One of the few things I like about Facebook is being able to join groups with advocacies. I am part of cooking, selling, blogging, and financial groups. The latter is where I gain insights about saving and investing. Huge thanks to mom blogs about saving money. I learned practicality. There are many ways to save and make your money grow. On this post I would like to share some of my practices in managing our finances which I also learned through reading. We don’t earn a lot and still far from being financially free but with the knowledge I acquired from books, articles, and forums I am at ease that we are on the right track.
1. Money envelope- others use jar but I started with envelopes. Labeling each envelope what they are for has helped us have the mindset that there’s a specific budget for everything- bills, allowance, grocery, savings, and miscellaneous expenses. This way we are more careful in spending and there’s less stress because we know that everything we need to pay for is covered. We stick to the budget we create.
2. The basic formula: INCOME-SAVINGS= EXPENSES- on my recent post Life Lessons, this formula was also mentioned. Based on an article I read somewhere, we have this habit of spending money first and whatever is left is considered savings. But most of the time our wallet becomes empty even before the next paycheck comes. We use the money intended for savings to survive.
There’s no hard and fast rule when it comes to how much your savings should be (others prefer to have an emergency fund which is 3-6 months worth of monthly expenses) Of course we don’t want to go hungry while saving, right? Do not feel pressured if your friend manages to save 30% of her income. You may start with whatever amount you’re comfortable with. In our case, we put 10-15% of our total salary in the bank. If you want to increase your savings, find another source of income- sell stuff or have a part time job. You should not compromise food and other necessities just to go over what you can afford to save.
3. Pay off your debt and AVOID it as much as you can- one of the easiest ways to manage your finances is to make yourself free from debt. Make a list of your all your debts and start paying them one by one. Be wise and disciplined if you have a credit card.
Stop borrowing money from your parents or friends just to buy a new gadget, dine in an expensive restaurant, or get yourself an OOTD. Chinkee Tan, a Wealth and Life Coach shared a funny but true post entitled “Porma Now, Pulubi Later”. Click this link to read about it.
4. Need vs. Want– months after I have started with my job, I thought I was rewarding myself whenever I buy new clothes every payday. “I deserve this after working hard!” I often go to the mall to hunt for sale items and buy it without a second thought. After giving birth to my youngest, most of the branded clothes I used to wear did not fit anymore. To free some space, I decided to give it away. Some were just worn once or twice. That’s money I spent on things I did not really need.
Now before saying “mine” to a new bag or shoes or anything for the house, I ask myself, “Do I/we really need this? Can we go on with our lives without this?” Weigh how much you want it vs. how much you need it.
5. Project DIY– yes, you read it right! Instead of eating outside, why don’t you cook your own meal? It’s healthier and cheaper. Your 500 pesos can feed 5 of your family members. Coffee lover? Brew your coffee at home. You need not to spend 150-200pesos for a cup of your favorite drink everyday. Instead of going out every freakin’ weekend, you may want to consider lying in your bed to read good books or have a movie marathon. You can even reward yourself hours of good sleep. How satisfying is that?
Hey, I am not saying that you become anti-social or sacrifice happiness for the sake of being practical . But being mindful about how you spend can make a lot of difference.
Budgeting and saving does not mean you are depriving yourself of the good things. It only means you are in control of your money and it’s not the other way around. Do this to avail the fine things in life. People nowadays are more conscious when it comes to where their money go and we should be, too. You can also pass on this habit to your kids. Start them young.
The journey to being financially free starts with your desire to change how you spend and save your money for a better future. Hope that this simple mom blog about saving money can help you a lot 🙂
Do you have other tips you’d like to share? Comment down!
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Money envelope photo by me
Other pics from Google