Group13_Online Magazine

FINANCIAL MANAGEMENT

JUNE 2022 • SEMESTER 2 • KMU 1013
HELPING RELATIONSHIP

GROUP MEMBERS

Lister Diana Anak Robert Enterie 70223
Rynna Yoziela Gung 71451

Emmanuel Chawong Anak Clement 73438
Angeles Fu Cin San 74121
Yeo Hui Yee 77702

WHAT IS
ABOUT FINANCIAL
FINANCIAL
Finance is the allocation of

TYPES OF FINANCE assets, liabilities, and funds

over time, process, mediums to

Individuals, businesses, and government
reap the most out of the activity.

entities all need funding to operate. In other words, managing or

multiplying funds to the best in

PPEERRSSOONNAALL FFIINNAANNCCEE interest while tackling the risks

CCOORRPPOORATE FFIINNAANNCCEE
PUBLIC (GOVERNMENT)
and uncertainties.
FINANCE

WHAT ARE
BENEFITS
OF

FINANCIAL
PLANNING

?

Financial planning has various practical 4) Maintain your peace of mind
advantages. It allows you to: - You can pay your monthly bills, save for your
future objectives, and indulge yourself and your
1)Help in increasing your savings. family without stress if you have enough money.
- It is feasible to save money without a financial Planning your finances allows you to handle
plan. However, this may not be the most your money more effectively and gives you
efficient method. A financial plan provides a more mental ease. If you follow the financial
great deal of information about your income planning steps, you will soon arrive at financial
and spending. You may monitor and reduce tranquilly.
your expenses conscientiously. It instantly
enhances your long-term savings.

2) Enjoy a higher level of life.
- Most individuals believe that if their monthly
costs increase, they will have to reduce their
level of life. Instead, if you have a sound financial
strategy, you will not have to sacrifice your
lifestyle. It is possible to attain your objectives
while living comfortably.

3) Be ready for instability.
- Having an emergency fund is an element of
financial management. You must guarantee
that you have a fund equivalent to at least six
months of your monthly payments. So, you
won't have to worry about getting money if
something bad happens to your family or if you
lose your job. The savings can help you pay for
various expenses at the moment.

WHY
FINANCIAL
PLANNING IS
IMPORTANT?

1. Make sure that financial requirements 2) Assists in the management of your money
are met. When you don't budget your money, you'll

spend more than you make or on things you

Money is the most crucial aspect of don't need. You can efficiently manage your

anyone's life. Earning money is one thing, money if you have a competent financial

but making sure that money meets your management strategy. Financial planning

requirements is another. Planning that assists in determining which expenses to

specifies an individual's income, and address immediately and which later. You'll be

costs, establishing strategies for spending able to pay your taxes, save money, and pay

the money, and preparing for future your monthly expenses more efficiently.
objectives are vital parts that guarantee
financial demands are met. 3) Expenses, Savings, and Budgeting
Budgeting your income is helped by financial

planning. Budgeting allows you to determine

where your money should go, how much

should be saved, and how much you should

invest. Based on your lifestyle goal, stick to your

budget, prevent excess, and allocate your

money into savings. In difficult times, your

savings and investments will come in useful.

4) Grow or increase your assets
You may be able to increase your assets if you

better grasp your money. You are in a solid

financial situation if you possess assets. Assets

are sometimes linked to liabilities. You are

increasing your net worth by determining the

value of your assets. You will be financially

healthy if you settle your responsibilities by

paying off your debts and expanding your

investments in fixed assets. By efficiently

managing your money, you may expand your

assets.

Financial 14 June 2022

FACTOR & CAUSE

FOR NOT MANAGING

financial well

At present, human life has been simplified by the
existence of an object called as “Money” and it is not
impossible that money can make society feel so
miserable that some are categorized as bankrupt. And
What’s more, everyone have their own strategies on
how to manage their financial.
However, if there is no knowledge and awareness
about financial management then that person can fall
into debt problems anytime. With uncontrolled debt
habits will make the individuals being declared as
bankrupt. This situation has been happened for
anyone in this world which proving that level of
financial literacy is at a low level.

FINANCIAL Monthly Magazine

WHAT IS FINANCIAL LITERACY?
Financial literacy is the cognitive understanding of financial

components and skills such as budgeting, investing, borrowing,

taxation and personal financial management. We are all aware about
this components and skills but are we truly knowledgeable about the financial

literacy because some of us may have or not exposed to this during adolescence.

Early disclosure about financial to young
people should be done as a precaution. This
is because knowledge needs to be nurtured
and practiced in order to be able to
strengthen the finances of young people.

These are important things that need to be
emphasised from beginning:

FINANCIAL MAGAZINE "you must gain control over
your money or the lack of
it will control you "

FINANCIAL Monthly Magazine

SAVING
MTHOENBEEYSITS

Force Saving " Don't Go Broke Trying To
Is a practice where you need to start LOOK RICH "
saving as soon as you have a steady
income with set aside at least 10% of Set A Long Term Desires
income as your fixed saving and it is the Such as wanting to own a home, owning a car, and being
best if you manage to have savings debt-free. Setting up your goal will make you want to realize
equivalent to 6 months' salary or more. all your goals later. Practise in spending according to or
below the level of ability rather than exceeding income.
Have Conventional Insurance
Coverage Practise Of Saving From Young Age
This is for your self-protection means This can help you gain momentum until adulthood and it is
that if any misfortune happens to you easier for you to practice something if it has become a habit
then insurance will help ease the from the beginning.
financial burden that will be borne by
the heirs or yourself later. Control Spending By Prioritizing Needs Over Wants.
You need to have high discipline and responsibility to keep
Avoid From Bad Debts you on the right track. Settle all any monthly commitments
Such as credit card debt and personal such as house, car, education or any related bills which are
loans because the interest rates charger much more important than changing a new mobile phone.
are high.

June Edition | 2022

POOR
FINANCIAL
MANAGEMENT
AND ITS
NEGATIVE
IMPACTS

Bad financial management leads to
2) Poor mental health
People who have poor financial management

financial stress which can be detrimental to tend to be in debt more often than those

who knows how to handle their finance.

our daily lives. Not only it can affect us Studies have shown that people who are

currently experiencing financial hardships

mentally, but it also has negative impacts such as in debt are more likely to have higher

occurrence of mental health issues such as

towards our physical health, social life, depression, anxiety, insomnia and even

bipolar disorder.
working and studying performance.
3) Decrease in studying performance
1) Poor physical health Students who are experiencing financial

Financial stress can deteriorate physical hardships because of poor financial

health as stress has been linked to various management will have their studying

types of diseases and conditions such as performance affected by the emotional

migraines, heart problems, increased blood pressure felt by them. The pressure can be

pressure and many more. Some of these very overwhelming for students which will

conditions related to stress could be life- lead to inability to focus, decreased morale,

threatening, which can plunge you further slothfulness and absenteeism.
into financial disarray.

4) Increase in debt
Individuals who can't manage their finance

efficiently tend to borrow money from

someone which will lead them to being in

debt. A lot of people does not realize how big

of a problem being in debt can be to them

until it is too late. As they keep borrowing

money, their debts will gradually build up

until it is too much for them to pay it back.

This will cause relationships to deteriorate


and bridges to burn,

THE HEALTH CONSEQUENCES

OF FINANCIAL STRESS

While we all know there are far more important things in life than money, when

you're in financial trouble, fear and stress can take over. It can lower your self-


esteem, make you feel flawed, and make you feel hopeless. When financial stress

becomes too much to bear, it can take a toll on your mind, body, and social life.

Insomnia or other sleep difficulties
- Concerning regarding unpaid debts or a loss of income will keep you awake at

night more than anything else.

Weight gain (or loss)
-Stress can affect your appetite, leading to overeating or skipping meals to save

money.

Depression
-Living in a financial quagmire can make anyone feel down, hopeless, and unable to

concentrate or make decisions. People who are in debt are more than twice as likely

to suffer from depression, according to a study conducted at the University of

Nottingham in the United Kingdom.

Anxiety
-Money can provide a sense of security; without it, you may feel vulnerable and

anxious. Worrying about unpaid bills or a loss of income can cause anxiety symptoms

like a racing heart, sweating, trembling, or even panic attacks.

Relationship difficulties
-Money is frequently cited as the most common source of conflict between couples.

Financial stress, if left unchecked, can make you irritable and angry, cause a loss of

interest in sex, and erode the foundations of even the strongest relationships.

Social withdrawal
-Financial worries can make you withdraw from friends, limit your social life, and

retreat into your shell, all of which will exacerbate your stress.

Physical ailments
-Headaches, gastrointestinal issues, diabetes, high blood pressure, and heart disease

are just a few examples. In countries where healthcare is not provided for free,

financial concerns may cause you to postpone or avoid seeing a doctor for fear of

incurring additional costs.

Unhealthy coping methods
-Drinking excessively, abusing prescription or illegal drugs, gambling, or overeating

are just a few examples. Worrying about money can lead to self-harm or suicidal

thoughts.

HOW TO CREATE A

SUCCESSFUL

FINANCIAL PLAN

FINANCIALBY ANGELES FU PLANNING

IN 7 STEPS

1. Start by setting financial goals 5. Tackle high-interest debt
Your financial goals guide a good financial plan. Pay down "toxic" high-interest debt, such as credit
You'll feel more intentional about saving if you card balances, payday loans, title loans, and rent-to-
approach financial planning from the perspective of own payments, as part of any financial plan. Some of
what your money can do for you — whether that's these have such high interest rates that you'll end up
buying a house or helping you retire early. repaying two or three times what you borrowed.

2. Track your money, and redirect it toward your 6. Invest to build your savings
goals Investing appears to be something reserved for the
Get a sense of your monthly cash flow — how much wealthy or for those who are well-established in their
money comes in and how much money goes out. A careers and families. It's not the case.
clear picture is essential for developing a financial Investing can be as simple as contributing to a 401(k)
plan, as it can reveal areas where more money could plan or opening a brokerage account (many have no
be directed toward savings or debt repayment. minimum to get started).
Understanding where your money goes can assist
you in making short-, medium-, and long-term plans. 7. Build a moat to protect and grow your financial
well-being
3. Get your employer match You're building a moat to protect yourself and your
If you meet with a financial advisor, he or she will ask: family from financial setbacks with each of these steps.
Do you have a company-sponsored retirement plan, Continue to improve your financial moat as your career
such as a 401(k), and does your company match any progresses by:
portion of your contribution?
True, 401(k) contributions reduce your take-home pay Increasing your retirement savings contributions.
now, but it's worth it to contribute enough to get the Increase the size of your emergency fund until you
full match because that money is free. have three to six months' worth of living expenses.
Using insurance to safeguard your financial security
4. Make sure emergencies don't become disasters in the event of a car accident or illness. Family
Another way to protect your budget is to establish members who rely on your income are protected
credit. When you have good credit, you have more by life insurance. Most people's needs are best
options, such as being able to get a good car loan served by term life insurance, which covers 10- to
rate. It can also help you save money by obtaining 30-year periods.
lower insurance rates and allowing you to forego
utility deposits.

FINANCIAL

PLANNING

TIPS FOR

STUDENTS

1. Creating a Budget 2. Learn to Live Within Your Means
A budget is nothing more than a plan for how you'll spend A budget allows you to keep track of your
your money on a monthly basis. Begin by making a list of your spending and avoid going into debt in order to
fixed expenses, such as rent, tuition, books, car payments, maintain your lifestyle. Expensive electronics,
utilities, and food, to create your first college budget. Make a going out with your friends, and eating out
list of your non-essential expenses, such as clothing and multiple times a week are likely to become a thing
entertainment. To make a basic budget, add together your of the past for college students. Before you start
fixed and discretionary spending, then subtract it from your spending on items that aren't necessary for your
income. Work earnings, student loan refund checks, side survival, make sure you're meeting your financial
hustle earnings, and any money your parents may provide on obligations. Remember that college is likely to be
a regular basis are all included in your income. a time in your life when you will be earning very
little money, so be prepared to make some
sacrifices.

3. Try to Avoid Accumulating Debt Whenever
Possible
Debt can quickly overwhelm you, and it will likely
follow you for years after you graduate. Keep one
credit card on hand in case of emergency, but
don't use it for anything that isn't absolutely
necessary. Only charge what you can afford to pay
off in full each month if you're going to use credit
for purchases. This can save you money on interest
charges and help you improve your credit score.
Improving your credit score is important because
you may want to rent an apartment, take out a
loan to buy a car, or eventually buy a home after
you graduate. For these types of financial moves,
your credit score matters, and the higher your
score, the easier it may be to get approved and get
the best interest rates on loans.

PLANNING IS

BRINGING THE

FUTURE INTO THE

PRESENT
SO THAT YOU CAN DO

SOMETHING ABOUT IT

NOW

- ALAN LAKEIN