Saving money is not easy but it can be done. You just have to have a purpose why do you have to save. Saving money can bring you to Financial Independence because you can create a Financial Plan for you to achieve your financial goals in life. Saving is your foundation to grow your money for your future needs because you will have an opportunity to invest.
Let me just share with you how I save money effectively. Don’t be bothered if how much money you can save at first because it is more important to create a habit. I use the idea of allocating my money to different categories every time I earn money, it is known also as Envelope System but with me I don’t use envelope, I use clear book which I create categories where I put money on its plastic pages. I just use paper and write what is that category and take notes of the date every time I put money on a particular category.
Here are some of the categories that I have in my clear book:
3. Life Insurance
6. Daily Expenses(Transpo,food,etc)
8. SSS Loan
10. License fees Savings
11. Load Expenses
12. Miscellaneous and others
Here is the clear book that I use and some of the categories that I have in my clear book. I take note of the money that I put to some of the categories so that if I reach a certain amount, I will transfer it to the bank, life insurance and to the mutual funds.
You can create your own categories based on your priorities and financial stage situation every time you receive your income. But for me, my priorities are Giving,Savings,Life Insurance,Investment and SSS Loan. Everytime I receive an income from the Lord’s blessing, these are the top 5 that I have to prioritize first. I stick to my budget plan,it is really different if you spend only within the budget. I find it addicting to challenge myself to be frugal most of the time. I live a simple life and I prefer not to buy branded items but at the same time I feel happy and enjoy life as well. My budget allocation can be adjusted if I have short term goals that I need to buy or if I have emergency expenses. Some of the categories will be lesser because it has to go to other categories but I never sacrifice my Top 5 priorities. The percentages of my top 5 priorities from my income ranges from 10%-12% each.
You can do this as well because you will know where your money must go before you spend. You will notice when you start a habit of prioritizing saving money first,you can now also allocate money for your life insurance, and investment. You have to understand that when you receive an income,it is wiser to focus on assets than liabilities.You have to grow your networth, it is not really how much we earn but it is how much we save and invest. You are your own corporation, where your money goes can make you bankrupt or prosper in the future, so if you have not started to create a habit of saving,it is the best time to start soon.
Thanks for reading my blog.