Many of us are having trouble managing our personal finances mainly because we don’t spend time organizing that aspect of our life. This is because of our busy schedule and many temptations around us. Admit it: it is fun to spontaneously spend your money and enjoy your life without worrying that much. Going shopping whenever you want or traveling impulsively has more appeal to us. Nevertheless, it is vital to spend time organizing our personal finances—not only for ourselves, but also for our family, so it has a profound impact on our lives.
Here are some tips on how you should organize your personal finances.
Set a saving goal. Saving is very important to each one of us. You will have a sense of security, especially in terms of emergency. As the saying goes, “Save money and money will save you.” Always forecast how much you want to save first before computing your expenses. Spend time forecasting how much you want to save in five or 10 years. You will be able to know how much you want to save on a monthly basis. In addition, having a saving goal will help you motivate yourself to save and be more disciplined.
Make a plan on how you’ll track your expenses. You have to keep track of all your expenses on a monthly basis. You can use a notebook, a Microsoft Excel file, or a mobile application for it. There are some easy-to-use mobile applications such as Wally, Goodbudget and Moneyfy. You don’t have to limit yourself; just get an idea of what you spend cash on during any given month. This will serve as your guideline to evaluate if you are spending too much for expenses like clothes, travel, or dining out.
Be honest with yourself. Sometimes, we overdo or become too idealistic about our ideal spending habits or saving goals that we end up just spontaneously spending our cash. This happens frequently and I am also guilty of this. The solution is simple; just be realistic about your priorities and things you cannot afford to lose.
You do not want to lose things you love doing like your hobby. After all, you still have to enjoy what you earn because you worked hard for it. All you need is to reflect and evaluate yourself. You can do this on a monthly or quarterly basis. Nevertheless, you should teach yourself to be disciplined, especially in avoiding spending too much on vices.
Personal financial management is a skill developed over time. You cannot have a skill in an instant. If you think that you are a neophyte, don’t rush things and never stop learning. You can find more interesting techniques in personal financial management as you go along. At least once a week, read or watch Youtube videos about money matters to keep you inspired organizing your personal finances. Always remember that managing your personal finances is like managing you future and that of your family.
Luis Tan Jr. is the marketing manager of MoneyMax.ph, a financial comparison website aiming to help Filipinos save money through diligent comparisons of financial products.