Every year end is the time of the year that companies prepare or conclude their annual budget. The annual budget will act as a guide on annual income and expenditures that are expected to be received and paid over the coming year.

This is a good practice that can be adopted by individuals.

How many of us have done this each year? Or is anyone trying to prepare for the new year?

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Disregard the economic condition or the spiraling prices of goods and services. Start looking into a personal annual budget. You can plan your finances better if you have a clear direction.

How do you start?

It’s simple. Draft a basic personal annual budget spreadsheet consisting of two categories: projected inflows and projected outflows.

The projected inflows are the income streams to be expected in the coming year.

The projected outflows consist of savings and investments, fixed expenses and variable expenses.

You can detail them with a monthly projected inflow and outflow.

Quite easy, right? A personal annual budget is handy if you are committed to achieving your financial goals. Try as much as possible to stick to it.

Apart from preparing the budget, it is advisable to start investing. Putting money in a savings account will earn you interest. However, returns are generally lower compared with investments.

Start moving a portion of your savings to investment portfolios. For guidance, you may consult a wealth management specialist.

This year, make a pledge to spend wisely! Spend only on what you need or have budgeted for. Think, plan and compare before spending.

Keep a shopping checklist, do not buy on impulse and try to shop alone. Some say shopping is a way to release stress. Still, uncontrolled shopping and spending may lead to tension and more problems!

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Monitor your credit card spending. Make an effort to pay promptly and in full settlements. Try using a debit card.

Sign up for a medical insurance policy. As medical care advances, cost also increases. Medical insurance will protect you financially in case of a serious medical issue. Buy one while you are still eligible. It is costly and difficult to get health or insurance policies once you reach 50.

Take the opportunity to come clean this year. Ditch ineffective habits of managing your personal finances.
Be more organised, systematic and take control of your finances to earn more, save more and spend prudently.

The New Straits Times, November 23, 2016 @ 11:02am by Syed Al-Qadri, Bandar Puncak Alam, Selangor

“Sama – Sama Kita Amalkan Gaya Hidup Aafiyat”