Posts Tagged 'investment'

SIMPLE TIPS ON HOW TO INCREASE YOUR MONTHLY SAVINGS AND RE-STYLE YOUR BUDGET

In a society like ours who treated “spending” as an ultimate freedom, saving in contrast seems like a boring idea. Saving sounds like a strange idea to most people especially to folks with paltry monthly net pay, like me. Human beings are unique creatures who loved to think of squandering rather than saving, but there are other important reasons that stalled us from embracing “saving” seriously, the high cost of living that grip the world today plus the fact that rude employers (especially in the Philippines) stubbornly refused to give a pay raise, setting aside some extra amount can really be a torture.

But then I realized that in this world of uncertainties and misery, no one exactly knows when the path of emergency hits you and the importance of having extra money is really a great comfort. I spend the rest of the weeks agonizing over how to devise a budgeting scheme, my meager salary is impossible enough to accommodate my daily expenses much more save. But my determination to put a little amount “for rainy days” was so strong that I studied every possible option for my plan. After exploring different techniques and formats, at last, I finally arrived in a suitable “saving and budgeting style” suited for my financial status without sacrificing other needs.

Here are some of those valuable tips:

1. DETERMINE YOUR MONTHLY INCOME– this is the most crucial step you have to undertake while creating a room for “saving”. Sometimes it is so difficult to come to terms with our fate especially when we see the horrifying facts of our pay slip every pay day, but the free will to survive remains so strong that I devised an effective plan to give a go signal in my account (LOL!).
2. DETERMINE YOUR MONTHLY EXPENSES-a lot of people committed a grieve mistake in this area. Why? Because they think they can get away with the misery of crisis that they spend, spend and spend incessantly until every drop of cents took them away to the wrong path of budgeting. Thinking they can still look comfortably for other alternative in increasing their income, they tend to increase their daily needs also without limits. But an income is not considered income unless you received the tangible amount. So better control your appetite in spending to avoid troubles with mounting expenses. To prevent disaster in buying unnecessary items, the most ideal thing to do is write down your expenses based on your priority for that particular month and see to it that the amount won’t override your monthly income. It is best to plan what are your priorities. For instance your August 15 salary is only good for grocery and amortization, do not force yourself to buy branded materials and eat in a 5 star hotel with the rest of your family, it can wait up to the next pay day, just write it down and include in your next budget.

3. STICK TO YOUR BUDGET– after analyzing your income and expenses, write down the things you want to buy based on the needs you included as expenses. When you go to the shopping malls, always bring that copy and stick to what it is written there and be sure not to make any alteration with your notes. If buying shoes is not included in your list, then maintain some resistance when seeing a cute, new arrival shoes from Gucci. Sometimes, self-discipline is the best teacher in life when you don’t know anymore how to spank your attitude with never ending debt. Remember, if you don’t know how to resist the charm of temptation you will ended up rampaging your wallet and credit card and the whole budgeting style went into drain.

4. THINK FOR YOUR SAVINGS-if you are really in a hopeless condition to maintain savings, try to make an effort to open at least 1 savings account separate from your monthly payroll account, it won’t hurt your ego if you will set a side for a bank account, there are banks offering small maintaining balance. With this technique you will not lure to spend everything when pay day arrived. A savings account is your defense during “rainy days” and that should be included in your monthly plans just like expenses. When you received your salary, deposit right away the intended amount for your savings and be sure not to withdraw it the next day.
5. MAINTAIN A NOTEBOOK– for your income, expenses and other plans. Try to label it with the following:
INCOME-this column consists of your net pay and other income you expected to receive for that particular month. Remember an income is not considered income unless you are sure to receive that particular amount.
GROCERY-this column consists of your grocery needs. You must
Itemized the grocery you want to purchase for that period. It is best to buy grocery items at least once every two weeks to ensure limits, by this method you have a clear idea how to create the next budget for your grocery needs.
AMORTIZATION- you also make a column for this item and list down
the amount due for that period.
PAYABLES- assuming you have monthly payables for your loan and
other debt obligations.
FOOD ALLOWANCE-this column amount is exclusively for food
Consumption only, separated from the grocery item, to evaluate how far you spend on foods and other beverages.
PETTY ALLOWANCE-the purpose of this amount is to supplement other expenses incase you will be short in your budget, for instance you want to buy additional grocery or watch a movie or indulge in sumptuous snacks which is not Included in your list, this allocation will cover the costs without sacrificing your savings account.

After the rundown lists, put a corresponding amount with the above items to anticipate the cash you only carry when you go into shopping but be sure to have an extra amount in case you will be short, try to compare prices with atleast 2 shopping malls, in picking product item try checking the nutrional value if they are the same pick the cheaper one.

The next thing to do is determine the amount you want to deposit in your savings account. Now, don’t grind your teeth for my unusual style of savings, some people or even in books, tell us to prioritize the saving amount before expenses, I won’t follow that pattern because there is a tendency to scramble in your savings account and withdraw when expenses run a bit larger. My technique is to make a total of all my expenses and deduct it from my income, the remaining amount will be for my savings, in that sense I will not be tempted to withdraw in my savings account just to augment other needs.

6. MINIMIZED THOSE INCOME-WASTED HABITS-lately I bought a business book written by David King entitled “You Can Be Rich”. Here he listed some of the income-wasting habits that must be avoided and minimized:
a. Eating weekly in fancy restaurants-though eating in fine dining restaurants is not a mortal sin, it is not a good idea to eat there too often when you are guarding your purse for possible disaster or when your budget is not allowed you to pick up delicate European delicacies coupled with expensive wines. You can include that in your next budget. The idea of eating regularly in a fancy restaurant is suited only to people whose income allowed them to patronize daily resto hopping, not when you are analyzing your next budgeting tactics.

b. Regularly betting on lotto and sweepstakes-this is one ridiculous habit that must not be tolerated by any parties. Though gambling is an incurable disease, especially to those who make “take a chance” as their life’s guiding principle, this habit is applicable only to those who have sufficient income, but if you are struggling with your limited salary and has a family to think about, forget this insidious habit and refrain from entertaining any ambition to patronize this kind of “past time”. Betting on lotto and sweepstakes is like a charm that you can’t resist until you’ll become addicted to it, that addiction will take you further to eternity of troubles. Correct me if I’m wrong.

c. Having two or more credit cards-this is the common mistakes of people belonging to my class (that is, receiving a not-so-handsome-salary), again, this is good only to those who have huge income, businessman or other affluent individuals. I am not saying that you have to deprive yourself from acquiring one (according to them a very helpful scheme-but I don’t think so), but maintaining more than one is a sure suicide if your income is only grasping a minimum limit good enough for your daily needs. If you have one credit card makes sure to stick to your capacity to pay and not to go down the bottom of your credit limit. If you are itching to buy that cute cellular phones or new invented exercise machine, do not pull your credit card right away, but think a hundred times whether that desire of acquiring those gadgets makes you an insomniac or tend to bloat your stomach or trigger your migraines, if not, then discard that idea and wait until you have enough money.

d. Having postpaid plan on mobile phone-this idea is suited only to those who have comfortable income and of course, self-discipline. I must say self-discipline because if you don’t know how to set your own limits with calls and texts you will ended up swimming into the ocean of huge phone bills. Pre-paid is a lot easier compared to post plan because you can budget your calls and texts at your comforts.

e. Patronizing convenience stores-convenience stores are a bit expensive compared to supermarkets and other shopping stores. The amount you spend with their high prices can be saved for other expenses, so as much as possible avoid them.

f. Buying from the internet and home channels-the huge interest they added is not a surefire for those who are planning their budget.

g. Shopping without a clear idea of what you want-Again, it is best to write down the things you want to purchase based on your budget for that particular period to avoid buying unnecessary things. When you are thinking of having those seductive clothes for the next pay day or tantalizing make up kit that you think could enhance your sex appeal, right it down and start window shopping to compare prices, department stores’ prices vary to some degrees, do not stupidly think that expensive items are more durable than cheap ones, in some cases it might true but not always, it is on how you used it that makes the material enduring. When you are buying food items in the supermarket, try to take time reading nutritional information usually written at the back of the label, compare the nutritional value with the same brands, if they are the same, then pick up the cheaper item. Do not depend your judgment on TV commercials, they are not really reliable. My simple tips: When buying milk, I usually look on vitamins and minerals with higher content of the following: Calcium, Iron, Zinc, Folate, Vitamins A,C,D and E, if the 2 milk brands have the same value, I usually pick the cheaper one. The most important thing is you achieve your purpose why you bought that particular product.
h. Patronizing branded materials regularly-try to discipline yourself and put in mind that wearing branded materials everyday won’t make you the local version of Paris Hilton or Julia Roberts or Jennifer Aniston. It won’t add glamour either. The real glamorous people are those who carry themselves well, who looks amazing even in simple get up and there’s no need to be accentuated with branded fabrics, it is on how you present yourself, your aura and the unbeatable x-factor (the factor which makes a person unique). It did not matter if you are wearing Gucci, Christian Dior or smudging in Revlon or Estee Lauder, or just shopping in surplus shops. There are people who look silly in their Armani jeans and there are folks also who look fabulous in their worn out garments. In fact, according to Hollywood star, Scarlet Johanson, “it’s not the clothes you’re wearing, it’s the attitude and the projection that matters, self-confidence is the best accessories you could ever wear on”. But of course, I didn’t say you won’t buy branded materials for the rest of your life (how could that be when you can afford to splurge on the latest classy trend, it’s a wonderful feeling also having Louis Vuitton tacking in your arms isn’t it?), but see to it that it is included in your budget and your purse allowed you to have them without sacrificing your next meal or your food allowance or your children’s tuition fees and avoid the perennial headache of mounting debts.

With these tried and tested tips, you can plan now your next step in budgeting that is putting another column, I call it “a dream column”, because that’s where I wrote my wants like “vacation”, “buy a new cellphone” or “buy a laptop”. Then patiently looked on my savings as the amount slowly escalating, anyway my “wants” can wait, I am in no hurry, I consider my “wants” as things that can be safely put in one corner because they are not really urgent things, I can still breath comfortably without them.

In planning to create your “saving machine”, it is good to welcome positive energy in your system. You must condition yourself to resist the excitement of having extra money in your account, do not be tempted to slash your saving allotment for unnecessary expenditure. There are only three basic functions to operate in creating a “money saver system”-determination, self-discipline and faith in God. If you have these abilities, you can surely make it, these three attitudes will take you further to life’s interesting and exciting journey.

But if these techniques and styles fail, do not lose hope; remember that in failing you can start reassessing yourself what are the things that contributed to failures. Through failures you can develop additional self-confidence and wisdom. Failures increase our desire to succeed. Success is in fact the product of failures.

According to David King’s book You Can Be Rich “We become what we constantly think about, whatever we have in mind it increases as days passed. If we think failures all the time we won’t get away with failing, but if we think success, even if it doesn’t evident in the horizon, we are sure to succeed”. Thomas Watson, founder of IBM recognized failures as a pre-requisite to success, he declared: “If you want to be successful faster, you must double your rate of failures, success lies on the far side of failures”. So start your plan now and give it a full blast once you start. You may add your own style in saving if you want.

Just put in mind the wisdom of great American inventor Thomas Alva Edison left to the world: when Edison tried inventing Electric bulb, he suffered 40 failed experiments that his co-workers, in desperation, finally gave up, but the great genius told them: Why giving up in simple failures? Now we know that there are 40 experiments that won’t work so we have to eliminate them and try new approach”. Eventually, his tough attitude paid off and was credited for inventing the first Electric bulb.

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