“You see, in life, lots of people know what to do, but few people actually do what they know. Knowing is not enough! You must take action.”
– Tony Robbins
Money management is really easy. Most of the time we know what to do and the only time it gets difficult is when our emotions get involved in our decision-making. Sometimes it is just a matter of stopping some things we are not doing right and start doing things differently. It may be tedious at first but for sure, it’s empowering to be in control of our finances.
Stop complaining about how little you are getting. Oftentimes we blame a lot of our financial woes to how ‘little’ we are getting. Oftentimes we blame our employer for not giving us more than enough. Almost always we blame the government for imposing high tax rates that eat up a big chunk of our income. What we fail to realize is that these things are out of our control. What’s within our control is the way we spend and how we can earn more. I’ve heard this line far too many times: “Wala eh, kulang talaga ang sahod.” Well, so what? What now?
Start figuring out how to lower your expenses. The first step to know if your income is enough is to budget and track expenses. Find out where you spend most of your income and assess if these can be lowered. Without a list, we won’t know how we can lower our expenses nor if the income is enough.
Start looking for more sources of income. If you’re working in the corporate world, it is not true that your employer prohibits you from having more than one source of income. I’ve done talks with different companies and a lot of them allow their employees to have other sources of income as long as the extra job is not in conflict with the employer’s business and it does not affect your employment work. You can start a sideline business, or buy rental properties, which later on can also be a source of passive income.
Stop depending on credit cards or debts as ‘sources of income.’ Getting debt or credit cards these days is so easy. Using them is too convenient as well. We tend to forget that these are loans that we should pay back eventually. Using them without caution is digging your own financial grave. Having no plan to pay them can give you a bad name and make it difficult for you to get a loan when you really need to in the future.
Start being grateful for what you have and live within your means. We all want to have tangible proof of our success and show the world how our lifestyle has changed for the better. This is the reason why our expenses grow when our income grows. But there’s a limit to how we spend our money. One reason why we spend too much sometimes is that we tend to forget how blessed we are in our current state. The more grateful we are, the less we compare ourselves with others and the more contented we become.
Stop investing blindly. I’ve seen a lot of people investing without knowing where their money is going. This is the reason why many lose huge amounts of money either to scammers or carelessness in blindly following others. You have to remember, that is your hard-earned money and investing in something you don’t completely understand can be too risky even if the investment instrument is not.
Start investing with a purpose. Yes, returns are important when investing. But the end goal of investing is of equal, importance. Why are you investing? Why do you want to get this much return? For how long do you want to keep your money invested? What investment instruments can I use to meet my goal? What strategies do I want to use to maximize my returns? Though I don’t mind if people start investing without purpose, but eventually they have to figure out answers to these questions to lessen the involvement of emotions during down times and increase commitment and conviction to your plan.
Jeremy Jessley Tan, RFP is a Registered Financial Planner. For questions on personal finance, email him at firstname.lastname@example.org. To learn more about financial planning, attend the 53rd RFP program on April 30-June 18. Inquire by e-mail to email@example.com or text <name><e-mail><RFP> at 0917-9689774.