How to manage your money?
True financial literacy revolves around five pillars: saving, budgeting, managing credit, managing debt, and investing. Let’s explore each topic in more detail to better understand the basics of teaching financial literacy.
Part 1: know your goal - STAR Dream
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S - Specify your goal, list down atleast 3 goals
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T - "Time" when can you achieve this goal
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A - "achieve" how can you achieve this goal
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R - "relevant" is this goal worth achieving
Part 2: know your "needs" and your "wants"
Record your spendings to categorize it into needs and wants.
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Need - something you need to live and function
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Want - something which is nice to have but not essential.
The aim of this spending exercise is to prioritize on essential needs first and spend based on what we can afford.
Part 3: Budget to set your monthly savings goal
A budget is a spending plan that will help you track how much money you receive and how much money you can spend each month.
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Income: Monthly salary
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Remittance: Amount you need to send back home
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Monthly saving goal: how much you need to save to reach your goal
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Balance for spending: the amount left over after setting aside savings and remittance
Part 4: Protection
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Try and build an emergency savings fund to protect yourself and family incase of emergencies.
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This should be equivalent to 3 to 6 months of monthly income to give you some room incase of unexpected events.
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Having sufficient savigns will help you avoid borrowing from others, money lenders and other scams.
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Be wise, save now.
Part 5: Investment
Request your employer to help you open a bank account to deposit your monthly salary.
Various banks like Hang Seng bank, BOC HK bank have salary accounts with low minimum balance for domestic helpers.
Benefits of opening a salary account in HK includes
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Tracking your salary records in one place.
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Ability to remit money digitally online
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Track your spending and withdraw cash only as per needed
Want to talk to us. We are eagerly waiting to hear from you.