Imagine you are going on holidays. You would not want to leave the comfort of your home and travel by road. You have to check in at the hotel and check out. You have to shop for the best offers. However, what happens if you want to travel? When you want to travel, you want to carry all your luggage with you.
It may take a lot of money to buy your preferred kind of suit or shirt. You will also want to take along some cash to exchange the currency of the country you are going to travel. This means that you may also have to take along money to become a resident in the country you are going to travel to. This means you might also have to carry long lists of items. This therefore means that any time you travel, you will also have to carry cash.
This means you must plan ahead, especially in cases of holidays. You must have a personal finance budget in place to make financial decisions when you are out and about in these holidays. Do you have a holiday plan as part of your personal finance budget?
Personal finance spending money means you will have to put effort into identifying what you will spend and what you will have to put aside. It does not mean you will have to completely deprive yourself. You can still go on vacation and have fun at the same time. What it does mean is that you will have to spend little to no money at all to have the kind of vacation you want.
When you can spend a lot of money, you should do it. It is recommended that you save 10% of your salary annually and 10% of the money you get as gifts and collaterals. This is because financial emergencies happen every day and you must be prepared.
Do you want to improve your financial emergencies plan? Below are suggestions, but of course you may want to do more or less depending on your situation.
- Have at least enough money in your savings account to cover three months worth of expenses in a bank. Saving three months’ worth of expenses is not difficult. If you can do it, you certainly can cover an emergency expense.
- To have a good plan for managing your money whether it is in sports, vacations or emergency fund, you must plan your money before you spend it. You must identify the area where your money goes first. Then you must identify where your money should be spent.
The area where you do not spend money is the area where you accumulate your money. You do not spend money on the categories where your money goes to. If you spend money on entertainment, you go to the entertainment place. With pokerace99 entertainment, you go to the cinema. Automatically having money in such an area will give you extra cash and extra ease. Thus you limit how much you spend in each category.
In general, your money goes to categories like food and clothing, and every cent goes to categories. The categories of entertainment add up, while the categories of transport, utilities and other expenses do not. Failure to spend money on needed or wanted items will end up making you miserable in the long run.
The biggest and perhaps the most difficult part of financial planning is in evaluating your current financial position. You must go back in time 3 to six months and itemize your expenses and income. If you want to save money, you will have to do a lot of cutting back on your expenses. If you want to put money away, you will have to cut out on expenditures to save money. Only then can you accumulate money to be saved.
Now it is important to note that there are no fixed rules for goal setting and financial planning, as some experts would have you believe. Save money and financial planning is not the same in all respects and in all countries.
It is a universal law that if you save a percentage of all your income, you will become rich, as the percentage you save is compounded into a big amount. This time is also a catch up; because I can’t tell you to cut back on your expenses at this low percentage, but I can tell you to save more of your income.
There are many expenses to cut out, but the real beauty is you will have more money and you can buy more. If you put your mind to the task, you will easily figure out ways of saving a greater percentage by cutting back on unneeded or unwanted expenditures.