Don’t have enough money? Every time you run out of money before the end of the month? That’s because you don’t manage your money well! If you live your life in this way, even if you are paid RM10,000 a month, you will still not be able to make ends meet. Therefore, it is recommended that when you receive a salary, the salary is divided into 3 parts, that is, the 532 distribution method.
The so-called 532 income distribution method is to divide your salary into 50%, 30% and 20%. 50% for living expenses, 30% for savings and investments, and 20% for self-education and entertainment. Before you start to implement this income distribution method, you need to prepare 3 to 6 months of emergency reserve, which is to allow you to use in case of emergency.
Then, the first thing you do when you get your monthly salary is to put 30% of your salary into a bank account for savings and investment purposes. Each month you will see the money in your savings and investment account grow, which will give you more incentive to move forward.
Once you have saved 30% of your salary for savings and investment purposes, you will need to use 50% of your salary to pay for your living expenses such as rent, utilities, phone bills, etc. This 50% of your salary also covers your daily meals. If you can, you can choose to keep a record of each expense so you know what you are spending your money on.
The remaining 20% of your salary is for self-improvement and entertainment purposes. You can use this 20% to buy books, watch movies, travel, etc.
Of course, you should always think twice about buying anything. Apple phones are good, but is an Apple phone what you really need? Although the cheap Android phones can be laggy at times, but bear with it and it will pass.
In addition, the Toyota VIOS is beautiful, but it bleeds your wallet every month, is it really worth it? The most basic purpose of a car is to get around, not to show off. Young people can start by choosing cheap domestic cars to live with less burden every month and save their money to let it increase in value.
Finally, I hope you can remember the formula “income – savings = spending”, which means that you must save first when you receive a paycheck, and then use the rest of your salary to spend, and live within your means.
