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How to Manage Your Money?

Updated on April 7, 2012

Personal Finance - How to Manage Your $$$ In 5 Simple Ways

If you are in a lot of debts,

If you have trouble saving money every month,

If you wish to be richer,

Well then, this lens is created perfectly for you to sort out your finance!

Follow these simple steps and your finance will be in tip top condition in no time! Read on.

Monthly Financial Plan
Monthly Financial Plan

Step 1

Plan Your Budget!

Basically, everybody should have a lifelong financial plan that goes like this: Make Money, Save Money and Grow Money.

To accomplish this, you need to have a long-term plan, a medium-term plan or a short-term plan which continue throughout your life to reach the ultimate lifelong financial goal.

So, when you receive your paycheck at the end of the month (or the beginning), start planning how you are going to spend that money! You should plan your budget something like the picture shown. (Click on the picture for larger view)

In my own words, your money should be allocated for the 3 main categories, which are:

1. Necessities (about 50%)

2. Desires (about 30%)

3. Extras (about 20%)

We shall talk about what to do with these extras in the following steps.

He who fails to plan is planning to fail.

Are You Struggling With Debt?
Are You Struggling With Debt?

Step 2

Pay Off Your Debts!

So what are you going to do with the 20% extras of the monthly budget?

First and foremost, use that money to clear out your debt! As the saying goes, paying off the debts is the best investment!

It is indeed very true because credit card balance (one example of debt) will charge up to an interest of 10-25%, depending on where you are. Hence, the 10-25% you pay off is actually 10-25% earned!

Therefore, before you start thinking about saving or investing, you'd better pay off the debts first!

Paying off one's debts is the best investment!

Start Saving!
Start Saving!

Step 3

Start Saving!

Once you've paid off your debts, you can start thinking about saving. But why should I save?

First, you would need to build about one third of your income and save it into your regular savings account. This is known as the Buffer Fund. It serves as your monthly cushion in case you overspend.

Next, you would need to build the Emergency Fund, which is about 3 months to 6 months worth of your salary. As the name suggests, this is to prepare you for rainy days.

Once you've built these two funds, then you're ready for Investment!

Build Your Buffer & Emergency Fund!

Buffer Fund is about 1/3 of your salary while the Emergency Fund is about 3-6 month worth of your salary

Being a cashier is one example of side income
Being a cashier is one example of side income

Step 4

Increase Your Income!

If you have troubles executing step 2 and step 3, which is to pay off debts and save money (even after you have budget your money), then you might need to look for ways to increase your income.

There are mainly two ways to increase your income, which are through side income and/or passive income. Basically, side income is taking up a second job while passive income helps you earn money even if you're not working.

Check out these websites below to find out more about how to take up side income and passive income!

Invest to Grow Your Money!
Invest to Grow Your Money!

Step 5


Now we've come to the last step where you grow your money. Once you have paid off your debts and built your buffer fund and emergency fund, then you're ready for investments!

There are many instruments of investment but basically let me introduce you to these major types:

1. Stock or Shares

2. Bond

3. Mutual Fund or Unit Trust

4. Property or Real Estate

5. And many other derivatives...

To learn more about investment, check out these great tutorials by Investopedia at

VIDEO - Personal Finance -'s Three Principles of Personal Finance

Books On Personal Finance - Buy @ Amazon

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And don't forget to Like it if you've enjoyed it! ;) Thanks!

What's In Your Mind? - Have Your Say Here!

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    • profile image


      6 years ago

      Thank you, Bryan for a very helpful lens.

    • BryanLSC profile imageAUTHOR


      6 years ago

      @ratetea: The availability of good public transport plays a major role in reducing the people's financial burden. Just look at Singapore, one barely need a personal vehicle as their public transport is fast, punctual and very convenient! Sadly, I live in Malaysia and not in the capital - KL, so no good public transport for me! sobs...

    • profile image


      6 years ago

      People in America often overlook ways to reduce one's expenditures. One major way to save money is to live without a car. I've lived without a car throughout college, and later (after selling my first car) for a year. Now I own a car, but the money I saved with those years without a car has added up. If I had had a car from when I was 18 (or earlier as some people do) I would not have saved as much money as I have, and I would not have all the security and options available to me that I do today.


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