0 1. According to the actual situation, distribute the income in proportion.
We get paid in two ways every month: saving or spending.
But the reality is that it is difficult for us to save all our salary income.
Because we must have expenses to survive, these expenses are "necessary expenses", such as rent, water and electricity, coal and meals.
Therefore, we should distribute the income in proportion and classify the expenses in proportion according to our specific actual situation.
Proportional distribution of income can follow the "63 1 principle".
That is, 60% of the income is used as the necessary living expenses.
30% as other expenses, which can be entertainment, self-improvement and other expenses,
The remaining 10% is used as the emergency reserve for compulsory savings.
After deducting the necessary expenses from the monthly income, we can flexibly control the remaining money, which is about 30%-40%.
Even if you want to save more money and reduce the necessary living expenses,
After a long time, your plan will be broken again and again, and eventually you will give up the whole financial planning.
Because unreasonable distribution ratio will discourage people, the sustainable distribution ratio of savings income must be tailored according to your actual situation!
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The picture amount is NT$, and the exchange rate is about 1: 5.
For example, Kobayashi's ideal monthly income is NT$ 3.5W, and he wants to save NT$ 3, and his living expenses are NT$ 5K. If you are a student, you can barely recite it.
But for the wage earners who have left society, it is simply impossible.
Because in addition to living expenses, there are also expenses such as rent, water and electricity, sending money home, and loan social security. In the end, I can only save NT$ 9.
You may think, "Why do you save less after adjusting your income distribution?" From the original deposit of NT$ 3 per month to NT$ 9 per month now, there is a total loss of NT$ 2.1w..
Although the efficiency of saving money every month is reduced, the actual expenses still have to be paid. If you still spend only NT$ 5 a month on living expenses, it is estimated that you have to eat steamed bread every day to survive.
Therefore, we should allocate our income in proportion according to our own specific actual situation, so as to continue effectively.
Moreover, a reasonable income distribution is to control one's own consumption and find a balance between saving money and quality of life, rather than tightening one's belt.
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02. Follow the consumption pyramid and classify expenses by category.
After we receive the income every month, we should also classify the expenses in all aspects of our lives reasonably.
Because wage earners basically only get paid once a month, it is necessary to classify expenses reasonably to avoid the rhythm of spending money lavishly at the beginning of the month and eating soil at the end of the month.
As for the cost of living, let's first understand a "consumption pyramid" model.
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Consumption pyramid model,
The key is to "spend on what you really need first, and then buy what you want."
Our monthly expenditure can be roughly divided into "fixed expenditure" and "variable expenditure".
"Fixed expenses" are those expenses that we have to pay every month whether you have money or not, such as rent, water, electricity, coal, meals, mortgage and so on.
This part of "fixed expenditure" will be directly divided into major items when we classify it, that is, money separated from other expenditures.
"Variable expenses" are other expenses in daily life, such as shopping, reading and further education courses.
How much this part of "variable expenditure" costs depends entirely on your own adjustment.
If there are large expenses this month, such as planning a trip or buying a laptop, we should first eliminate these expenses, and then we can spend the rest freely.
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Following the example of Kobayashi mentioned above, the living expenses are divided into NT$1w.
From what I have just said, we will find that consumption must be spent on survival first, and the remaining quota can meet other needs.
According to the consumption pyramid, expenditure is classified by category, which enables us to strike a balance between "fixed expenditure" and "variable expenditure" and between demand and hope.
The monthly consumption quota should maintain a dynamic balance.
03. Control of unknown risks
Because wage earners basically only get paid once a month, and we have to spend "fixed expenses" every month.
If you spend all your living expenses at the beginning of the month, you must scrimp and save until next month's payday or borrow money to spend the rest of the month.
Now the global environment is depressed, the company cuts salaries and layoffs, suddenly falls ill, and accidents happen from time to time.
If you are a person with no habit of saving money, your monthly income is spent on consumption.
Even if there is any urgent need for money one day, no matter how high your salary is, you will have no money on payday, and you still have no money to pay at present.
In order to cope with and solve this unknown risk in the future, an "emergency reserve fund" must be deposited in advance.
Every month, 10% of the income is used as an "emergency reserve fund" for compulsory savings.
The biggest purpose of saving money is not to spend more money on shopping, but to reduce those unknown risks in the future.
"Emergency reserve fund" is the money you can use to turn around when you suddenly need money!
So that your life can be free from money,
And the money is at least 3-6 months' living expenses, so we resolutely don't use it to spend.
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04. Let money add value to you.
First, do the above three steps, lay a good foundation, do a good job of protection, and finally come to the part of currency appreciation.
The fastest way to make money by yourself is to invest!
However, it should be noted that the money we invest can only take away 30% of our income, not more than 50% of our income at most, and it is spare money that will not be used in the short term.
More than 50%, the risk is great, improper operation, is likely to be quilt cover or loss.
Investment behavior is not the mentality that we can't gamble through hearsay, but a method to stabilize income and test our vision and mentality.
Risk management and control is an important topic in investment, financial management and life planning, and risk should be taken as the primary point to follow.
Because you never know whether it is an accident or the salary will come first next month, you should always control the investment ratio first and leave yourself a way out.
No matter how high the rate of return is, you can't put all Stud into it. You have to keep the bullet so that the follow-up income can last.
Some students also asked, "When the income increases or there is a year-end bonus at the end of the year, how should it be distributed? 」
When our length of service increases, our wage income will also increase, and our income will still be distributed according to the original "63 1 principle".
With the increase of income, many people will want to spend more money on shopping, so even if the income increases, it will not increase their wealth.
We should try not to increase expenditure, but to increase investment in self-growth and save money for investment.
You can spend more money on improving your ability, such as sideline work or professional skills.
These abilities can make you move forward to a better place, and investing in your own brain is always the best choice.
It is king to change the inherent thinking of exchanging time for money and focus more on improving personal growth.