Savings and Budgeting Tips
Making a budget and following it are two essential financial habits. It is not always easy or fun at first, but it is important because it helps you plan and control how much money you spend in order to save up. So here are some simple and realistic tips for you:
1. Prioritize needs over wants
Every individual has limited resources or income to spend and their wants and needs are unlimited. Therefore you should prioritize what is essential for the time being like food and vitamins.
2. Reduce your expenses
Understanding your fixed and variable expenses is the first step to making an effective budget. Fixed expenses are bills that are the same price every month. Fixed expenses include rent, car payments, and internet. Variable expenses are costs that fluctuate, such as groceries or utilities.Apply now
3. Categorize what you spend your money on.
After calculating your expenses, categorize what you spend your money on. You can organize your expenses using columns and graphs. These categories can be as detailed as you would like them to be Then compare your income to your expenses. Your goal is to have more income than expenses. If you end up having more expenses than income, then you should find out where you can cut costs. Be sure to also include your debt in your expenses.
4. Increase your income
Once you have laid down all your expenses and everything is really necessary, then you must boost your income. There are a lot of things you can do: Make money with your hobbies, find a way to build a passive income stream, or turn trash into cash! Get rid of the things in your home that you don’t use, or that you’re willing to let go of for the sake of your financial future.
Don’t worry about how much you can save. In reality, you should be saving at least 10-20% of your income, but if you can’t, then start small. According to Randell Tiongson, RFP, you can start saving Php300 or Php500 pesos every payday or if you can’t, then why not Php100 pesos? You may need to focus on cutting down at least one fixed expense for a while. Once that payment is gone, you can start putting additional money into your savings.
5. Track your savings and investments
Track your progress to know where you stand. It’s important to keep track of what you are spending and what you are keeping. This will show you where you can make improvements.
Saving and budgeting can also help you avoid debt or keep you out of further debt. It all starts when you make a commitment to yourself. Robocash will keep you motivated with information, tips, and reminders to help you become financially strong.