Financial Tips: Saving Money
Do you want to save more money?
Saving money is a good habit to develop because it has many benefits. Some of them include being prepared for unexpected emergencies, paying off debts, and creating a nest egg of money for your future.
In traditional Filipino culture there is typically a breadwinner of the family. Not just for immediate family but extended family members also. This reduces the remaining income that an individual has to save for themselves. Circumstances like this can exacerbate a person’s debt, leading to a downward spiral. Financial stresses are a common source of mental health concerns.
Use the following tips below to help grow your savings and reduce your financial stress.
Tips to help you save more money:
Make a list of all your monthly expenses
List everything at first! From big-ticket items like car maintenance to smaller ones, such as cups of coffee. You can then sort your list into categories e.g. groceries, mortgage and gas. Don’t forget to verify the accuracy of your own accounting by checking credit card and bank statements.
Create a strict monthly budget
Once you have a list of your expenses, you can work out a budget that is in line with your monthly income. This will give you a clear idea of your expenses vs. your monthly income. Be sure to put some of that money aside, as part of your emergency funds and as part of your long-term savings goals. Aim to save 10-20% of your income.
Cut down on unnecessary spending
Eating out is one of the main areas of over spending. You can lessen the amount of times you eat out by cooking at home and packing your own work lunch. If there is something expensive you want to buy, give yourself a couple of days to think about it before making the purchase. You may be glad you passed up on spending money for it. Refer to your list and decide which things you can do without and replace them with activities that truly make you happy.
Set financial goals:
A good time is to divide your goals into short-term and long-term goals. Short-term goals (1-3 years) could include rent, insurance and student loan payments, holidays, and personal goods. Long-term goals (4+ years) could include your children’s education or retirement. While it is important to never lose sight of long-term goals, short-term goals can be important, too. Save up for a fun gift to yourself, like a smartphone or a weekend trip – saving and reaping the rewards for these smaller goals can help keep you motivated to stay on track with your other saving goals.