How to Save And Manage Your Money | 3 Step Guide

We write our articles to improve our lives of our readers. We found that most of the people have a poor connection with money or bad mentality regarding. So, if you don’t know rules of managing and saving money which will make you wealthy in future then it is a problem.

You will not have any money to improve your style or yourself. Therefore, we decide to conduct our research and write this article on “How to save and manage your money“ This is article is going to change your mental and psychology regarding money completely.

There are Guide on How to Save and Manage Your Money.

Save and Manage Your Money

Kakeibo is a Japanese word, and it refers to household financial ledger. In this article, we are going to start with basic budgeting to dividing your in way that you have to pay fewer taxes and you can become wealthy overtime by practicing it.

As you know, Kakeibo is a household financial ledger that Japanese people used to do their daily budgeting. I am recommending it because by engaging with it, you will develop a habit and you feel you are doing something you’re for yourself and for managing your money.

You can buy a Kakeibo from amazon or you can create it by watching YouTube videos. Let me help you. Get any notebook or journal and then follow this YouTube video to converting it into Kakeibo format.

Now, you have your Kakeibo to manage and note down expenses, needs, spending, and monthly total budget.

First, Have your Goals.

If you didn’t have your goals, then getting lost is very easy and you might save less than you can actually do.

So ask yourself there 2 questions:

  1. How much you want to save? (Your Goal Yearly)
  2. How much you need to save to achieve that goal? (Monthly Saving which will add up to become your goal)

For example: If your goal is saving 10,000 a year. Then you need to save 833.33, which can be 835 per month to achieve that goal.

Start Your Month by asking yourself these questions and noting down in your Kakeibo:

  1. How much do you have available?
  2. How much would you like to save?
  3. How much are you spending?
  4. How can you improve?

When you will have some days of data in your Kakeibo, then it will be very easy to answer these questions. These are further going to help you in providing you with clear direction for achieving your goal.

Second, End Of The Month.

Now, you have your kakeibo and you know what to do with it for the entire month. Let’s find out what you need to do when you the month is over.

You need to ask these questions and note them down and answer them:

  1. Did you meet your savings target this month?
  2. What ways did you find to save money?
  3. Which areas did you spend much on?
  4. What will you change next month?

These questions are further going to clear everything for you. These questions are also going to make sure you improve or find some news ways to increase your savings more and find which things are on which you were spending unnecessarily.

The thing I like love about japan is their culture of living a simple life but intelligently and happily. Most of them only spend on things which are necessary to them and they avoid spending on stuff which is not useful or valuable to them.

Money Management Rule.

Well, this is where you are going to become wealthy overtime. This is the easiest method or process of becoming wealthy, and financially free. If you are a salaried person, then this is different for you, and if you are self employed, then this is different for you.

If you are salary person, and you earn less money, than you need to divide your money like this 50-35-15. 50% of your income get spend on your need based expenses which are rent, food, clothes (Not branded or expensive), school fees or transportation, electricity, and gas bill.

Sometimes, over 50% of income spend on need based expenses can happen, if you are earning less, but try to make it 50%, or try to increase your income.

Divide 35% of your income into two parts and put one into savings and other in index funds. For the left over 15% of your income, you can spend it on want based expenses such as things you want to buy, but I suggest save and put that money into index or bonds. If you want to become wealthy early or until you make more money.

Now, as your income increases or you are someone who makes more money. You can follow this rule 35-50-15. You can spend 35% of your money on need based and If you earn more and You are still spending over 35-40% of your income of need based, then it could mean you are taking care of a lots people who don’t work or not in the condition of working like students.

It can also mean that you are eating expensive food, spending more on rent than you need, or buying more clothes than you need. Now, divide that 50% into according to your needs. If you are saving for your child’s education, you are putting your money in bonds, or index bonds. This is where you need to do little study and find what combination you actually need.

Now, the above rule can apply to both salaried or self-employed person, but self-employed person can take his money into a company based account which is for his company save more taxes.

There are a lot of ways to save taxes, such as by filing rent rebate, PPF, Bharat Bonds, investing for long term in index funds or stocks, house loans and many more. You can get a rebate on these and get a deduction for taxes, but you have to study about it.

Most important.

Now, no matter who they consistently put you, invest some portions of your money in real estate or index funds. If you have knowledge and you know how to read financial statements and analysis company, then you can invest in individual stock as well, but first read about fundamentals of investing. First you learned about budgeting and saving, then you learned about managing your money and saving taxes and In this last you learned to become wealthy.

Which is investing in real estate or stock market (index funds, individual stocks only after you know how to study and analyze right one).