Amid the uncertain situation, our financial condition must be well-maintained. But, do not worry too much, there are many things we can do to survive this uncertain situation. One of them is to build more stable finance.
But, how? Check this out.
Manage debts
If you take credit, manage your debts by ensuring a healthy debt ratio, namely ⅓ or 30% of your income. With this ratio, the rest of your income can be used to fulfill your daily needs, invest, and save.
Save money
You must also save money and control your expenses. Differentiate between needs and wants, so your money can be used for your life needs. You can also save your routine expenses, such as electricity costs, water, and fuels, or reduce eating out.
Prepare emergency funds
You can use your emergency funds during uncertain conditions and you need money to fulfill your daily needs. Everyone should have an emergency fund at a minimum of 3 times their monthly expenses. Even an emergency fund can be 12 times your monthly expenses. Here, you must be committed to using your emergency fund only for emergencies.
Saving or investing according to your financial plan
Make it a habit to save or invest every month. The amount of savings or investment can be adjusted to your monthly expenses. If you can only save 5-10% of your daily income, then it’s good. Along with better finance and the habit to save or invest, you can increase the amount gradually.
Those are 4 things you can do to build stable finance. Start by managing your finances, discipline, and plan for the future. You can do it!
Source: smart-money.co