These days, it’s important that we be cautious on our spending. Planning and proper spending should be your key ingredients in budgeting. Whether for personal, educational, or business financial needs, the formula on spending should be the same; it is to “Spend Within your Means.”
It is easier said than done, most people say. How to execute such exemplary financial formula is the big question. How do you start especially if you’re used to spending a lot? How or when or where do not matter anymore, what matters most is that you make that big step towards financial freedom. Here are some tips to guide you:
Cut it Out!
This does not mean not spending anymore. Of course, we need to spend so we can live. But the trick is you must be able to manage by cutting some of your items in the budget list. This is very easy when you find alternatives to what you’re used to do. You can walk instead of riding to places that within walking distance, dining in the house instead of dining out, recycling instead of buying new, watching movies at home instead of going to the theaters, and so many more. Your start does not have to be grand. A small and simple start will eventually turn into something big.
Save for the sake of saving and not save so you can spend
Most of us think that we need to save so we can have something from our pocket in times of need. True indeed; but you must allot a portion of your money for savings. This savings must be something that you will not spend for years of even a lifetime. If possible, it must be something that you will leave for your loved ones when you are gone.
Follow the 80-20 Rule
Sounds familiar with 80-20? This is the Pareto principle used in Business Analytics. But this can also be applied to having a good financial management. This means that whatever the situation is, you must leave the 20% of your gross earnings for savings. You will only spend from the remaining 80%. Try this for a year to realize how big your savings are.
Use your credit card – Do not be used by your credit card
Having credit cards is not bad. If you can manage not to have one then well and good; but if you can justify your need for it, then grab it. The secret here is smart management of your credit cards. Using this for emergency expenditures may be a good idea but what if there are always emergency situations? Better if you use your credit cards for utilities. This way, you can control your use for it.
The question “Where to Find Money?” is easy to answer. You can actually find money in your own pocket only if you know how to save and spend.
