Save money for the rainy days 


The English idiom seems to have come true in the current unstable economic situation. It's true that you can go through rainy days, but you love more than sunny days. Therefore, planning for reasonable spending and preparing for the “rainy days” is certainly never superfluous.

Let's take a look at the last five years, how did you spend? How much did you save?

If you used to “swing your hand over your forehead,” you will now need to consider:
 

1/ Classification of expenditures in descending order of priority:

  • Essential expenditure: food, transportation, electricity, water, home, etc.
  • Financial expenditure: repayment of credit cards, installments, etc.
  • Personal spending: watching movies, traveling, shopping, etc.
     

And let's seriously cut off the ’nice-to-have' personal spending (it's fine to have, but it's okay not to have, for example milk tea). Limit leisure and shopping activities at this time, you will have additional cash flow to spare for immediate unrest.

In addition, if income is reduced by 20%, expenditures should also be reduced proportionally.
 

2/ Set up an emergency reserve fund – precisely to save money for “rainy days”. You can refer to a way to determine the amount required for the emergency reserve fund * as follows:
 

  • If you only have one source of income, you need a reserve fund to cover 6 months of living. For example, you are an effective FA citizen, spending about 5 million VND per month. So you're going to need 30 million in this contingency fund.
  • If you have two or more sources of income, this reserve only needs to be enough for three months of living. Imagine, you and your loved one in a state of “a cottage, two sources of income.” Each month, we spend 10 million VND on housing, shopping, drinking milk tea, and so on. You're going to need to spend at least 30 million on this fund. 
     

It's worth considering, isn't it?

3/ It's a fact that you can't stop spending, so spending now requires strategy. It's not a bad idea to make the most of promotions from retailers or payment offers from bank card services or e-wallets when shopping.

 

After a storm comes a calm. But the most important thing is that you are always in control of your finances.
If you find the above information useful, save it for practice and share it with your friends.

(*) According to the Certified Financial Planner Board of Standards