7:40 AM

One of the common goals for the New Year is something related to money. It could be saving more, spending less, paying out debts or investing. In most families, mine included, it’s the mommies/wifeys who handle financial matters. I have learned a few things along the way and I thought I would share it with you. This is mostly applicable if you are starting out or in really bad shape in the area of finances. The tips maybe “old school” but please read through as you may find new ways to apply those in your life.


You have seen this in most, if not all personal financing essays and it’s because there’s no way you can handle finances without knowing how to budget. Have you ever experience checking your bank accounts and wondering why you money all gone? I may not be able to answer that but on things for sure, the money was spent. That is the nature of money, it always gets spent. One common mistake we all make is letting our money go without our control. It is our responsibility to tell our money where it should go and we do that with the budget. Budget is about assigning our money on where it should be spent: food, rent, utilities, savings and others. This way you allocate your money and you know when you have the budget for shopping. You know when you can afford shopping. When making a budget, remember to create buffer. Do not squeeze the necessity just to make room for leisure or shopping. Be realistic and prioritize needs over wants. Most importantly, set aside savings first before even starting with budgeting the expenses.


Now that the budget is in place, it’s time to live with it. What good is a budget if we do not follow it? Here’s a hack on how to stick to your budget, the Envelope system. This means assigning an envelope to a particular budget item like food, groceries and utilities and putting the allocated money on it. What? You mean withdrawing everything in the ATM and using physical cash? Yes. I understand, I know everything’s cashless now and ATM is very convenient. But hear me, the main reason we went out of control with our money is because of those plastic cards called ATM card. Debit card or Credit card. When I still use my cards, I am so much unaware of my remaining balances and always wonder where my money goes whenever I checked online.  But when I switched to cash only payment, not only that I’m aware of how much do I really spend,  I think twice before even buying anything because it is more emotionally painful to see my hard earned cash  departs  from my wallet. Try it! When you see the money in the envelopes gets spent, you tend to spend it mindfully forcing you to live within your means.  This system works so much for us. This is an oldie but goodie trick!


 If you have it already, good for you. If not, read on. Let me tell you, one of the most budget wrecker is emergency and not matter how much you prepared for it or avoid it, emergency just come your way. Something broke down, someone got sick, emergency! That is why it is important to establish emergency fund first and fore most. Emergency fund is an equivalent of three to six months of spending, set aside as purely cash and available for use anytime. But what if you have debts and having a hard time making both ends meet? The more it is important to build the emergency fund. The more you have a negative financial balance, the more emergency will lead you to further debts. So build this first. In this case, David Ramsey suggests building Starter Emergency Fund equivalent to USD 1,000 as fast as you can. To be able to do this, you may want to get a part time job, or sell some of your stuffs that you no longer use, or took more overtime work. Whatever it is, do something to build the emergency fund.

I Hope these money tips can help you. Do let me know in the comments if you have questions or if you have other money tips that you can share to the fellow internet friends. See you in my next post. 

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