Saving, spending, or both? How to effectively save money has always been a hard question to a lot of people. While #YOLO (You Only Live Once) is trends more recently on social media, we learn from books that the future depends on what we do today. Although none of us know what would happen tomorrow, we all want to secure a peaceful and carefree life in our later years. Here are some tips to save money while you enjoy life:
1. Understand family spending habits
You have to be clear about your family's source of income. Before you decide whether to save money or to spend more, first you need to understand the spending habits of your family members. Make a plan and check how much you spend weekly. This will help you find out which expenses you overspent on to adjust your spending properly. Checking only once a month is not effective enough as at might be too late to realize if you've spent far more than planned.
2. Think twice before you shop
There's nothing wrong with thinking twice before making any purchase. For instance, buying a car is not a one-off deal, especially when you choose to pay in installments. Fuel prices that go up and down, parking, maintenance fees, unpredictable expenses for repair... Are you able to handle the extra amount you have to budget for that are not included in the price tag of this new car? Think twice.
3. Learn to say "no" to unnecessary expenses
You'll need clear short-term and long-term goals that help you allocate your expenses appropriately. For example, if you plan to send your child to study abroad, you should start reducing costly family activities such as dining out in expensive restaurants regularly, buying expensive brands... You'll discover there are other fun choices that are more affordable like watching netflix at home and ordering food from your friends online! (#supportlocal) You may also check out this article that tells you what you can do to get most while staying at home without costing a lot. Keep your goal in mind, and you'll be able to manage your expense within the budget by making these small changes in life.
4. Savings for each specific goal
In addition to a general savings plan, there are options like buying savings insurance or setting up multiple savings accounts that help you with your different goals. Every month, you deposit a certain amount of savings into the fund and the money will grow over time. Remember that you can start a separate plan for each of your specific goals. For example, an account to spend for traveling in Europe, an account to save for child education... By doing this you are making sure you don't miss any of your goals, and that you will be able to keep track of the progress you make.
5. Plan for incurred expenses
This sounds contradictory, but it's essential. To manage your family finance effectively, you set aside an amount for expenses incurred during the month. Calculate and keep your compulsory expenses such as electricity and water bills in record. After deducting your compulsory expense and your saving goal from the overall income, you'll have an idea of how much you could spend at most for the month. If you already have an amount of money to spend, you won't need to touch the savings in your account.
Now that you've learned a bit more about tips to save money, it's time to take action! Pay a little more attention to your daily habit and start with making small changes. Sit down, spend some time to plan ahead taking both your earnings and spendings into account.
Source: www.manulife.com.ph
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