Live My Life Online

Until I learned from Rich Dad how to manage my money in broad picture, and with the aid of PDA software, I hardly know where my money spent! I believe most of us here might have the same problem as me! Over time, I have developed some methods or ways on how to manage my money, which I find it very useful and effective.

1. Keep records

That what I do every days and every months, to keep track of my daily expenses, and my credit card payments.

2. Put up a budget

Once you decided what is your annual savings target, it is always advisable to draw up a budget plan, to identify where is your source of income and expenses, and to revise accordingly to meet your annual target. The target also go hand in hand with monthly expenses records to keep you inform your position, whether you are within budget or over-spent.

3. Categorize our expenses

If you analyze your expenses in detail enough, it is always important to identify these three type of expenses.

• Committed - those are expenses which are recurring every month and is unavoidable, such as insurance payment, monthly home loan installment etc

• Discretionary -these are expenses almost like the above, but we have the control over it, such as telephone bills, electricity bills. We can cut down the spending on this type of expenses,

• Optional - These are expenses is not compulsory, can only spend if we have extra money. Expenses such as shopping, holidays.

Likewise, these classification must work hand in hand with budget and record tracking in order to be more effective.

4. Create multiple “Money Jar”

In T Harv Eker’s book ‘The Secret of the Millionaire Mind’, there is this concept of keeping your money in “jars” or accounts. It’s an easy to apply money management system.

• Financial Freedom Fund – 10%
• Long Term Savings – 10%
• Education Fund – 10%
• Play Fund – 10%
• Give Fund – 5%
• Necessity Fund – 55%

The way it works is every time you receive a pay check, you divide it up into these 6 money accounts.
The goal of these money jars (or online bank accounts) is to make sure we spend within our mean.

5. Ask Questions

Like what Edith Yeung said, always ask if you are not sure, it will not cost you a single cents and most of the people are more than willing to assist you too.

6. Update knowledge

Continuous learning is one of the key factor to self improvement, so spend some time to learn some of the financial terms and jargons. This will help when you deal with Accountant, Bankers or stock brokers.

7. KISS (Keep it Simple, Stupid)

I always keep only one credit card, and practically pay every by credit card and bank direct debit. As I am always lazy to record my expenses on timely manner, it is therefore difficult for me to track when I spent my cash (even I have this PDA with me). So with one credit card (easy to manage) and pay through credit card and bank account will provide me all the transactions in the monthly statement. That’s simple?

Take control over your money. Don’t let money run loose like kids without any parental supervision, and you will in fact find it fun once you master all these. In fact, this is like a score game for me!

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