Smart Living

Managing Your Finances: A Simple Step-by-Step Guide

gini | December 21, 2018

Next to buying your first car or signing the lease to your first apartment, one of the most integral steps we all take into adulthood is the moment we take charge of managing our own finances. No matter our backgrounds, we all reach a point when it’s no longer sufficient to deposit Lai-See or birthday money into our accounts once a year, and leave the day-to-day management to our parents.

This may all seem like a big and scary step, but it’s always better if we take it sooner rather than later! We can’t soften the whole blow of becoming financially independent, but there is plenty of wisdom and information we can consult before we make any major decisions! As such, we here at gini have surveyed members of our own team and boiled the most common lessons from everybody’s financial histories into a short list of key factors that we believe everyone should consider when longing for financial stability!

 

1. Know Your Basics

There are many components to managing your own finances. A single snapshot from any given moment in your financial history can cover a broad range of areas, including but not limited to:

  • Insurance
  • Investments
  • Taxes
  • Savings
  • Retirement

The many moving parts of this puzzle can leave any individual overwhelmed. As such, many people turn to the Internet or beyond for resources and information in managing their own finances. There is a plethora of resources out in the world that you can tap into for guidance, but they can only take you so far. Financial advice, whether from a blog, a podcast, or an article, are not tailored specifically to your own situation. They can offer insight into the financial situation you face on a daily basis, but at the end of the day it’s your call. The better grasp your have on your entire financial picture, the better and more informed your decisions will be.

Of course, we’re not suggesting that everyone needs to become a financial guru overnight, but of all the categories we listed above, if your answer to any questions posed about them is “Um…” or “I don’t know”, then you probably have a bit of studying to do.

 

2. Be Active In Your Financial Life!

Being informed about your finances is one thing, but taking initiative to control and manage it on a daily basis is another! Whether it’s setting up a budget or tracking your daily expenses, building your system on top of designing or thinking about it is key to ensuring you are on top of your own finances!

As we mentioned above, be sure to tailor your system to your specifications! Whereas one person may need to set aside a significant portion of funds for emergencies, another person may want to divert more funds towards investments. Whatever your needs are, make sure they are based off of your own understanding of your own financial picture!

3. Know Your Limits!

This principle doesn’t just apply towards knowing how much you can afford to spend versus your income. When it comes to your finances, the most important thing you can manager may very well be yourself! Be brutally honest about your own financial behaviour; what you’re good at, what you’re bad at, and what steps you can take to improve.

For example, if you know that you want to keep your finances as simple and clean as possible, overextending yourself and adding lots of moving parts to your portfolio can be an inadvisable move. If you know you can manage your finances properly when using cash, but lose some of that control whenever you use a credit card, take steps to limit or change that behaviour!

4. If All Fails, Don’t Be Afraid To Ask For Help!

At the end of the day, even if you have taken every step to prepare yourself, managing your finances could still prove to be a difficult, even insurmountable task for you to tackle. You may be too close to the situation to be able to judge and view your finances through a rational, unbiased lens. Alternatively, you could be capable of managing your day-to-day finances, but require help in identifying and planning for long-term goals.

In these cases, it may not be a bad idea to look for additional help. Whether it comes in the form of a financial advisor, or using an app to help track and organise your personal financial management, apply the same logic here as you would when it comes to customising the particulars of your own financial system. Take the time to consider the options and the best fit for yourself!

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