budgeting 101 (2)

I’d like to share these budgeting tips that I do when I receive my allowance. I hope this article can help you in managing your hard earned income from your job.

PAY YOURSELF FIRST. I think you are like the previous me, or may be not (I may be too assuming if you are not like me before…). Before, when I receive my allowance, I would subtract all of my expenses first and after that was savings. HOWEVER, it is wrong. IT IS JUST WRONG. Why? Because YOU WORKED HARD for it but you will PAY YOURSELF LAST?! Come on, where’s the logic behind? It’s just not right. So next time you receive your salary, be KINDER to YOURSELF.

INVEST YOUR SAVINGS. Whatever you put aside for yourself is your savings. Now, majority of us will put that savings in the most safest and conservative place – in the bank! Having a savings account is not bad – not bad at all. Having some amount of money that you could pull something out is better than nothing during times of financial trouble. But, did you ever consider that that money in your account will lose its value in time? Yes? No? YES!

Let’s say you’ve managed to save a hundred thousand or even a million pesos it will never be the same after some period. Why? Have you heard of the term INFLATION? Inflation is the increase of prices of commodities and services that eventually decrease your money’s buying power. Now that you know this, think where you can invest your hard earned money for it to grow. Invest it in a vehicle which suits you. It may be in stocks, funds, or even find your part-time business. But before you invest, you have to study and learn everything you can before you make that choice.

PAY YOUR DEBTS. Nowadays, it is not strange that people are mired in debts due to increasing living standards but shrinking economy. But, a debt is debt that we have to pay. But don’t be too hasty in trying to pay all of them at once or else… Instead, program your payments. Try to negotiate with your loan and pay it regularly. Try to pay the one which has the highest interest first and pay everything else the minimum. Then, after you’ve paid that debt in full, add that to your next payment on another loan. This way, you’ll wipe out your debt. But, you have to be painstakingly patient and disciplined if you want to be debt-free in no time. Prioritize your loan payments, thru this you can sleep with less worries at night.

EXPAND YOUR INCOME. I don’t recommend that you find another part-time job. If you do that, you’ll just dig your grave faster than ever. Plus, you’ll be taking away more of your precious time to spend with your family, friends, and even for yourself. People need to rest as machines and gadgets also take a time out. Just what I said (written) why don’t you find a part-time business? Start one until you can now while we are still young. You should seriously start owning one today while you can still infuse capital in it little by little thru your salary. Run that business without quitting your daytime job. Remember, what you earn in that business is already your profit which will make up your fortune in the future.