Effective personal financial management: 8 principles to know

Personal financial management is the process of planning, organizing, controlling and evaluating the use of each individual's financial resources. Personal financial management helps you optimize spending, minimize financial pressure and be more proactive in any unexpected cases such as unemployment, illness or economic fluctuations. In addition, financial management also helps you increase your assets through reasonable savings and investments, thereby aiming for big goals such as buying a house, buying a car or retiring comfortably.

Specifically on the principles of effective personal financial management:

1. Principles of personal financial management

Applying the principles below will help you control your cash flow and build a solid financial foundation:

1.1. Evaluate personal financial situation and review regular spending

Regularly evaluating your financial situation helps you clearly identify unreasonable expenses, thereby optimizing your monthly budget. To evaluate your personal finances, you should:

• Prepare a detailed statement of weekly and monthly income and expenses...
• Classify spending into groups: essential spending, non-essential spending, savings...
• Use personal finance management apps or Excel spreadsheets to track and analyze data.
• Periodically evaluate financial situation (monthly, quarterly) to monitor progress and adjust plans if necessary.

1.2. Develop clear personal financial goals and plans

Clear financial goals help you have specific direction in spending, saving, investing and staying motivated to achieve those financial goals. Steps to building personal financial goals and plans:

• Determine short-term and long-term financial goals
• Set a specific time to achieve each goal.
• Create a detailed plan for how you will save and invest to achieve your goals.

1.3. List necessary spending categories

Categorizing your spending helps you determine which expenses are mandatory and which expenses can be cut or adjusted, thereby saving more for your financial goals.

Divide your spending into 3 main groups: essential needs (eating, living, transportation...), personal needs (entertainment, shopping...) and savings/investment. At the same time, you should prioritize spending on essential needs and important financial goals before spending on unnecessary items.

1.4. Increase income from many sources

When you have more income, it will be easier for you to achieve your financial goals more quickly. You can look for part-time jobs, freelance jobs or small businesses such as selling online, selling handmade products or providing services according to market needs. In addition, you can invest in profitable channels (eg stocks, real estate, savings). However, don't forget to develop professional skills to increase your chances of advancement and income in your main job.

1.5. Build savings habits and create a reserve fund

A reserve fund is a "shield" that protects you in emergency situations such as job loss, illness or unexpected incidents without having to borrow or fall into a difficult financial situation. 

You should set a specific savings goal (for example, save 10 - 20% of your monthly income) and open a separate savings account, automatically deducting a portion of your salary into your savings account each month. In addition, you should also build a reserve fund enough to cover 3-6 months of living expenses.

1.6. Limit debt

Taking on debt can affect your ability to save and invest in the future. Therefore, it is best to only borrow when you really need it and have the ability to repay it. At the same time, prioritize loans with low interest rates and reasonable repayment periods, avoid consumer loans for unnecessary purposes. You also need to plan and pay off debt as soon as possible.

1.7. Financial investment suitable to personal capacity

Investing helps your assets generate profits, providing long-term passive income and supporting you in achieving big goals such as buying a house, buying a car, and retiring. However, you need to invest carefully and understand the level of risk when investing.

So how to invest effectively? You should:

• Learn carefully about investment channels before deciding.
• Assess your financial capacity and risk tolerance level.
• Start investing with small amounts and diversify your portfolio to limit risks and impact on current finances.
• Seek advice from financial professionals if needed.

1.8. Be patient, flexible, follow the set plan

Patience and flexibility help you maintain long-term financial stability, despite life's changes. Follow the spending and savings plan you have set. If there are changes, be flexible in adjusting your plan but still maintain your original financial goals.

2. Some useful personal finance management tips

Besides applying the above principles, you can refer to the following tips for controlling personal finances intelligently and effectively:

2.1. Use tools to support personal financial management

Using support tools helps you track and manage your finances more scientifically and easily. There are many options for you such as:

• Traditional notebook: Allows detailed cash flow tracking, but difficulty in statistics and summarizing.
• Excel spreadsheet: Allows you to create detailed expense tracking tables, create analytical charts and calculate financial indicators
• Personal financial management application: Mobile applications such as Money Lover, MISA Money or the bank's Mobile Banking application also provide many useful features such as automatically classifying spending, bill payment reminders, budgeting, financial reporting... 

2.2. List your financial goals in as much detail as possible

Clearly defining financial goals, both short-term and long-term, will help you have motivation and clear direction in financial management.

• Short-term goals: Goals that can be achieved within 1 year such as traveling, shopping for personal items, participating in short-term courses...
• Long-term goal: These are bigger goals that require time and long-term savings/investment plans such as: paying off debt to buy a house/car, saving for children's college education, a comfortable retirement... 

2.3. Take advantage of all offers and discounts

One of the effective ways to save money is to take advantage of incentives and promotions when shopping or paying bills:

• Check and apply discount code, if any, before paying the bill
• Register for service packages or choose financial solutions (credit cards...) with many incentives or refund policies, accumulate points to use in spending

2.4. Tips for saving living expenses

Small changes in your daily routine can also help you save a significant amount of money:

• Stay with relatives and friends to split electricity, water, and wifi bills
• Use public transportation like buses instead of booking Grab or taking a taxi if you don't have personal transportation
• Cook for yourself instead of eating out regularly
• Limit shopping for unnecessary items

2.5. Choose the right form of loan and repayment

Borrowing can help you achieve your financial goals quickly, but you also need to choose the right form of loan.

• Installment loan: Fixed interest rate and clear term, suitable for large loans such as buying a house or car, helping to split payments.
• Unsecured loan: The procedure is simple, no collateral is needed, but the interest rate is often higher than a mortgage loan. You need to consider carefully before deciding to borrow and ensure your ability to repay on time.

2.6. Use an effective set of financial and spending management rules

Applying sound financial rules will help you maintain balanced and reasonable spending. You can refer to some of the following sets of financial and spending management rules:

• 50/30/20 Rule: 50% of income is used for essential needs (such as rent, fixed daily expenses), 30% for personal expenses, and 20% for savings or investments.
• Rule of 6 jars: Divide income into 6 parts corresponding to 6 jars with different spending purposes included,= necessities, long-term savings, education, enjoyment, charity and self due to finances.

3. Effective personal financial management utility from SeABank

Personal financial management is no longer a worry when you have the companion of SeABank. With the goal of becoming the most popular bank, SeABank constantly strives to bring optimal financial solutions, supporting customers to manage personal finances effectively and conveniently as follows:

Flexible savings account

SeABank Provides diverse savings packages to suit each customer's needs such as:

• Save stairs
• Savings and contributions Nurturing dreams
• Savings and contributions Building the future
• Savings pay interest monthly
• Savings receive interest at the end of the period
• Smart non-term savings
• Online savings without term
• Term deposits calculate interest at the end of the term

QManage personal finances effectively withSeAMobile application:

SeAMobile is not only a regular mobile banking application, but also a powerful assistant in personal financial management:

• Account management such as tracking balances, transaction history of all your SeABank accounts.
• Track spending thanks to the automatic classification and spending statistics feature by category, helping you identify unreasonable expenses.
• Set specific savings goals and help track progress.
• Suggestions for reasonable financial allocation based on your spending habits, 

Investment products

SeABank provides a variety of investment products at different levels Low risk and stable profit:

• Bond investment: Safe choice with stable profits.
• Investing in fund certificates: Opportunity to access the stock market easily and diversely.
• Other investment products: SeABank continuously updates new investment products to meet market needs.

In particular, SeABank's team of experienced financial experts is always ready to support and advise on personalized investment strategies, helping you make smart and effective investment decisions.

Flexible loan support

SeABank offers many Consumer loan packages with preferential interest rates for individuals or families:

• Loans to buy, build, and repair houses - SeAHome
• Consumer loans are available TSBD - SeAFlex
• Car loan - SeACar
• Loans for individuals and businesses - SeAPRO
• Loans for Teachers, Civil Servants, and Public Employees
• Overdraft loans without collateral
• Loans to the Women's Union
• Installment loans

The loan application approval process at SeABank is done quickly and transparently, helping you access capital easily and quickly to solve personal financial problems or realize future plans.

Contact the hotline immediately or go directly to the nearest branches/transaction counters of SeABank to receive advice on personal financial management solutions!

Effective personal financial management is the key to achieving financial freedom and a prosperous life. Hopefully this article will help you apply effective personal financial management principles to build a solid financial foundation for the future.