Managing personal finances is important not only for now but also for the future. Can you imagine how you will live your retirement life if you don't start saving for your retirement from now? This is just one example. To help, there are some basic terms related to personal finance that you need to know.
Personal Finance Glossary You Need to Know
Budget is an estimate of income and expenses. Budget allocation can be done at the beginning of the month, for example, so you get an idea of how you will use your money and can track whether you spend within the budget. Every need needs to be budgeted for more organized finances.
2. Emergency fund
An emergency fund is an amount of money to be used only when an emergency happens, usually unexpected or unpredictable.
An emergency fund can be used to help cover short-term emergencies such as a broken refrigerator or more long-term ones such as losing your job and not getting a new job for several months.
Expenses are anything you spend money on. Are there electricity, water and internet bills to pay every month? Then all kinds of monthly bills are part of the expenses.
Anything that costs money and no matter how small, such as monthly bank admin fees and interbank transfer fees, also needs to be considered as expenses.
Related article: Having a Jago Account Can Save Money
Income is money that you receive regularly, be it every month, every 6 months or every year, for example.
Income can come from various sources. For those who work in an office, the salary received every month is the main source of income. You can also explore other sources of income, such as looking for a side or freelance job, to save for the future.
When investing, you invest money or assets that you have with the aim of getting a profit or return.
Investments can be either short term or long term. In general, short-term investments are made in less than 1 year, for example by saving money in a Locked Pocket.
Meanwhile, long-term investments are usually aimed at securing the future because it takes a long time to be able to enjoy the results. One example of long-term investment is mutual fund investment.
6. Retirement fund
A retirement fund, as the name implies, is a savings that you grow while you are young or are still working in order to be able to live your old age comfortably and free of burden.
By having sufficient retirement savings, you don't need to depend on your children or other family members. Children do not need to be part of the sandwich generation because they have to pay for their parents. You break the chain.
Be Jago at Managing Finances with Jago
Managing finances needs to be done from now on. By getting used to it, you will become jago and more jago at managing finances.
Whether it's for budgeting, saving for emergencies and retirement as well as managing and analyzing expenses, you can do them all easily and practically through the Jago application.
There are Saving Pocket and Spending Pocket features to separate various needs and to budget. Then, there's the Plan Ahead feature to automate saving and help pay bills on time. There are many other features for you to try right away once you have a Jago account.
What are you waiting for? The Jago application can be downloaded here for those who don't have it yet.