While 2020 has been an extraordinary year, it’s worth taking a retrospective look how the decisions that were made during this year determine the outcome of our current situation. COVID-19 has been a real test of our resilience. It’s more important than ever to take a prudent approach when it comes to family finance. Taking a careful look at how your family earn, spend, and save will allow you to become better at budgeting over the next year and beyond when the pandemic is over. Through our Practical Money Skills website (myanmar.practicalmoneyskills.com), Visa Myanmar provides essential financial knowledge in local language to increase public awareness on the importance of personal and household finances, as well as providing interactive tools to help people better understand how every decision they make can meaningfully contribute to their financial security in the long term.
Here are four useful tips, dubbed the ‘4S,’that every household should consider when it comes to managing household finance.
1. Save before you spend
Saving is for every family. It is less of how much you earn but more of what you allocate for savings. If you spend more than what you make, you’ll soon end up in debt. As a rule, every household should set a clear goal of saving at least 10% of their monthly income aside for rainy days ahead. Each household may want to tailor their saving goals according to unique needs. You can find out how much exactly your family should save each month here.
Ten percent of monthly income may seem like a little sum of money. But if you hold on to it wisely, it can grow substantially over time. With Myanmar Central Bank’s policy interest rate currently at 7% per annum, and minimum bank deposit interest rate at 5%, you can let the compound interest work its wonder. You can also apply for auto direct debit service with your bank to let the bank transfer 10% of monthly income from your payroll/salary account to the savings account on the same date on each month. See for yourself how small amount of monthly savings can go a long way by calculating how much your money can grow over the years here.
2. Scan and record
Recording every expense real-time or every day will help you see the difference between necessary and unnecessary spending. Many smartphone apps let you scan the receipts and break down your daily spending into categories such as grocery, dining out, luxury items, unexpected expenses, etc. As a result, you can track your expenses over time and see which expense you can cut to reach your savings goal.
Keeping a written or digital record of your expenses is a crucial step towards lifelong financial security. With 2021 fast approaching, perhaps you can put ‘keep tabs on every expense’ as one of your New Year’s resolutions. And when you finally get a better grasp of your own spending habit, check out Practical Money Skills website which guides you towards the next step to help you reach your saving goals – whether you’re a student saving for education, first-jobber, parent with children, or planning towards your retirement.
3. Set up budget for each family member
Household finance can be fun for the whole family. If you’re a parent in charge, you can ‘gamify’ this by setting a daily or weekly allowance for each family member, and see if they can stick to that budget with some extra savings left at the end. You may reward your kids with extra piggy bank savings in the same amount that they can save.
If you have young children at home, it’s a good idea to acquaint them with money basics from an early age and equip them with financial literacy for the future. Visa Myanmar provides an e-book that teaches children and young adults about the basics of earning, saving and budgeting through easy-to-understand content. Get the e-book “Your Money, Your Future: A Practical Money Guide for Students” (in Myanmar language) here.
4. Shop smart
Your family have worked hard for every kyat you earned, and you should make the most out of it by spending more wisely. Many retailers in Myanmar are offering promotions through their affiliation programs with banks or credit card companies. It’s worth asking the shopkeeper or cashier if they have special discounts for the debit or credit card you have. Some banks also offer reward points every time you spend on your card, and you can turn those rewards into cash back credit towards your next purchase. Using card payment is also more secure and convenient than carrying cash, and you don’t need to withdraw money from bank branches or ATMs, or have to deal with changes.
If you’re thinking about going cashless or are curious how credit card works, including different types of credit cards and major benefits of switching to digital payments, you can learn more about credit card basics and how to spend smartly and responsibly here.
With these ‘4S’ tips of managing household finance, Visa Myanmar believes that greater financial knowledge can empower Myanmar household to better manage their money and improve their quality of life. We aim to offer interactive tools and educational resources to help everyone become better at navigating major life events in order to build a stronger financial future at every stage in their life. We make these resources available online for free in Myanmar language at myanmar.practicalmoneyskills.com
Visa Myanmar can be found on:
Website: https://myanmar.visa.com/
Facebook: https://www.facebook.com/VisaMM
About Visa
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network – enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of digital commerce on any device for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa, visa.com/blog and @VisaNews.
