I know a lot of people my age or older who struggle financially. A lot of them always ask me to lend them some money from time to time. Most of them are close to me, so I make sure I give them advice to start saving so they can have stash to pull during time of needs, such as when somebody gets sick or they got out of job. Having savings is really helpful. You don’t know when you might need it. This is what I practice and advice to my friends:
1. Salary – Savings = Spendings
This formula changed my life. When I was young, my mother’s practice was to be frugal and manage to make the monthly salary last for a month. That means, by the end of the month, there’ll be few or nothing left. There’s nothing wrong with that actually. You will save some money but not a lot. However, when I was in college, I fortunately read a financial book that introduced me to a new and better way to save. Here’s what you should do: When you receive your salary, take a fraction from it and put it in savings account. Then make a budget with the remaining amount. At first it might be challenging but you’ll get used to it after maybe 3 months. I advice you start with 10%. So if you earn P20,000.00 every month, subtracting P2,000 is not that bad, isn’t it?
2. Make and Follow Your Budget
This is basic advice, I know. But most of the people don’t do this. Try calculating the amount of savings you’ll have if you follow your budget religiously, then maybe you’ll be inspired. Also, make sure that your budget is realistic. Try cutting spendings that are unnecessary such as eating outside, buying accessories, phone bills, etc.
3. If you haven’t thought of it before you saw it, you don’t need it!
This one is something I formulated myself. I just realized I sometimes buy things I don’t need because it’s on sale, it’s cute, or maybe I convinced myself I need it when I saw it in the mall. Then I realize I end up having more of something when I only need one. So I made a rule for myself: If I didn’t think of buying it before I see it then I don’t need it. It’s easy, believe me. You just have to stop yourself on purchasing that cute skirt. After two weeks that cute skirt will be out of your mind but the money you could’ve used to but it is still in your wallet!
4. Move your ass. Grow up. Be responsible.
Laziness causes you to use money in exchange of services from others when in fact you can do it yourself. Simple examples: Paying for laundry service, buying food or eating outside, expensive transport, expensive groceries. I know this one lady, she’s too lazy to wash her clothes until they pile up to mountain of dirty laundry that she has to bring them to the laundry shop because she can’t do it and she has no clean clothes left. Yes, she’s that lazy. She’s one of the few people who come to me to lend some money. In our age though, it just takes common sense to realize that. It would be rude to tell her to grow up and be responsible. I didn’t say anything to her though, but whoever you are reading this, please don’t be lazy. Be responsible.
5. Develop your self-esteem
Believe it or not, this is one of the reasons why people spend so much. Their old phone is not good enough anymore. I often wonder why they have to upgrade when their old phone can satisfy their use of mobile phone: Call, send SMS, watch videos, browse the internet, take a photo.. What else do you need? Sure, it would be nice to have the upgrade but please consider your financial status. If you earn at least P100,000.00 per month, then go ahead, buy that P30,000.00 worth gadget. What’s funny is that I know some people who earn around P20,000.00 who buys that latest gadget which costs more than their monthly income. Worse, they have children to feed. My advice is, try defining your need first. Then purchase only those that fit what you need. The secret is to be satisfied with what you have. Attach your worth not to things but to other important things. Try doing something else that will make you feel accomplished. You’ll forget about that latest gadget. You’ll easily see what you really need. You appreciate yourself more without the accessories.
Ok. That’s the most I can share this time. After you successfully make saving your habit, maybe you can study on investing. That way you’ll multiply your money and become rich! Maybe then you can share with me your secrets.
Lots of love,