Have you ever felt like your money was unlimited?
So why do we sometimes spend like it is?
Here’s a secret: you don’t have to go through payday pain every single month. For real.
As a middle-income human who struggled to balance adulting, having fun, and being able to buy all the things I need, I’m going to share with you three tips that helped me lots.
Disclaimer: I am not a financial planning consultant or money expert – just sharing easy starting steps for money management as a typical Filipino! Tip – start with the little wins before the big wins.
50-30-20 Budget Setting
Don’t worry, this isn’t math! The numbers here refer to how to break down your salary:
- Expenses (50%)
- Wealth (30%)
- Savings (20%)
Having this big picture allows you to cap how much you spend, grow some of your money into a bigger pot for the future, and give you assurance as an emergency fund.
Why more money for Wealth and not Savings? Because Wealth is like an investment and it can grow your money faster than Savings can. If you’re up for a challenge, decrease the amount you’ve set aside for Expenses so you can invest or save more!
And don’t spend more than 50% on expenses. You want to keep the same standard of living you have now, or have an even better one, when you’re 70, not worse!
Small Savings Add Up
Don’t forget that as and when you can, you should cut expenses whenever possible.
Here are some #tipidmode tips you might want to consider:
1. Cut out the things you want but don’t need.
If you’re spending P150-200 a day on that expensive latte when there is a coffee machine in your office, you’re missing out on saving P4,400 (based on 22 workdays) a month!
If you have non-essential everyday indulgences like expensive coffee, bubble tea, cab rides, movies at the cinema or online shopping, review them and cut wherever possible as long as it doesn’t adversely affect your well-being.
Start with 3 expenses to cut or replace with lower-cost expenses, and you’ll gradually find it easier to cut out more. Replace movies with Netflix, or use the office coffee machine – these savings will enable you to focus on essential purchases, investments or savings!
2. Source for the best places to get your essentials.
Are you getting the best prices for the items you need? Buying secondhand on Carousell gets you great prices, especially when you’re handling expensive life transitions like moving houses or getting married. Instead of buying a brand new gown for the wedding you’re attending the next weekend, why not search for a dress on Carousell and help someone declutter!
3. Cashback and loyalty programs
Yes, it literally means that when you spend, you get cash back. FOMO now?
Shopback is an example of a cashback platform that partners with brands like Zalora, FoodPanda, Klook and more! They give back a percentage of how much users spent every time they shop with a Shopback partner. Example: Spend Php 500 and with 10% cashback, Php 50 will be returned to you! Even though the cashback amounts may seem small, they really add up!
You can also choose to use loyalty programs like Grab’s rewards program, which help you accumulate points that can offset future purchases. Did you know earning 675 points in Grab Rewards can give you Php 50 off a Grab ride?
Plan out big and major expenses
A type of major expense is traveling. Planning to fly to Korea or Japan for Christmas? Make sure you plan out booking your flights and hotel as early as 5-6 months before the trip in order to find good deals as these are the two biggest contributors when it comes to travel expenses.
Here are some important apps or websites that you can consider when monitoring lodging and flight rates:
- Airbnb – Airbnbs are generally cheaper than hotels, plus you can access more space and amenities compared to booking a hotel room. If you’re new to the place you are traveling to, you can even get local insights and experience from your Airbnb host!
- Skyscanner – this app allows you to search and scan flights from almost all airlines. It includes even budget airlines! You can also set a notification if the flight you are eyeing for is at it’s lowest price. Cool huh?
With these helpful websites to get bargain lodging and flights, you can allocate more to other travel necessities like food and wi-fi!
Don’t let payday keep getting the better of you.
Pace yourself when your paycheck comes in, cut what you can, and you’ll find that the money in your bank account keeps growing, instead of decreasing.