Typically, each family have certain needs that differ. There may be families who use 50 percent of income to meet the needs of every month's life, but there is also a family that can only be leaving not more than 5 percent of income to invest. In other words, almost all the income out to meet the cost of living. So how much is the proper one?
The important thing is have to make sure that the monthly expenditure accordance with the basic needs of your household. Thus, how to determine reasonable amount of monthly expenses? The idea is to make shopping budget. With this way, we can control or have a clear direction of every expenses. Try to plan for the entire family need for each month, and remember plan just for the basic needs that already agreed before among member of family.
And now how about the saving and investment? Let us make definition first of this statement so as we could get clear knowledge and understanding. Savings are funds that are ready to cash out at any time if we need it, for example savings account on bank. While for the investment could mean funds that are developed to get larger amount in the future, and usually with a certain risk.
Every family or personal need to have a bank saving account as a reserve fund purpose in case of something unpredictable happen and need cash money urgently. It does not need large amount, but also not too small. For an ordinary employee, most financial planner will suggest to have saving account 3-6 times of routine monthly expenses. Each month have to save money in accordance to meet this 3-6 times of routine monthly expenses amount. Why have to be 3-6 months prepared? Because when someone get loss of his occupation, usually it takes 3-6 months to hired a new job. So this saving account means to fulfill your daily life until you got a new job.
If this amount is already enough, the monthly surplus funds can be transferred to the investment products. The allocations can be to various products.The tips is do not choose just one, but it needs to be combined according to your needs and your financial situation. And also adjust to the purpose. For example, education costs for children, retirement preparation, as a business capital, and so forth.
There are many investment tools and products to choose, such as mutual funds, deposit, gold bar, government obligation, and so forth. You could find references of these products and learn by buying books or learning from experts. The easiest way is try to ask your local bank where you place your saving account. Nowadays many investment company cooperate with banks to sell and promote their investment products and services.
Hope this will useful for your financial life.
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