Do you feel that you are so overwhelmed with the world of personal finance? Do you think that retirement is still soooooo many years ahead of you? I feel the same when I just started out as a beginner. Here are the top 3 things to keep your finances in check. They might look simple, but they contribute to 90% of your finances.

What gets tracked, gets results. Being a person that is good and obsessive with data and numbers, I love to track my finances. From daily tracking of my expenses to allocating my income. I have a video on how to allocate your finances here.

By reviewing your finances regularly, you get to understand your money inflows and outflows. If you noticed your outflows increasing, you can have timely action in lowering your expenses the following month. Also, if you noticed your outflows decreasing, you are able to allocate them into investments. This way, all your money is put into good use and none is left idling around.

Having an annual review is the minimum, but I suggest doing it monthly. You might think it’s a hassle doing it monthly. It’s actually quite simple and you can finish reviewing it in 10 minutes if you actively track your expenditure throughout the month. I use a simple expense tracking app where I record how much money was spent immediately after I paid. At the end of the month when I’m reviewing my finance, I will simply transfer these numbers into my excel and it will tell me how am I doing. I have a free simple template, you can download it here.

Do you think that finance consists only of their money in their bank and retirement accounts? Having comprehensive insurance coverage is very important. Insurance is a hedge against illnesses, especially those that cost a bomb. Without insurance, any serious illnesses will set you many years back in life. Other than the loss of income during your treatment and recovery phase, you have to fork out money to pay for your necessities.

Some people suggest saving on insurance by investing directly in the stock market or the S&P500 index to compound their money. While mathematics works out in the long run, this method failed to consider what will happen if you get a serious illness within a few years of starting this comparison. If you get insurance, you will get a way massive payout (depending on your policy) compared to the gains you receive from your investment in the S&P500 index. Most of the time, the gains you receive will be way lesser than the lump sum payout from your insurance policy.

Of course, it will be good if you do not have any serious illness that makes you utilize your insurance policy. Hence, this is a good hedge against such scenarios that depletes your finances.

Do you still remember the goals you set for yourself at the start of this year? Are you still on track? Or have you forgotten about them? Many people have big goals. Yes, it is important to aim big, but it must also be actionable. By breaking down your big goals into smaller actionable goals, it will be easier for you to keep track and follow your plan. Having big goals can be overwhelming to many people.

For example, if your goal is to complete your Chartered Financial Analyst (CFA) qualification, set a timeline and cater for failures. You can set a timeline of 4 years, catering for surprising events that happen along the way. Within these 4 years, you can take 1 paper every year. Within the year, study for 1 hour every weekday and 5 hours every weekend. Plan out what you want to study for each session. By having these specific goals and plans, you do not need to spend time thinking about what should you study or do on any day.

This is the same for your finances. If you plan to retire by 40, what should you do every year, every month, and every day for you to reach that goal?

Let me know what you plan to do and what resonates with you the most.

Click here if you want to learn more about personal finance.

Subscribe and follow to receive more content like this in the future.

Do you feel that you are so overwhelmed with the world of personal finance? Do you think that retirement is still soooooo many years ahead of you? I feel the same when I just started out as a beginner. Here are the top 3 things to keep your finances in check. They might look simple, but they contribute to 90% of your finances.

What gets tracked, gets results. Being a person that is good and obsessive with data and numbers, I love to track my finances. From daily tracking of my expenses to allocating my income. I have a video on how to allocate your finances here.

By reviewing your finances regularly, you get to understand your money inflows and outflows. If you noticed your outflows increasing, you can have timely action in lowering your expenses the following month. Also, if you noticed your outflows decreasing, you are able to allocate them into investments. This way, all your money is put into good use and none is left idling around.

Having an annual review is the minimum, but I suggest doing it monthly. You might think it’s a hassle doing it monthly. It’s actually quite simple and you can finish reviewing it in 10 minutes if you actively track your expenditure throughout the month. I use a simple expense tracking app where I record how much money was spent immediately after I paid. At the end of the month when I’m reviewing my finance, I will simply transfer these numbers into my excel and it will tell me how am I doing. I have a free simple template, you can download it here.

Do you think that finance consists only of their money in their bank and retirement accounts? Having comprehensive insurance coverage is very important. Insurance is a hedge against illnesses, especially those that cost a bomb. Without insurance, any serious illnesses will set you many years back in life. Other than the loss of income during your treatment and recovery phase, you have to fork out money to pay for your necessities.

Some people suggest saving on insurance by investing directly in the stock market or the S&P500 index to compound their money. While mathematics works out in the long run, this method failed to consider what will happen if you get a serious illness within a few years of starting this comparison. If you get insurance, you will get a way massive payout (depending on your policy) compared to the gains you receive from your investment in the S&P500 index. Most of the time, the gains you receive will be way lesser than the lump sum payout from your insurance policy.

Of course, it will be good if you do not have any serious illness that makes you utilize your insurance policy. Hence, this is a good hedge against such scenarios that depletes your finances.

Do you still remember the goals you set for yourself at the start of this year? Are you still on track? Or have you forgotten about them? Many people have big goals. Yes, it is important to aim big, but it must also be actionable. By breaking down your big goals into smaller actionable goals, it will be easier for you to keep track and follow your plan. Having big goals can be overwhelming to many people.

For example, if your goal is to complete your Chartered Financial Analyst (CFA) qualification, set a timeline and cater for failures. You can set a timeline of 4 years, catering for surprising events that happen along the way. Within these 4 years, you can take 1 paper every year. Within the year, study for 1 hour every weekday and 5 hours every weekend. Plan out what you want to study for each session. By having these specific goals and plans, you do not need to spend time thinking about what should you study or do on any day.

This is the same for your finances. If you plan to retire by 40, what should you do every year, every month, and every day for you to reach that goal?

Let me know what you plan to do and what resonates with you the most.

Click here if you want to learn more about personal finance.

Subscribe and follow to receive more content like this in the future.