This video is especially helpful for those of you who are just starting out with your career—or You’ve only been earning for a couple of years. But these tips are also useful for those who want to get better with money—Handling money, or Budgeting, and your relationship with money.
I’m sure everyone is in a different financial situation; we don’t all earn the same and have different responsibilities but these 5 tips are applicable to all people because
it doesn’t really matter much how much you EARN, but how much you KEEP.
Just a disclaimer, I’m not a financial expert, I’m just a millennial who’s also just learning as I go but I do think I’m doing a pretty decent job at saving so without further delay, here are 5 tips on how to get good with money.
- Track your expenses
I know it might be quite uncomfortable but TRACK YOUR EXPENSES down to the last centavo. I track my expenses by writing down all my spendings on my planner and doing a monthly summary on a spreadsheet (template here). Now I know, excel files aren’t for everyone. Here are some Bullet journaling ideas or you can use an app like Monefy and Money Lover. Do this for at least 3 months. Every month if you can manage.
- Cut back on expenses
Now that you have a clear idea on where your money goes, It’s time to identify the areas where you need to cut back on. I had to cut back on eating out, so I set a limit on how much I can spend on dining out every month. You can do a weekly budget or even an envelope system if you like.
- Try to increase your income (through side hustles)
If you’ve already cut back on your expenses and you still feel like you’re having a hard time saving, then it’s time to Increase your income. I am big advocate of side hustling. Having a small buy and sell business, or an extra job you can do a few hours a week. You can turn a hobby into a business, so you still enjoy it. Having a side hustle can really help your budget.
- Practice “Income-Savings= Expenses”
Before, when I get my salary, it would go directly to my cc bills, elec bills, phone bills, etc; and whatever was left, I just left in the same bank account. Now, when I get my paycheck, I immediately put a portion of that to another savings or investment account and made the remaining money work for my expenses. Forced savings as I’d like to call it because sometimes, we can’t trust ourselves to save after we’ve paid off all our bills.
- Pay off your debt
After you’ve done the first 4 things, start prioritizing paying off debt. Whether it’s a high interest Credit Card debt, an amortized debt, or you borrowed from a friend or family. It’s the best feeling getting that burden off you so you can move forward. If you can’t pay off the debt right now, at least have a plan on how you are going to pay it off and when. If you don’t have any ‘debt’ then this means paying your bills on time because those can also incur interest charges or late fees.
And those are my 5 tips to getting good with money.
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