Tips on How to Manage Finances Small Salary is Still Sufficient
Many people often feel that their lives are lacking, even though they work hard every day. The salary arrived on a young date, but only in the middle of the month was there nothing left. Finally, you are forced to dig a hole and cover the hole with debt or online loans. The question is, is it true that the problem is low salaries? Or is it the way we manage money?
According to the National Endowment for Financial Education (NEFE), more than 60% of people who get a salary increase still feel deprived. This means that the problem is not just about the amount, but how we manage the flow of money. There are people with mediocre salaries but can still save, even invest. There are also those whose salaries are large, but they always run out without a trace. The difference is in mindset and financial habits.
So, here are 7 simple ways you can do so that your small salary still feels sufficient.
1. Record All Expenses
Most financial leaks occur because we are not aware of where the money goes. Start with something simple: record all daily expenses. For example, a coffee snack of IDR 15 thousand, parking IDR 5 thousand, or buying snacks IDR 10 thousand. It seems small at first glance, but if you multiply it a month it could be hundreds of thousands.
With notes, you will better understand your spending patterns. From there, you can determine which ones should be reduced and which ones must be maintained. Remember, money that is not recorded usually just evaporates.
2. Implement the 50/30/20 System
One popular way of managing finances is to divide salaries into three categories:
- 50% for basic needs (food, transportation, rent, electricity).
- 30% for desires (entertainment, traveling, hanging out).
- 20% for savings, investments, or emergency funds.
If your salary is small, this proportion can be adjusted, for example 70% basic needs, 20% savings, 10% entertainment. The important thing is not to completely delete your savings or emergency fund. No matter how small, saving must be a priority.
3. Differentiate between needs and desires
This is one of the biggest traps. Many people feel like they "need" it, even though they actually just "want it". For example, you need a cellphone for work, but instead buy the latest expensive cellphone even though the old cellphone is still functional.
Learn to postpone desires. If you really just want to, give it a few days before buying. Usually after waiting, the feeling of wanting goes away on its own. People who are good at distinguishing between needs and wants are less likely to get caught up in a consumerist lifestyle.
4. Avoid consumer installments
Installments are a subtle trap that often makes a small salary feel even tighter. Buying goods in installments may seem easy, but if the goods are not productive, the installments will actually tie you to the wrong lifestyle.
If you want to take out debt or pay in installments, make sure it is for important needs or something that can make money. For example, installments for a laptop for work, or a vehicle that is actually used to earn a living. Avoid paying off luxury goods just for the sake of prestige.
5. Create an Emergency Fund
Many people fall into poverty not because of low salaries, but because they are not prepared to face emergency situations. When someone in their family gets sick, their motorbike breaks down, or they lose their job, they don't have savings, so they are forced to go into debt.
Emergency funds can be started small, for example IDR 100 thousand per month. Over time it will collect. The aim is not to use it every month, but only for urgent needs so you don't have to borrow money at high interest.
6. Look for Additional Income
If you have saved money but your salary is still not enough, it means it's time to increase your income. Don't just depend on one source of income. Many people who initially only work on the side can eventually build a business from there.
You can freelance, sell online, or use the skills you have. Today's digital world provides many opportunities. The important thing is, don't fall into the mindset of "small salary = not being able to save". Sometimes the solution is not only to save money, but also to increase your income.
7. Discipline and Consistency
Managing finances is not a matter of theory, but a matter of habit. Often people are enthusiastic at the start, then return to being wasteful in the middle of the road. In fact, the main key to money management is discipline.
Whatever your salary, if you consistently record, set aside and manage it every month, the results will be felt in the long term. A little discipline today could translate into financial freedom in the future.
A small salary doesn't mean you have to live barely forever. With the right management pattern, you can be calmer, better prepared to face emergencies, and even still be able to save. Don't wait for a big salary to learn to manage money. In fact, when your salary is small, you can train yourself to be wiser in managing it.
In the end, it's not how much money you earn that makes you rich, but how you manage it.