Most people get their monthly salary and spend it on things that they do not really need. In the end, they would end up with no more money at the end of the month and will be forced to take a loan for emergencies. In order to avoid this type of situation, it is very important for one to learn tactical money management, which refers to handling your wealth strategically.
In order to handle money intelligently, one has to make sure that he rations and distributes his income to many different mediums. First of all, he has to make sure that he takes care of all his bills before anything else. He must take care of his monthly bills such as his telephone bills, his rent expenses, his electricity bills, his water bills, and his internet bills.
After he has taken care of all his monthly bills, he now has to put money aside for all his daily expenses. These daily expenses can be considered variable costs because they are spent in order to make more income. These costs would include the supplies costs like pens and notebooks, food costs for energy, and transportation costs to get to work.
Now that all of the total costs have been taken into consideration, one will have a rather sizable amount of his salary left. The next thing he should do is to take out around twenty percent of his income and put it into an emergency fund. This emergency fund will only be touched whenever there are emergencies or urgent expenses.
After one has already finished putting some cash into his emergency savings fund, he has to make sure that he makes a separate fund for investments. As they say, the rich grow because they know how to make their money work for them. For average employees, this can also be done but through small scale investments.
He can do this by investing in various mediums that are offered by different financial institutions. He can invest in mutual funds or other money market mediums that are offered by the bank. If he is a bit more daring and wants some more profits, he may also invest in the stock market or forex market provided that he study how it works. Stocks, in particular, are actually quite safe if one invests in blue chip stocks and leave them there to grow without taking them out.
Whatever cash he has left, he may now spend on miscellaneous items and for his pleasure. This is what he can use to buy a new phone, buy a cake for his family, or take his significant other out for dinner. The remaining cash is now his to spend on whatever he wants.
As one can see, handling income is not that easy but not too hard as well. One must just overcome his urges to spend and develop strategies on approaching his finances. Once he does this, he'll have no problem rationing his cash.
In order to handle money intelligently, one has to make sure that he rations and distributes his income to many different mediums. First of all, he has to make sure that he takes care of all his bills before anything else. He must take care of his monthly bills such as his telephone bills, his rent expenses, his electricity bills, his water bills, and his internet bills.
After he has taken care of all his monthly bills, he now has to put money aside for all his daily expenses. These daily expenses can be considered variable costs because they are spent in order to make more income. These costs would include the supplies costs like pens and notebooks, food costs for energy, and transportation costs to get to work.
Now that all of the total costs have been taken into consideration, one will have a rather sizable amount of his salary left. The next thing he should do is to take out around twenty percent of his income and put it into an emergency fund. This emergency fund will only be touched whenever there are emergencies or urgent expenses.
After one has already finished putting some cash into his emergency savings fund, he has to make sure that he makes a separate fund for investments. As they say, the rich grow because they know how to make their money work for them. For average employees, this can also be done but through small scale investments.
He can do this by investing in various mediums that are offered by different financial institutions. He can invest in mutual funds or other money market mediums that are offered by the bank. If he is a bit more daring and wants some more profits, he may also invest in the stock market or forex market provided that he study how it works. Stocks, in particular, are actually quite safe if one invests in blue chip stocks and leave them there to grow without taking them out.
Whatever cash he has left, he may now spend on miscellaneous items and for his pleasure. This is what he can use to buy a new phone, buy a cake for his family, or take his significant other out for dinner. The remaining cash is now his to spend on whatever he wants.
As one can see, handling income is not that easy but not too hard as well. One must just overcome his urges to spend and develop strategies on approaching his finances. Once he does this, he'll have no problem rationing his cash.
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