Some say that money isn’t everything we need. That is partly true. But you must admit that the lack of it can certainly make your life miserable, especially these days when everything else goes up except your pay.
I would always hear my parents (in chorus) telling me things like “Mahirap ang buhay ngayon, kaya matuto ka mag-ipon” (Times are tough these days, thats why you must save up). I for one, have been trying to manage my finances, but failed. And I know I’m not alone in this scenario. So why don’t we breakdown the wrongs, and find ways to make things right.
Its Not How Much You Earn, But How Much You Save
Jumping in on that payday sale and splurging just because you have another pay day to look forward to next month isn’t making you money smart at all. Our usual formula is INCOME – EXPENSES = SAVINGS which is wrong because most of the time theres nothing left to save.
Lets make a pie out of our salary and make 8 slices of it: 3 slices for your food, transportation, and telco allowance, 2 slices for your home contribution (i.e. rentals, utilities, grocery etc), 2 slices for your savings, and the remaining slice is for your… you got it, savings! Remember that the correct formula should be INCOME – SAVINGS = EXPENSES
Note To Self: Live below your financial capacity. Do not buy something out of impulsiveness and instead learn to save up. That way you’ll always have extra cash around when the need arise.
Work, Hard. Party Moderately.
OK I am not being anti social, nor am I telling you not to have fun. Dining out or going for a beer bucket are rewards we give ourselves after a tough day in the office. But do not over- reward yourself. These “luho” might go overboard without you noticing it and then you wonder where have all your salaries gone.
Note To Self: This is the perfect time to learn how to cook (if living independently). Or if you’re really burned out from work, take a leave and go somewhere you can relax. Remember that you cannot save if you spend your “emergency funds” to some unnecessary indulgences.
Make A Budget List And Stick To It
While most young professionals are perceived to be paid well, the fact remains that we are all big spenders. And when we spend more than what we’re supposed to be earning, we find ourselves strapped for cash and struggling to survive until the next pay day. Break the cycle by making a list of your expenses and plan according to what you earn.
Note To Self: Reevaluate your lifestyle and you will surely spot a few unnecessary expenses that you can live without. And when making this list, be sure to follow it religiously!
Plan Ahead And Think Of Long Term
Aside from saving up, investing in a retirement plan is something we could be thanking ourselves for in the future. In recent studies, only 1.1% of Filipino working class have some form of life insurance. Might sound creepy to some but being open to getting a memorial plan is a good start. But of course, there are a lot of other retirement plan options that can make you start off by just saving, say 2% from your income.
Note To Self: Investing on a retirement plan should not wait until you have “extra money”. Now is the right time since you do not have a family of your own that definitely has expenses. Remember that a little sacrifice can go a long way.
Being part of the working class also means being a responsible money spender, as it can make or break your finances in the future. Plans are already rolled out in this article, all it takes now is a huge amount of discipline and handful of determination to achieve our goals for the better life ahead.