Stop Throwing Away Your Money

I wasn't born with a silver spoon in my mouth. I was born in a middle class family where both my parents were wage-earner. My mother was very good in handling the family budget. She was able to stretch out the money handed to her by our father. The money which supposedly will last for only a week lasted for over two weeks. Of course, it could not be avoided having debts in sari-sari store but unlike other families in our neighborhood, we were considered as the best-paying debtor.

I remember when I was in grade school, I am used to having 2 pesos as my 'baon'. With that amount of money in my pocket, I was able to buy one orange flavored ice candy or a chocolate one paired with a 50-cent worth of junk food, not a very healthy one (pero solved na ako nun). Everyday, I usually have 50 cents left in my pocket. I collected it for a week and earned 3-5 pesos which I used to buy toys in school (rubber bands, cards, paper dolls, jolens, chinese garter, yoyo, etc). Or sometimes, instead of asking money from my mother I used it to buy school materials like bond papers, writing pad or pencil.

My mother never lectured me with words on how to spend every penny but seeing her actions taught me otherwise. I was young but then I already have this young urge to be frugal. And what drives me? Because I want to help my parents in some little ways I could.

What do I want to point out here anyway?

I heard it usually from elders. I often read it in financial advise forum. That most of the rich people now were not born rich, they are made.

How do they become rich?

They are in action to save up. They value every penny. They stop throwing away their money. They spend it on investments. They plan their budget. They do not splurge themselves with unnecessary things. They cut down credit cards. They have goals. And they have the drive to reach that goal.

When it comes to saving, the hardest part is getting started. Being one that earn thousands a month but got tons of monthly expenses, it is very hard for me to start earning. Honestly speaking, I have a personal account (apart from the payroll account I have) but I wasn't able to maintain the required ADB for that. Very ironic for someone who talks about spending wisely, huh! Here, at least I spent my money on important things and in what ways, that's a different story.

You are not a big time earner but you want to save up a little? Here are some ways you can adapt:

1. Make a list of your monthly expenses. Or better if you cut it down to two-week expenses if you have bi-monthly salary to come up with a realistic list.

2. Set a budget amount. Say your expenses should not exceed 60% of your income. If it exceeds, check out your list then erase those that you can do away.

3. Make sure to include in your budget list at least the 10% of your monthly earnings. When you include the savings into your expenses list, it feels like this is just another expense and not savings.

4. If your budget is tight and you cannot afford to save up the 10%, then develop a habit of going piggy bank. Make sure you always feed your piggy bank any amount each day. Just set the minimum to PHP5.00. Or you can also stash away your crisp 100 peso bill somewhere in your wardrobe or have it pile in between your books or notebook. Before you know it you have already earned an amount which you could use for future purposes or emergency situation.

5. Find ways to make extra money. There are lots of networking out there that will not require you to put up capital. All you could do is register your name, pay for an ID and a brochure then develop a selling skills. You may not earn big time from this especially if you're not that dedicated to their marketing strategies but you could earn 500 to 1000 pesos a month. That's already an add up to your finances.

6. Try to cut down grocery and food budget. Plan your meals in advance. Whenever you go for a shop, make your grocery list and shop with the list. This way, you can avoid buying things not on your list. Buy things on sale but make sure you buy things that you need. It is also good to buy household things (such as laundry powder, fabric conditioner, toothpaste, feminine wash, etc) in bigger sizes. It would save you time and money in the long run.

Always bear in mind that in buying you have to think of two things: Wants and Needs. Ask yourself, do you really need it? Otherwise, do not buy it. Go for things that you really need and not because you only want it.

7. You want to travel? Travel during off season. You can avail lower rates and discounted offers and still get the same excitement and enjoyment of going places. You can also go camping instead of staying in hotels - more fun, more thrill and much more adventurous.

8. Lots of old clothes but still wearable? You can have it on garage sale. Who says you cannot earn money from old stuff?

9. Trim away credit cards. One credit card and you can still survive. Select a credit card that offers great deals yet lower annual fee. If you want gadgets, opt for items that can be bought using your credit card's installment mode. For BPI, they have S.I.P (Special Installment Plan), for HSBC, they H.I.P (HSBC Installment Plan). I advice to transfer your regular balance to your installment balance (I guess applicable only in BPI). This way you don't need to spend big amount at once plus your regular purchases will be controlled.

10. Have a goal. Why do you want to save? Work out and reach that goal.

With these tips, I am not saying you have to tighten your belt, starve yourself to death or deprive yourself. It is good to splurge yourself once in a while but make sure not to over do it. When you've accomplished something and you feel like congratualating yourself, go out sometime, shop for things you want, celebrate and still be in controlled.

Here is a frugal thought from Benjamin Franklin:

The way to wealth is as plain as the way to market. It depends chiefly on two words, industry and frugality: that is, waste neither time nor money, but make the best use of both. Without industry and frugality nothing will do, and with them everything.

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