Thursday, November 26, 2009

Managing Money

As you may well be aware of we are currently nearing the end of the month of November. And next come the month of December and end of 2009. Some of you may get a year end bonus or maybe some of you has already gotten their bonus in the previous month or there are some cases where we may not even get a bonus from our company. Anyway don't feel down because there is one thing that all of us eagerly awaits for at the end of each month and it always comes without fail. You guess it right. Its our paycheck!
But have you experience the feelling that before the end of the month, you don't seem to have enough money?Some of you might come to the conclusion that the salary that you earned is not enough but I have friends who is earning much less that what I am earning but still able to live with enough money. How is that possible? I have read a book by T. Harv Eker entitled 'Secrets Of The Milionaire Mind'.

This book is very good. It teaches you how to set your mind to be like a millionaire's mind. Anyway, there is an information in this book that guides you on how to manage you money. Its quite easy actually. Let me share it with you.

Basically, you need to divide the salary that you received(after deducting the EPF,SOCSO and tax deduction) into 6.

1st:50%-55% of your salary is for paying your necessities. Paying the bills, buying groceries, food and etc.
2nd:10% of your salary is used for investment to be financially free. Insurance investment, stock market, unit trust and business investment.
3rd:10% of your salary is used for you to buy any things that you really want. It is sort of like rewarding your self for all the hard work you have done in the past month. You can buy that new hand bag you wanted or that new shoes.

4th:10% of your salary is saved for education purpose.For example, buying books or enrolling in certain seminars that will help you gain new knowledge to improve yourself.

5th:10% of your salary is saved for future spending on things that you really wanted but you have to save money to buy it or for emergency purposes. Example is going on that vacation to Australia, buying that PS3 that you always wanted and paying for that road tax and car insurance.
6th:10%-5% of your salary should be allocated for charity or to give to the needy. If you have your parents and its your responsible to give them money then this also fall in this category. There is a saying that what you give is what you get back in return. The more you give the more you get back. So have a good heart and you will soon have more than enough money.
Based on this tips you can actually gauge whether your current income in a month is actually sufficient or not. If you can divide your salary like this and not having any financial problem, then that means that your salary is enough or more than enough. But if you divide your salary like this and you still experiencing financial problem such as insufficient money and so on then that means the salary you earned in each month is actully is not enough. Then you have to find new ways on how to increase your mothly income.

So that is some tips that you can use to manage you monthly income. Based on my experince it is a very good way for you to segregate your money wisely so that you actually know where your money actually goes to. What I do learn from my experience is that to follow this method it takes alot of discipline. So if you discipline yourself to follow this method to manage your money, trust me you won't have that money problem you keep complaining about. Try it. You wont' regret it.

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