Your very own book keeping

Hi, it is me again. Today, i decide to share with you all on how to do book keeping.This to ensure that you can manage your money better,have proper documentation for tax purposes,be able to budget for the next month, also lastly you can see how much you really earn,where you money goes to and be able to save more money.

To make it easy... You must have:

1)File - this is for you to store all your receipts, bills, statement. Separate your file into 2 which is earning/deposit/inflow and withdrawal/expenses/outflow. Sort your documents according to date.

2)A log book/cash book - Start recording your salary and expenses. It is advisable to start when you get the salary in the near future. This is because if you start on middle of simply when you want you will find that it is quite difficult to sort out. Write all your income in left side (debit) and your expenses (credit). Keep yourself discipline by writing and recording in this book. When it is end of the month. You take the income and subtract the expenses. The remaining is the leftover of your money. Make sure you separate between cash and bank account.

3) A computer software - if you think that it is much easier for you to use the computer then i would suggest you you a simple software by name Easy Cash Manager that can be downloaded from www.download.com in the Personal Finance section. I used to use this simple software. There is also a lot of other software to help you.

Hopefully you will try these 3 easy steps and have better management of your cash.

Beware if you have this signs

How do you know that you have financial problem?

1) You live from paycheck to paycheck.
2) You always think that the MONEY that you have is not enough.
3) You spend more than you earn.
4) You have debts all over and the money lender always call you.
5) You don't or can't save money at all.
6) You see more of credit card than cash.
7) You find yourself shopping when you are stress out.
8) You keep asking money (borrow) from other people.

If you have more than 1 of the criteria above try my personal budgeting.

Saving money

Saving money is actually easy to say then implement. I believe a person should have at least 3 ways to save money.

1)A long term account - This account is used to keep all your savings that you only withdraw the age of 55 year and above. To make it even better, i suggest that one should keep it in a bank that offers a high interest for example ASB (Amanah Saham Bumiputera). It would be even better if you put all your bonuses in this account. This account should only accessible with a passbook.

2)A short term account - This account is for normal transaction for example to deposit salary,withdrawal of daily expenses. One should have ATM card and also passbook. Just in case the ATM card is stuck in the ATM machine. If possible withdraw 30% of the salary each month and deposit 15% of the 30% of the saving portion.

3)Current cash - I believe that one should always have cash that is accessible for emergency. If not used that it is to be kept in an envelope and kept in a safe place. If the amount is over RM500 then you should keep it in your 1st or 2nd account.

Personal budgeting

Hey... i'm just writing this to share with you all what i knew about budgeting. You must have your salary or paycheck each month and do want to know how to manage it. Ok, if you do keep on reading.

Firstly,your goal here to have proper management and also keep track of your inflow and outflow of cash.You will be able to obtain a very systematic and proper system of book keeping and be your own accountant.

Rule 1
Assess your current financial status.
Make a reality check on how much you really earn each month and how much debt you have. Earning includes monthly salary,bonuses, and other types of inflow.Debts includes how much you owe people,bank,credit cards, financial institution,loan and other types of outflow.

Rule 2
Know your spending pattern.
Ok,do you have a regular expenses and repetitive pattern each month? List it down... This may include electricity,telephone,water,multimedia (astro or cabel tv and internet). Other living expenses include food and groceries,clothes,rent,debts,transportation (included are bus fare,loan car payment and petrol for your car. Unexpected expenses included replacement or repair/upkeep of your house and other.

Rule 3
Track all inflow and outflow
Ok, this step is easy but very difficult to implement. You have to discipline yourself. Keep all the receipts of all your purchases and record them down. You will be suprised of how much you spend on stuff. Not to forget jot down the money you receive each month too.

Rule 4
Apportion or allocate your money
Ok, try these step. Allocate your money wisely. How about categorizing it into a few categories. For example : 70% is for spending and 30% on saving the money. Then allocate it into small portion for the saving you can separate it to emergency(take this portion out if emergency happens),long term (use this money when you are old or for children university ) and short term (use this for marriage). Spending portion you can separate it according to your needs and refer to Rule 2.

Rule 5
Improvise
Change your budget or spending pattern if you need. This is because different events occurs and sometimes your income is not the same for each month.

You should be able to handle your money better in the future.