Problems with money management, such as insufficient salary, are something that most salaried employees often encounter. It may seem like a big problem, but there are bigger problems waiting for us, such as:
The beginning of the month has just passed and my salary is already all gone.
Let’s take a look at a sample story of young working people in a workplace.
Tantawan and Peng are colleagues who work in the same position and earn the same salary. Both of them have the same starting point in their work, but their end results are completely different.
Sunflower: “Women like us must always look good.”
When she gets her salary, most of it is spent on online shopping for pretty things like clothes and cosmetics that she likes, not to mention parties and gatherings with her close friends at the end of every month.
I thought, “If we work hard and earn money, we should spend it, for happiness and for the things we have to get.”
Peng: “From now on, we will be the head of the family. We need to create stability.”
In addition, salaried people like us, after working throughout our working lives, after retirement, we want to have a comfortable life and be able to relax as we want, right?
Because Peng is a far-sighted person, he wants to make sure that the money he earns from his investments is enough to cover his expenses in retirement. So when he gets his salary, he divides it into three parts.
The first part is for regular expenses and a small amount for emergencies.
The second part is to invest in goals to achieve his dreams. For him, it is for marriage and buying a house.
The third part is for long-term goals, which are investments for use during retirement.
I think, “Nothing is certain in this era, so financial planning is very important. If we don’t have financial goals, we will definitely not reach other goals in life.”
Due to the two siblings’ different lifestyles, their later lives are completely different.
Tantawan’s retirement life, not having enough money to use in retirement, may become a burden for future children and grandchildren, which is different from Peng, he has more than enough money to use and live comfortably in retirement without having to rely on anyone. Then what kind of person do we want to be?
“We might want to be happy with the money we earn.”
But if we do this, we may be happy only in the present, but we may not have a future. This is the financial comfort zone, which is the problem of salaried people.
Because we believe that salary is a sure thing, salary must come and must come at the end of every month, so we spend a lot, spend beyond our means, causing many people to have difficulty making ends meet, using future money from credit cards or installments with 0% interest, and this is the beginning of the financial disaster for salaried people.
It leaves us with no financial goals, no money management, debt, no emergency savings, and no retirement savings.
Because financial life can be planned, let’s start managing money in the style of the new generation of salaried people.
With SEC Retirement Checkup, a program for planning and calculating retirement savings goals from the Securities and Exchange Commission (SEC).
In just 8-10 minutes, we will immediately know what our life after retirement will be like if we have the current lifestyle of spending money.
- It’s easy to start by filling in basic information such as gender, male or female, our current age, and the age we want to retire, for example, male, current age 30 years old, and the age we want to retire is 60 years old.
- Choose your lifestyle and the expenses you want to use in retirement (current value). The program has options ranging from living simply at 10,000 baht, living comfortably at 50,000 baht, or living luxuriously at 80,000 baht. However, we can set it ourselves, for example, we might set it at 15,000 baht per month.
- What are our expected spending plans after retirement? For example, paying off debts, buying a car or house for children, traveling, or medical expenses. We can fill in estimated figures, such as expecting only medical expenses of 500,000 baht.
- Current financial information, salary and savings, for example, the current salary is 30,000 baht and savings are around 10% (excluding the deductions for the provident fund), which is 3,000 baht.
- Current asset information: Deposits and money markets, debt instruments and debt mutual funds, stocks and equity mutual funds, mixed funds, real estate funds, savings insurance, and others (in baht), such as gold. In this case, for example, we have 50,000 baht in deposits and money markets, 50,000 baht in stocks and equity mutual funds, 50,000 baht in mixed funds, and 100,000 baht in savings insurance.
- Information on the current provident fund, investment plans in the provident fund, our current total provident fund, the percentage that members save, and the percentage that employers contribute. In this example case, our current total provident fund is 50,000 baht, we choose to deduct 5%, the employer also contributes 5%, and we have been a member of the Social Security Fund for 6 years.
The results from the SEC Retirement Checkup are as shown in the illustration below.
It turns out that our problems and plans left us with insufficient funds for retirement.
In the SEC Retirement Checkup, there are also recommendations for us on how we should adjust our spending, savings and investment plans to meet the future we want.
For example, in this case, if we just change the plan to invest in the provident fund by choosing to invest 100% in debt instruments, we will achieve the retirement plan goal as planned. Or change to choose to invest 100% in equity instruments, we will immediately have more money than the retirement plan goal. Guaranteed that you will not have to worry or be anxious after retirement.
You can check your financial future here: https://retirement-checkup.com/
For other articles on Finance and Investment, please read more at:
Provident fund is an important tool in achieving the goal of having money to use in retirement.
