30/20 rule. How it works is 50% of your income goes towards the necessities (bills, food, housing, etc.), 20% of your income goes towards savings and the remaining 30% you can use for whatever you please.
2: Spend Less Than You Earn
It is easy to know that your expenses should be less than your income, but it is much more difficult to actually do it.
To do this, you need to track expenditures. You can do this by writing a record of your purchase or using a free personal finance application.
3: Create an Emergency Fund
These are Fund that can be used if you’ve lost your job, you have a medical emergency, your car breaks down, you have emergency home expenses (like a leaky roof), or you need to travel to a funeral.
Set aside a minimum of 5% of your salary for savings before you start paying your bills. Better yet, have money automatically deducted from your account into a separate one.
5: Create Multiple Source of income
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Having multiple sources of income can help you reach your financial goals much faster. The benefit of working a side hustle is that you have more disposable income to play with.