Have you come across the phrase, "Managing your money is more crucial than earning it"? First State Community Bank claims that without proper money management, a large income won't last long. It's important to take note of the following points to understand the significance of managing your finances after earning an income:

KNOW THE LATEST CONDITIONS ABOUT ONLINE SHOPPING

Unlike the initial stages of the pandemic, the current economic situation appears to have improved. The economic sector has adapted to the circumstances and is functioning more efficiently. A majority of businesses have shifted towards online services, while physical offices are once again open for employees seeking employment opportunities. Despite this, people's requirements seem to be on the rise. With the advent of online shopping apps, individuals are spending more on non-essential items. Consequently, we are stuck in a cycle of wastefulness, which is far from ideal. It is imperative that we take action to transform this lifestyle.

What would be the most appropriate method to bring about this change?

To ensure our financial stability, it's important to adopt a suitable method of financial planning. This will enable us to meet our basic living needs without any financial difficulties. By managing our finances effectively, we can prepare ourselves for any unforeseen financial emergencies. However, before devising a spending plan, it's essential to assess our current financial situation. This involves taking stock of our savings and the money available at hand.

1. Check arrears or debts

Initially, verify any overdue or outstanding debts that are yet to be settled or paid off. It is crucial to prioritize the payment of lawful debts in order to avoid any further charges or penalties. Avoid procrastinating the repayment of the debts, especially when you're investing a large amount of money on non-essential items. Always bear in mind that the fundamental needs of an individual include shelter, food, and clothing. Once you have confirmed that you do not have any debts at present, you can move on to the subsequent stage.

2. Check the income

Next, evaluate your earnings.
It's crucial to assess and contemplate your future expenditure based on your income. Your earnings will determine your future outlay.

SHARE THE FINANCES INTO SEVERAL PARTS

As a lady, it's essential to be aware of your financial situation, including your debts and income. Once you have a clear understanding of your financial status, you can categorize your expenditures into different parts and determine which ones are most important.

1. Monthly living expenses

All the necessary expenses for survival each month, like food, housing, transportation, and utilities, can consume up to 40 percent of your income. It's crucial to budget and save for these expenses. For instance, you can minimize transportation expenses by walking to work if it's feasible, and use electricity sparingly.

2. Emergency or reserve funds

Trust me, ladies, neglecting to allocate funds for an emergency or reserve fund may not seem significant, but it can prove invaluable in times of need. These funds are crucial when unforeseen circumstances arise, such as the abrupt emergence of a pandemic like Covid-19 or a layoff. Just as sources of income can vanish without warning, disasters can strike at any moment. It is recommended to have an emergency fund that is at least six times your typical monthly expenses and is kept in readily available financial instruments.

3. Insurance, donations and investments

It's crucial for individuals to categorize their finances into three key areas. The first area pertains to insurance, with a particular focus on health and life insurance. Secondly, it's important to allocate funds for charitable donations to assist others in need. Lastly, investments should be considered once priority needs have been fulfilled, or if there is extra income available.

How about it, girls ? Don't miss the steps to manage your income well, okay? Good luck !