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Money Management

by: Dominica Vibes News - November 24, 2014
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money-matters

Nowadays; most first salaries are spent on celebrating the new job. So you find people taking their significant other out; or shopping or they go to the bar and order a couple rounds of drinks for their friends.

It’s okay to celebrate; however, you should be cognizant that this is the time to be paying attention to finding or developing ways to take charge of your money. In other words, find ways to make your money work for you. This is known as financial planning.

To properly plan your finances; you should bear the following in mind:
1. Clearly define your financial goals
2. Make plans to reach your goals
3. Take action until your goal becomes a reality

At the end of this article is a guide to creating a goal planner.

One sure way to plan is through budgeting. In setting up your budget, always ensure that you make allowance for savings. In preparing your budget, here is an important breakdown:

1. 65% of salary to recurring expenses
(rent, utilities, food, transportation, tuition, bank loans, car payments etc.)
2. 15% of salary to savings
3. 20% of salary to living expenses (entertainment, clothing, miscellaneous purchases).

Another more effective way of ensuring that you save is by automatic transfer. In this regard, if your salary goes directly to the bank, open a separate account and have the bank automatically transfer 15% (or what you’re comfortable with) to that account. This new account automatically becomes your savings account.

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Log on next week for more…Follow the above and stick to it; then watch your money grow for you!