Aren’t you tired of always waiting for your salary – hoping and praying that you will survive until the next cut-off? Then when the pay day finally comes, you spend it in a speed of light. The waiting game is actually longer than you are able to hold on to your money.
As you grow older, you should learn how to handle your finances well. It may be difficult especially in the beginning but with enough focus and determination, anything is possible. In this article, we will share tips on how to become more responsible with your money.
- List down your income and all your expenses – it is important that you have clear idea of how much you are earning every month versus the amount you spend every month. Employees have their basic salary but you need to consider deductions like SSS and Pag-ibig contributions, tax, and deductions for tardiness or leave without pay so you need to take note the net salary that you usually get every cut-off. Then, list down all your expenses like rent, allowance, gas or transportation allowance, credit card bills, phone bills and other. You should include every thing up to the smallest ones like Spotify and Netflix subscriptions. This way, you will have idea how much you are earning vs your expenses. Now, if you see that your earning per month is 45,000 PHP and your expenses total is 51,000 PHP then you need to worry because that’s not going to work. Even a person who is bad in Math knows that the figure is off.
- Come up with a budget – once you have idea where you are on your income vs expenses, it’s time to fix your budget. it is best to determine which ones are important and you cannot survive without versus the “wants” that you can cross out from your lists to improve your money flow. For example, do you really need to pay for Netflix when you can just borrow your partner’s account? Maybe you can cut down your trip to Starbucks and just make your own coffee from the office pantry. If you add up all those things, you will surely save more.
- Have a separate bank account for your savings – it is best to have a separate savings account from your payroll ATM. You should allot specific amount to put to your savings account every cut-off. This way, you are able to save part of your income instead of spending everything. In fact, it is advisable to have emergency fund that is worth at least 6 times your monthly expenses so you are prepared in times of crisis.
- Avoid using credit cards – credit cards tempt you to spend more than you can afford and at the end of the day, this can drown you in debts. So, you should use cash as payments instead of swiping everything with your credit card. If you really need to use your credit card, be sure that you will use it wisely.
- Invest some of your money – saving money is good but you should also think long term. Saving a portion of your salary per month is good but what’s best if you can allot some money for investment. One of the best form of investments is in the form of stocks. You can start small – some stock brokerage even offers as low as 5,000 PHP to start and once you start earning more, you can buy more shares. This is great for your future. It can be intimidating when you hear stocks or stock investments but you should not be. You can always consult a reliable stock brokerage firm to help you start.
Imagine not realizing it’s actually pay day because you don’t actually need it since you still have lots of cash on your wallet. Isn’t that lovely? Following the tips that we discussed here will help you make this your reality.