Do you have a stable job?
Are you living paycheck to paycheck?
Are you always worried about making ends meet?
Are you a “one day millionaire”?
Do you have a habit of spending more than what you earn?
If you answer YES to any of the questions above, then this post is for you.
Just click (more…) to continue reading.
I know a lot of people who would answer YES to any of the questions above. We all just love to spend money. We love treating ourselves with little splurges every now and then. That is why there is a thing called “retail therapy.”
Trust me, I know this feeling very well. I am not a hypocrite. Like you, I also love to shop. I love to treat myself and buy myself something nice at least once a month. And I can also be a bit impulsive.
Back in the Philippines, I was earning a little over minimum wage. Owing to my frugality, I was able to finance my daily expenses and occasional splurges, and even save enough to help with family expenses. It also helped that I had a small business that supplemented my income.
Now that I’m working in Singapore and earning a bit more, I have to become more responsible when it comes to money. It would be a tragedy if, after working so hard here, I’d be left with nothing for my future.
I’m no expert when it comes to handling finances. Everything I learned about savings and investments, I got from books, chitchats with friends, and trial-and-error personal experiences.
If you would love to learn how to handle your money and stop worrying about how to make ends meet, you might want to follow these simple (and guaranteed useful) tips:
- Set a financial goal. Let’s say you want to be able to save a million before you reach 30. Or you want to buy a car or a house or whatever. Set a goal with a timeline. As Stephen Covey said, “Begin with the end in mind.”
- Make a budget and stick to it. With a pen and paper in hand, list all your income sources and corresponding amount in one column and list all possible expenses and your budget for these on another column. Let’s say you’re earning PhP 15,000 a month. A budget plan would be something like this: PhP 3,000 savings, PhP 1,500 transportation, PhP 3,000 meals, PhP 1,000 phone bill, and so on until every peso (or dollar) has a purpose. Right now, I’m using YOU NEED A BUDGET (YNAB) to set my monthly budget and track my expenses. It’s a personal home budget software to help one gain control of their money, get out of debt, and reach financial goals. For me, this is the best budget and expense tracker app available. It’s very easy and practical to use. Just click the link above to try it FREE for 30 days.
- Track your expenses. Track your expenses for a month to see where your money goes. Knowing your spending habits will help you in setting a budget and sticking to it. This will also help you stop making unnecessary expenses. Start TODAY and list down all the expenses you’ve made down to the last cent. You can keep this in a journal (like I used to) or you can use YNAB.
- Pay all your debts first. After receiving your salary, pay all your debts first. If you owe a lot of money, then pay it off in regular increments. You will feel so much lighter, like a heavy weight was lifted off your shoulder, after being debt-free. And of course, avoid borrowing money especially when you know it would be hard for you to pay it back. Not paying debts destroys relationships. So if you value relationships, make sure you pay back whatever you owe. Also, if you know that you’d be a little late in payments, kindly let the person know. I’m sure they’ll understand, given the proper explanation.
- Pay yourself next (aka Save First before You Spend). After paying off your debts, you need to pay yourself next. This simply means saving a certain percentage of your salary and allocating it as an emergency fund or personal savings. This amount shall not be touched, unless you really really REALLY need to such as in the case of emergency medical expenses and other unforeseen circumstances. The usual mistake that people do is SPEND FIRST then save. Usually, it would end with having no savings at all. Thus, make sure to SAVE FIRST so you can reach your financial goals. A lot of finance experts would suggest saving at least 20% of your salary. However, if you’re earning A LOT, you can save up to 70% of your salary. Whatever the percentage and no matter how small, make saving a habit every payday.
- Spend wisely. With whatever that’s left, split it into monthly bills, everyday expenses, charity, and other expenses that you may have.
- Avoid impulse buying. If you see something you’d like to buy, leave the store, think about it long and hard, and come back the next day. Most likely, you’ll be too lazy to even come back. Congratulations! You’ve just saved some money. Haha!
- Live within your means. Spend only what you have and don’t spend money that you do not have. This mantra will help you avoid debts and impulse buying.
- Avoid credit cards. Especially if you have no self control. Sooner or later, you’ll be drowning in debt and high interest charges. Only use a credit card if you’re sure that you can pay the full balance before the next bill arrives.
- Open your mind and read more. If you are really interested in gaining better control of your finances, read a lot! I suggest that you read “8 Secrets of the Truly Rich” by Bo Sanchez. It will definitely change your perspective and open your mind to a lot of possibilities. Then if you’re interested in investments and learning how to grow your savings, visit MangStocks.com. It’s a website for Filipinos with great resources and simple tips on how to open mutual funds and how to invest in stocks.
These are just some of the few tips that I live by. 🙂 If you have more tips, please do share in the comments section below.
Just remember, it is never too late to start.
♥ Monique ♥