Why should you manage your money wisely? How to start financial planning for success

Question

When a crisis causes your income to disappear for a moment and expenses continue to flow out, or when faced with higher medical bills, are you financially prepared to handle it? These stories are not distant issues but about proactive planning.

Financial planning is not overly complicated. It is the art of managing resources so that your money works toward your goals, not just letting time pass by and hoping for the best.

Can you forget about planning? The truth revealed by 7 key reasons

1. Our future is longer than we think

Advances in medical technology are extending average lifespans. Thai men have an average age of 71.3 years, women 78.2 years. Some may live up to 100 years.

Suppose you want to retire at age 60 and need a monthly income of 30,000 THB until age 80—that equals:

30,000 THB × 12 months × 20 years = 7,200,000 THB

But what if you live longer? The problem starts here. Statistics show that only 25 out of 100 people have enough savings for post-retirement years.

2. Society is changing; our children are 1-2, not 5-6

Thailand is entering an aging society, with over 10% of the population over 60, and this trend continues to rise.

The trend among younger generations is fewer children due to high living costs. Relying on children in old age? According to statistics, 55.8% of the elderly still depend on others, which means your children will also need to sustain themselves. You must rely on yourself.

3. Inflation is the enemy that erodes our money

20-30 years ago, a bowl of noodles cost 5-10 THB. Today, 40-50 THB. In 30 years? It could be 100 THB.

Food, healthcare, transportation—all are getting more expensive. But your “fixed” money buys less. Without investment planning to beat inflation, your happiness after retirement may fade.

4. State welfare is just basic

In 15 years, 1 in 5 Thais will be elderly. But the workforce? Decreases from 6 workers per elderly to 3.

It is estimated that government tax revenue will be insufficient for welfare. Monthly elderly allowances of 600 THB, social security funds averaging 3,000 THB/month—are these enough? That’s why you need to plan for your own success.

5. Choosing financial assets? Too many nowadays

In the past, just depositing money in a bank was enough. Today, interest rates are only 1.00-2.00%, while there are 726 stocks, 1,537 mutual funds, insurance, life insurance, and many other investment tools.

It’s like standing in front of a zoo but not knowing which animal to choose. Learning and choosing wisely will help you reach your financial goals faster.

6. “Save” more, worry less—this is real power

Compare example:

Mr. Save vs. Mr. Not Save (15 years)

Starting savings: 10,000 THB (same)
Monthly savings: Mr. Save 5,000 THB / Mr. Not Save 0 THB
Returns: Mr. Save 5% / Mr. Not Save 1% (bank deposit only)
Result after 15 years: Mr. Save 1,357,582 THB / Mr. Not Save 11,607 THB

The difference isn’t just in numbers but in discipline, starting early, and choosing the right tools.

7. One crisis can cause power outages

During COVID-19, many families lost their breadwinner. Some fell seriously ill and needed treatment. Medical costs skyrocketed. Without savings, life’s happiness disappears in an instant.

Planning for life insurance, health insurance, and emergency funds is your “shield” against life’s risks.

Where to start with financial planning?

Step 1: Set clear goals

Many save money aimlessly, not knowing why. This breaks discipline. Instead, set clear goals:

Short-term (1-3 years): Save for desired items
Medium-term (3-10 years): Buy a house, car, get married
Long-term (10+ years): Retirement, insurance planning

With clear goals, choosing suitable tools becomes easier.

Step 2: Record income and expenses daily

90% of early career starters “month to month” with no savings. The problem? Not knowing where the money goes.

Start recording income and expenses today. Just 7 days is enough to see:

What are essential expenses
What are luxury expenses
Where can you cut back

Today, apps make this easy. Tracking for a year and saving 1,000 THB/month equals 12,000 THB/year, which can be invested.

Step 3: “Mindset” with financial statements

After working for years, many don’t know:

How much are their assets?
How much are their liabilities?
What is their net worth (Assets - Liabilities)?

Record everything:

Assets: bank accounts, investments, house value, car value, gold, collectibles
Liabilities: mortgage, car loan, credit card debt, personal loans

Result: Total assets - total liabilities = true net worth

The higher, the better. This is your “financial health.”

Step 4: Prepare an “emergency kit”

If on Friday you go to work, but on Monday you’re laid off? Or suddenly a relative gets sick and needs money?

Prepare at least 3-6 times your essential monthly expenses in reserve.

Example: If your essential expenses are 10,000 THB, save 30,000-60,000 THB.

Where to keep it? In highly liquid accounts, cashable immediately and safe, such as regular savings accounts or money market funds.

Step 5: Know your risks

Many insure their house and car but not themselves. This is wrong.

If the breadwinner (primary earner):

Loses income suddenly
Medical costs spike
Debts remain

Life and health insurance protect your family from financial crises.

Step 6: “Save first, spend later”—no turning back

Old formula: Income - Expenses = Savings ❌

New formula: Income - Savings = Expenses ✓

Set up automatic deductions for savings from your salary—no excuses.

Save at least 10% of your income; more is better.

Good debt principle: Combine all accounts and ensure debt doesn’t exceed 45% of income.

Example: Income 20,000 THB → debt payments should not exceed 9,000 THB (45%)

Step 7: Or income “not just one source”

During COVID-19, many lost jobs. Relying on only one income source is risky.

Spend your free time finding additional income from what you like or are good at:

Speaking = tutor, speaker
Writing = freelancer, blogger
Online = selling products, online tutoring

Even earning 100-200 THB extra per day adds up monthly.

Step 8: Make money work “invest wisely”

Invest leftover money in suitable assets based on your capacity:

Stocks/mutual funds: returns from dividends + capital gains (buy low sell high), but with risk

Bonds: fixed interest and principal repayment, lower risk

Real estate: steady rental income and appreciation, but requires high capital

Currently, analysis tools are available to choose the right timing.

Step 9: Invest in “your knowledge”

Financial planning is an ongoing learning process. Many institutions offer free SET Education courses, podcasts, YouTube tutorials.

Spend 1-3 hours weekly learning about topics of interest to:

Improve investment decisions
Reduce fear through knowledge
Continuously improve financial health

Basic principles you must know

1. Control cash flow: Budgeting isn’t about “limiting” but “knowing” where your money goes.

2. Save + Invest: Both are necessary, not one or the other.

3. Insurance + Emergency fund: Your life’s protective wall.

4. Tax reduction: Plan insurance and retirement to get tax benefits.

5. Retirement planning: Start from your first working day.

Summary: How much can you start today?

Keep clear financial records
Prepare 3-6 months emergency fund
Keep debt below 45% of income
Save at least 10% of income
Set clear financial goals for each life stage
Learn investment tools and understand them

“The more you know, the less you fear—knowing what to do and just starting.”

Effective financial planning isn’t complicated. It’s about choosing to start and committing to systematize it from today onward.

Are you ready? Start by recording your income and expenses or creating a financial plan now.