I am an accountant and a part-time writer here in wikye.com. Once again, I am extending my appreciation to this website, thank you for the opportunity for me to convey my knowledge on how to deal with your funds and to lay down these tips when you are dealing with your finances. The objective of this piece is to give information regarding the importance of savings.
I am an employee here in Philippines and based on my experience it is not easy for me to save a lot of money. Especially in my case, I have just started working. Aside from necessities like food, transportation and other daily expenses, I have to pay for my lodging.
To thrive in this country, you have to be extra smart to optimize your benefits. There are things that you need to ask to yourself, such as:
With this amount of money, can I say that my future is secured?
Which benefits do I need to prioritize, the long-term or short-term?
Where can I get funds in cases of emergency?
Why do I have to save up my money?
There are so many considerations for you to deal with in terms of your finances. Be wise and use it as a tool for you to grow and be successful.
My job as an accountant has exposed me to budgeting and financing large sums of money. But, if you are dealing with your own funds, you do not need a bachelor’s degree to know and execute these things. You don’t need your professors to teach you how to spend your money. You just need to know what your goals are and your means to achieve them. There are so many advises all over the internet that will help you to save your money; that may educate you in terms of finance.
Your life does not revolve around your company where you are currently employed at, nor to your boss who gives you your salary. I am not saying to ditch your job just because your salary simply not enough. Never give up your primary source of funds, hence, in your spare time, be productive enough and earn more money to save up for yourself— for your future. You must have the perseverance to look for a sideline, but not to the point you will let yourself die because of over-working or work-related stress. Be smart when you work so you can balance your life— you do your job and enjoy life at the same time.
Here are some useful tips on how to manage your finances:
SET YOUR GOALS
A target is needed for you to motivate yourself to save and to be thrifty. As a novice, your intention to achieve your goal in your finances must be clear. You have to set your mind that at this point in time, at this certain age—you have this certain amount of money to secure your future and to buy the luxury things you have wanted. Set a concrete plan to manage your finances from small details up to the large ones. As Peter Drucker said, “Plans are only good intentions unless they immediately degenerate into hard work.” But before the execution, you have to establish your plans. When will you start saving? How much will you save? What is the interval between your deposits? A detailed-planning would be the fundamental of your goals and implementation.
CONTROL YOUR IMPULSES
Stay away from an impulsive-buying habit! It will destroy your plan to save for your future. Just because you have seen a nice shirt, cool shoes, beautiful jewelry, etc. doesn’t mean that you should immediately give in to your urge to treat yourself. STOP THINKING THAT YOU DESERVE EVERYTHING YOU HAVE WANTED AND YOU WORKED FOR IT BECAUSE YOU WILL TEND TO SPOIL YOURSELF TOO MUCH. It is good to buy a thing or two every payday which will serve as your reward, but of course, this must be subjected to limitations. Before you spend for luxurious things, you have to prioritize your necessities first. Remember, there is a right time for everything. You have to spend your money wisely. Sometimes, you just want that particular thing for just a week or month.
Envelopes are made to budget all your expenses and to separate each of them. You have to think of the things you need to survive for a month or until the next payday, then write a label to each envelope that corresponds with your purposes. Maybe you are wondering why it needs to be put it in the envelope. Well, as long as you can see your money inside your wallet or purse, you tend to use it to things don’t need. Remember, the budget for your needs are already separated and placed inside the envelope. This is to avoid thinking that you need to buy “more rewards” for yourself. Remember, your goal is to save for your future. STOP SPOILING YOURSELF TOO MUCH AND PLEASE DO NOT ADD AN ENVELOPE FOR YOUR BOYFRIEND’S EXPENSES.
Most importantly, do not forget to track your expenses. You may download an application which will set as your tracker or you may read more articles to feed your mind in terms of your finances. Alternatively, you may do the traditional way. You have to keep all your receipts and compute each of them.
APPLY THE 50-50 RULE
The 50-50 rule will be applied after you have segregated your expenses for your needs like food, electricity bills, etc. I suggest whatever remains must be divided into two: emergency funds or savings and budget for your wants- those are the things you don’t actually need to survive.
This rule is not absolute. It is restricted by different factors: If you are a minimum wage earner; if you have a family depending on you; your expenditures for your needs are almost equal to your salary, I know it would be difficult for to do this so I advise for you to adjust the ratio. You can start at small amounts. No matter how much your money is, savings is still savings and you should never compromise it.
INCREASE YOUR SAVINGS GRADUALLY
As you earn more, you have to increase at least 5%-10% every cut off or every payday. I suggest you should start small because our goal is to save continuously. Wherein, we are all sure that you can deposit a certain amount of money and gradually increase it as you receive your salary. This strategy will help you earn more.
But how can you actually do this? The answer is simple- limit your funds for your wants. As you receive more money from your job, there should be more proportion for your savings. For example, your salary will be given on every 15th and 30th day of the month. On the 15th you have to separate ₱1,000.00 as your savings and on the 30th you have to separate ₱1,100.00
I am hoping that you reflect on these tips when dealing with your finances. Of course, savings are essential to secure your future but then again, these guidelines are not absolute. Every point in this list is bound by your goals and financial status. Here are some questions for you to answer: Are you able to save? Are you willing to save?
If yes, then you have the drive to secure your future.