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Monday, July 30, 2018

6 Questions to Test if You Know Your Money

The one and only trait of all the wealthy people is - Understand Your Money. Do you really know about your money? Here are 10 questions to test yourself! If you can answer all clearly, congratulations, you are on your way towards the wealthy people! 

6 Questions to Test if You Know Your Money

Q1: Where did my money go last week?
Wealthy people know exactly where they spend all their money. Having said that, the wealthy people have allocation/budget for all expenses. So if you don't, it's not too late, take 10 minutes to review your bank and credit card transactions. Did you stay within your budget last week?

Q2: Where will my money go this week?
If you did not stay within your budget last week, no worry, this week is your redemption! If you have overspent last week, what can you cut down this week to make up the difference? Review your budget again to figure out how much exactly you can spend on each categories this week.

I don't even have a budget?
At this juncture, if you cannot answer the two questions above, then you really gotta start from the beginning! Get yourself a notebook for tracking of all your income and expenses, call it "My Money Book". If you are Go-Green supporter, you can set up a spreadsheet using Excel or Google Sheet to do the tracking. To help you kick-start your financial management, you can download #YourFinanceDoctor Template here. 

Q3: What do I want in 5 years that I need to save/invest for today?
"Direction is so much more important than speed. Many are going nowhere fast." I bet many of you have not really thought of what you want in 5 years that you need to save/invest for today. You probably just work work work work work. *plays Rihanna's Work* Here are some examples:

"In 5 years, I would like to have RM100k to buy a house." 
"In 5 years, I would like to have RM50k for vacation in Europe for a month." 
"In 5 years, I would like to be financially independent with a passive monthly income of RM5k."

Q4: What is the one major goal you want to accomplish in a year?
Long term goal does not motivates you in short term? Set yourself some short term goals as well. Big goals can be broken down into small goals so that they looked more achievable. Here are some examples:

"I want to pay off all my credit card debt."
"I want to accumulate RM10k for emergency fund."
"I want to start invest RM1k per month."

Q5: What should I do this week to move closer to my goal?
"A dream is only a dream if work don't follow it." You can dream all you want but if you don't put it into action, you can never achieve them. So ask yourself, what step will you take to move yourself closer to the goal? Here are some examples:

"I will track every dollar I spend this month to see where my money is going."
"I will stop using my credit cards so that no new debts added."
"I will stop all entertainment expenses until I have accumulate RM10k emergency fund."

Q6: What can I do this week to further my money knowledge?
Learning is a lifelong journey. But this is simple. You are already doing this right now!

"I will Like & Follow #YourFinanceDoctor blog."
"I will make appointment with #YourFinanceDoctor to better manage my finances."
"I will read a chapter from a personal finance book."
"I will attend investment conference to keep myself up to date."

6 Questions to Test if You Know Your Money

Like the saying goes "你不理财,财不理你". If you dont take care of your money, your money will not take care of you too. So you should always be proactive for your personal financial management. Start now so that 5 years from now, you will look back at all these steps you have taken and thank yourself for how far you have achieve. It's never too late to start NOW.

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