How to manage money effectively?

How you manage money through spending, savings and investment has a direct impact on your own life.

But this issue has not been much concerned. That is one of the reasons for financial instability.

From an early age, everyone learned how to calculate and plan their own. But as adults, it is rare for anyone to use it to create a habit of managing their own money. Skills such as budgeting, controlling revenue and expenditure, ... are often less interested in people.

Therefore, if you want to achieve financial freedom, increase property quickly, learn how to manage money smartly and effectively.

1. The golden rule in personal financial management
1.1. Spend less money than you earn 
If you earn VND 7 million / month and spend VND 9 million / month, you will definitely fall into "a spiral" of debt.
If you spend all your earned money, you will never have a backup plan for future emergencies like unemployment, sickness ...
Therefore, spend less than the amount earned. This allows you to freely save, prepare for the future and deal with unexpected crises in life.
The greater the gap between income and expenditure, the more opportunities you have to fulfill the financial goals you desire.
How to save 50% of income each month

1.2. Always plan for the future - How to manage money effectively 
First, it is necessary to accumulate a contingency amount for life emergencies that you cannot anticipate. Such as car repair, sickness, unemployment ...
The emergency fund will help you take the initiative in money when facing financial difficulties, limiting debt.
According to financial experts, it is necessary to prepare an emergency fund of 3-6 months of normal living expenses. At least 5 - 10% of income should be saved each month to save for emergency funds.
Besides, preparing retirement is also very important. This money will help you not to worry about money to maintain life when you retire.
About 4 - 5% of your monthly income should be spent on your retirement fund. The sooner you accumulate, the more relaxed your retirement life becomes.
It will be tough if you don't prepare a plan for retirement and seriously implement it.
How to build an emergency reserve fund?

1.3. Find ways to increase assets
Investing is the best way to quickly become rich. Investing properly will cause "money to make money".
Currently, there are many attractive investment channels to choose from such as bank savings, foreign currency, real estate, securities, Bitcoin ...
However, it is necessary to consider and calculate carefully before deciding to invest capital. Because the financial market always has many fluctuations and risks that no one can anticipate.
Some factors such as initial investment capital should be noted; profit margin; safety; liquidity ... to ensure safe investment, increase profits.
Besides investing, finding an extra job outside of office hours is also a bad idea to increase your income.
With flexible work on time like Grab driver; tutor; online business ... you can earn millions more every month.
This money will help budget spending more comfortable. It also allows you to easily pursue the financial goals you desire.

2. Send bank savings - How to manage smart money 
This is a necessary job instead of leaving all the money at home. Bank savings not only ensure safety, but also help you to have a small monthly interest.
Currently, deposit interest rates at Vietnamese banks range from 7-8% / year. Therefore, this is considered a safe investment channel, bringing stable profits and low risks.
In addition to traditional savings books, you can choose to open a savings account online. All transactions and account management will be made easy; quickly on phones, laptops ... saves time and effort
Some issues such as interest rates need to be carefully investigated and reviewed. account opening procedures; the bank's reputation ... to maximize the benefits of its savings.

3. Budgeting
Most people often have difficulty controlling their spending habits. Do not know how your money has been used.
This is a common cause that makes you fall into an "empty" situation, even leading to debt.
Create a habit of budgeting; will help you manage and control your cash flow effectively. Expenses are clearly divided with specific limits; for you to use scientifically.
For example, with a family income of VND 15,000,000 / month, you can divide your budget according to the rule of 50/20/30 as follows:
50% of income (7,500,000 VND) for essential expenses such as renting houses, utility bills, food, gas ...
20% of income (VND 3,000,000) for financial goals such as savings, debt repayment, investment ...
30% of income (VND 4,500,000) for personal expenses such as tourism, entertainment, shopping ...
However, depending on the conditions and needs of each person, this number may increase or decrease to suit the situation.
But still, have to ensure to meet daily needs as well as future financial plans.
The sooner you budget, the more you manage your spending and realize your financial goals, will become easier and more effective.
Regular monitoring and recording of revenues and expenditures is the best way to reasonably budget. Many people often skip this step because they are afraid of taking notes and calculating.
However, it can be simplified by using Money Lover's expense management application on phones, laptops, tablets ...
The application allows to monitor and manage receipts and payments clearly and in detail. You will easily understand your current financial situation; to adjust the appropriate spending plan.
In addition, the Budgeting feature on Money Lover will help create and control personal spending budgets more effectively. You will be warned about your spending limit in accordance with your budget.
In order to maintain the budget, it is necessary to seriously follow the plan. Should spend less than the amount earned. Maximize unnecessary costs, to save money; Accumulate more for the future.

4. Use smart credit cards
Owning a credit card is not difficult. But how to use it properly, avoiding debt is a problem that is not simple.
Limit your spending if you can't pay your balance on time. Before deciding to shop with a credit card; Consider your ability to pay that debt in the future.
Credit card transactions should be made; At the beginning of the cycle to make the most of interest-free time.
Try to pay the outstanding balance as soon as possible. Late payments not only pushed interest rates up; but also reduces your credit score.

This will greatly affect your bank loan opportunities later.
Absolutely do not withdraw cash from credit cards; to avoid excessively high fees and interest rates from banks. This will definitely make your financial situation even worse.