🔽 How to Scientifically Plan Your Finances

1. Comprehensively Understand Your Current Financial Situation

The first step in financial planning is to understand your current situation.

Including the following:

Income: Monthly fixed salary + part-time/side hustle/investment income

Expenses: Fixed expenses (rent, transportation, food, etc.) + flexible expenses (entertainment, shopping)

Assets: Savings, real estate, stocks, funds, insurance, digital assets, etc.

Liabilities: Credit cards, mortgage, car loan, personal loan, online loan, etc.

It is recommended to use spreadsheets or bookkeeping software (such as Suishouji, MoneyWiz, Notion spreadsheets, etc.) for recording and categorization.

2. Set Clear Financial Goals

Financial planning without goals is like water without a source.

It is recommended to divide the goals into three categories:

Short-term goals (within 1 year): such as paying off credit cards, saving 50,000 yuan in emergency funds

Medium-term goals (1-5 years): such as down payment for a house, job change, study abroad, startup capital

Long-term goals (5+ years): such as retirement savings, children's education funds, financial freedom

Goals should be specific, measurable, achievable, relevant, and time-bound (SMART principle).

3. Establish a "3+6" Fund Management System

Divide your accounts into the following categories:

1. Daily account (3 months of living expenses): to cope with daily expenses, high liquidity

2. Emergency account (6 months of living expenses): reserve funds to prevent sudden situations such as unemployment/medical treatment

3. Savings account: save for goals, preferably in fixed deposits or money market funds that cannot be withdrawn at will

4. Investment account: take certain risks to pursue capital appreciation (funds, ETFs, stocks, digital assets, etc.)

This classification can avoid the situation of "spending all the money when there is a lot of it."

4. Reasonably Control Expenses and Liabilities

Expense management suggestions: Follow the "50/30/20" rule:

50% for essential living needs

30% for personal growth and enjoyment

20% for savings and investment (if in debt stage, can be adjusted to 40/10/50)

Liability control suggestions:

Prioritize paying off debts with interest rates exceeding 12%

Do not use revolving credit/high-interest online loans

It is recommended to control the debt-to-income ratio below 40%

5. Establish Investment Thinking and Gradually Achieve Financial Growth

Once your basic finances are stable, investment is the key to achieving financial breakthroughs:

Low risk: money market funds, fixed-term wealth management, insurance

Medium risk: index funds, bonds, REITs

High risk: stocks, digital currencies, venture capital, etc.