Beginner’s Guide to Stress-Free Budgeting
Let’s admit it; Filipinos love to spend. We also love to plan get-togethers with friends and other gimmicks around our paydays. Whether it’s to play billiards, watch movies, or have karaoke nights, the mere mention of “sige, sa sweldo” almost, always, means it’s a sure thing.
Shopping and dining out also revolves around this bi-monthly phenomenon – we’re millionaires for one day, paupers for 14. The thing about being financially responsible, though, is not just being able to spend for yourself and pay your bills, you also need to set aside something extra, especially if you have your own family and much more if you have children.
How to Be an Expert at Budgeting – The Stress-Free Way!
Learning how to budget (as opposed to withdrawing everything in your ATM account) not only allows you to cover all your necessities, it also gives you the opportunity to start saving.
It can be a trip of a lifetime or a down payment for a new car or condo – point is, it’s time to start acting like a responsible adult and take control of your finances.
Here are five helpful tips to help you become financially responsible without too much hassle:
1. Understand why you are saving.
“Pagtitipid” is not a foreign concept to us Filipinos. We know what it’s like to scrimp here and there to buy something that we want later on.
Bringing a packed lunch instead of buying from the canteen or eating out has always been a good way to save. When applying practical budgeting to everyday life, it’s important to have an end goal in mind.
Are you planning to move out of the house? Are you saving up for a vacation? Are you looking to put a down payment on your first car? The reason for saving must be identified—regardless if it’s for short or long term goals.
2. Differentiate needs vs. wants.
Most of the time, everyone has a hard time telling the two apart. You need coffee in the morning, yes. But, when you choose to buy the P140 cup of coffee, it becomes a want.
The same thing applies to dining out in expensive restaurants as opposed to bringing your own meal to work. True, you need to treat yourself once in a while, but don’t make it too often.
At the end of every month, the extra cab rides, coffee, and restaurant meals add up to a lot of savings. Learn to make tradeoffs.
3. Stop asking relatives or friends to bail you out of money situations.
Knowing that you have options if ever you’ll be caught up in a money-related situation makes it even harder to learn how to budget and save because it’s easy to borrow a few hundred for fare money when cash runs out.
Setting aside money for essential things will teach you how to prioritize and portion your earnings based on what needs to be paid first. In case you fall short on cash, don’t make your relatives or friends your first recourse.
Instead, you can try going to a pawn shop and try pawning some of your belongings for a few short days. You can get good money for your laptop, phone, or designer bag from PawnHero without the hassle and embarrassment of people seeing you going there since it is an online pawnshop. All the necessary transactions can be conducted right at your home and even through your smartphone. With just 3 steps, you can pawn your item with a low fixed interest rate at 2.99%.
When you get your next pay, promptly pay the money you borrowed plus the small interest fee, and you’re good!
4. Learn to make do with what you have.
Regardless if you’re just starting your career or somehow already financially stable, people tend to upgrade their lifestyle choices based on what they see around them instead of what they can actually afford.
Take stock of where you are in terms of income level, and live within your means. If this means not being able to join your officemates for drinks after work, let it be. After all, this is only temporary.
5. Set aside 20 percent of what you make as savings.
Committing 20% of your money to a savings fund is integral to having money anytime you need it. Making this a habit can help you budgeting money for emergencies.
The good news is that if no emergency arises, the money in the bank can be allocated for a college fund or even a retirement fund.
Budgeting can be easy to do if you keep it simple and have adequate time to plan for the future. After all, Filipinos are known to be madiskarte in any aspect of their lives. Not to mention, they also put their loved ones welfare before their selves.