Being able to manage your money well is not just about trying to make ends meet. You don’t have to have a lot of experience to manage your finances well either.
The challenge is to find a way to save a portion of your salary while paying off debts, covering basic living expenses and working towards your financial goals.
So if you’re looking for advice on how to manage your salary, you’re at the right place. I’ve put my thinking hat on to help you save and create wealth with your hard earned salary.
3 Tips To Manage Your Salary Wisely
Let’s check out tried and tested ways to help you become more diligent with your salary and create wealth for the future:
1. Create A Budget:
Create a budget based on your monthly net income.
Always budget based on your net income or the salary you get in hand after all deductions.
Calculate how much you spend on the basics, like rent, food, transport, bills and other basic expenses to create a budget and then stick to it.
Whatever is left is what you should be putting into your savings as soon as you get your salary.
It’s critical to save first and then spend rather than the other way around. Ideally, you should be spending 50% of your income on necessities, 15% on personal expenses and 35% should be going into savings/investments.
Budgeting helps you stay in control of your money and allows you to keep a track of your expenses.
2. Set Financial Goals:
Saving without a plan is like setting sail without a compass. You may be depriving yourself in the short term if you don’t know what you’re setting aside money for.
Take a moment and ask yourself what you’d like to achieve in the short and long term.
Based on what your goals are, you can decide how much to set aside and how long this would take.
3. Invest In Options That Work For You:
It’s easy to get overwhelmed by all the investment options and schemes available.
The important thing is to actually get started.
Your investment should be in line with what your future financial goals are. It’s important to do your research to find out what fits best with your goals.
Investments are all about risk management.
Remember the saying, no risk no reward.
Risk is absolutely fundamental to investing; no discussion of returns or performance is meaningful without at least some mention of the risk involved.
A high-risk investment is one for which there is either a large percentage chance of loss of capital or under-performance or a relatively high chance of a devastating loss.
By nature, with low-risk investing, there is less at stake either in terms of the amount of invested or the significance of the investment to the portfolio. There is also less to gain either in terms of the potential return or the potential benefit bigger term.
There is high risk (high risk and high returns) and low risk (low risk and low returns) but in the middle is OMEGAPRO (low risk and high returns).
Please note, in all you do with your salary, resist the urge to save your salary in your local currency.
A. Inflation rate.
Inflation is a measure of the rate of rising prices of goods and services in an economy. It is the decline of purchasing power of a given currency over time.
B. Exchange rate against the Dollars
A country dependent on importation will find their currency depreciate with rising Dollars against the local currency.
In summary, it may seem challenging to manage your finances well. But as you follow these steps, it’ll soon become a part of your monthly routine.