bs-preloader__icon
ru kz en

Three pillars of personal financial soundness

Each of us has certain income that we allocate to our monthly needs. Some even manage to save up for goals and dreams, while others live from payday to payday. The official ARDFM website Fingramota.kz talks about a universal and simple financial management model.
Three pillars of personal financial soundness

The model is built on three capitals, pillars that will definitely lead you to financial freedom.

The first pillar is your current capital. Your money should be under control and within reach for your monthly expenses. For example, you plan to buy new clothes for yourself or your nearest and dearest, go to a cafe/restaurant, birthday gifts for relatives and friends, or make the loan payment, if any. Besides, there are daily expenditures on transport and lunch.

Calculate all expenses in advance, put the allocated amount in an envelope, into a bank account and do not go beyond the planned budget. This will help you avoid impulsive and momentary spending.  

The second pillar is a reserve capital, financial cushion, that is, an emergency reserve, which should be at least 6 of your official salaries. Financial cushion will give you confidence in the future.

No need to look far for an example: some people experienced money difficulties during the pandemic, as they lost their jobs or their activities were temporarily banned.

The third pillar is passive capital. Passive income is formed from various tools on the principle “do it once - you get it all the time.” It is formed not only with the aim of finding additional money sources to spend, consider it as a way of earning money to achieve such financial goals as buying a car, vacation abroad, self-development.

Planning for passive income should be taken seriously. First you need to determine how much funds will be required for its formation and whether you have such an amount. If not, it must be deducted from the main income. Duration and frequency depend on what level of passive income you want to reach at the end of the day.

Source: https://fingramota.kz/ru/news/post/tri-kita-lichnogo-kapitala

Photos are from open sources.

Share
read also
Financial institutions calculate losses after riots
Financial institutions calculate losses after riots

During the terrorist attack on Kazakhstan, all financial organizations in the country...

Yermek Kadyrbayev: “In Kazakhstan and Ukraine we built work from the scratch”
Yermek Kadyrbayev: “In Kazakhstan and Ukraine we built work from the scratch”

REFERENCE Ermek Kadyrbaev is a licensed actuary with extensive experience in life ins...

What companies get access to retirement money
What companies get access to retirement money

Deputy Chairman of the Agency of the Republic of Kazakhstan for Regulation and Develo...

The most interesting materials of the site you have in the mail! Subscribe to the newsletter.

ASK A QUESTION TO THE EXPERT
ASK A QUESTION TO THE EXPERT
Submit your application