Managing Your Salary

There is a man receiving USD 10,000 per month as a general manager in his company, but almost 60 percent of his salary used to pay his debts. At the same time, there is an ordinary staff whose salary is not that big, but he has assets with a value continues to increase. How should we manage our salary?

Someone called the rich is not determined from the amount of money raised each month, but of how a person manages his salary.

There are people with high salary, but always run out their money every end of month due to their consumptive attitude. How can a man, as a manager, receive USD20, 000/month, run out of money to pay debts which are 60 percents of his salary? It is because of his 76 kinds of expenses. The manager spends his salary to participate in golf club, gym, spa and the other.

There are four things to consider in order to properly managing your salary. Consumption, debt, investment, and protection.

Make a priority
In the consumption items, we have to make priorities, ranging from social expense, debt repayment, investment, and the life needs. The life needs, such as daily needs, are unlimited. Therefore, the expense for life needs must be spent wisely.

Spending has no limits, but you have limited income. Therefore, we have to allocate appropriately.

Can I owe?
Debt is always a problem. Someone who has a credit card should pay the bill in full before the due date because if you only pay the minimum amount, your debt will increases more and more.

We may take a debt if in emergency situation or to buy a productive asset. The productive assets such as property or gold bar are having good value and continue to grow.

The key of investment
The importance of investing is to ensure your financial in the future. If you invest your money, the amount and value will increase higher than inflation rate.
Then what is the key of investment? First, you should have an investment goal. Second, adjust your goal with the risk profile. Third, choose the right investment product; this is often not considered properly.

Protection
To protect yourself and your family, have you take an insurance? Life insurance should be able to replace at least 100 months of monthly expenses.

But for health insurance, if your company could cover your health costs, does it still need to take health insurance? Buy what you need, not what offered to you.


(image taken from: itsaboutthemoney.net)

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