I think that we should allocate our money into 5 categories.
1. Necessary expenses. I am talking electricity bills, food, school fees (if you are studying or have children), housing, healthcare, and transportation. I believe this group is where most of our money goes because we basically can't survive without these things.
2. Emergency fund. In cases of emergency, we should be able to get some money for it. Especially in countries where healthcare is not free, we should be prepared to pay if ever we get into accidents or we get sick though hopefully it never happens but still we have to be always prepared either way.
3. Savings. Some people save up for specific things like buying a better house, a better car, getting your kid into a better school among other things. Some people may just save for the sake of having money to pull for emergencies. I think emergency money and money I want to use into building a new home should be separate.
4. Investment. Aside from our day jobs where we get most of our money to pay for our necessary expenses, we should invest in assets to make our money grow. This could be gold, real estate or cryptocurrencies.
A person needs income to survive. With the income he earns, he has to manage his family and has to ensuring current and future financial security.
We use a part of our ordinary income for daily activities, i.e. for purchasing necessary things. Usually, most of our income is used for this purpose. Some people think that at least 50% of the income is spent, while in some cases, those with low income may spend more.
After all the family expenses, the thing that we can give importance to is saving. If we cannot save, then even if we live normally at present, we will not be able to change that situation. We must have a saving attitude. And in this regard, one can save money according to his ability. If he saves for the long term, he will be able to change his life style in the future.
Even after saving a certain amount, a person can also invest if he wants. If you can prepare for investment now, it is possible to change your current financial situation. Investing will increase your income source, which will facilitate more income in the future.