The sooner you start the better the payoff. Here are some beginner budgeting tips that will make saving fun and worth it.
Related: Money Talks And Practicality: Why Passion Is Still Hard Work
According to the latest study by e-commerce aggregator iPrice Group, Manila is considered one of the most expensive places to live in Southeast Asia with an estimated cost of living at P50,798—just behind Singapore, one of the richest countries today. Due to high rentals and low average salary of P18,000, for a young professional who’s still learning the ropes of adulthood, this can come as a bit of a culture shock.
From paying your own bills to trying to make ends meet in a pandemic, there is no time better than now to start learning about financial independence. The term “budgeting” simply means keeping track of what is coming in and what is leaving a.k.a income and expenses. The goal here is to have a budget surplus where your income is greater than your expenses by the end of each month.
Budgeting is an intimidating task to do and if you’re someone like me who’s can’t keep away from the check-out button online, here are some beginner-friendly tips to start your monthly tracker.
Write or Type
A thorough and easy-to-follow tracker is the foundation to a strong financial future and there are numerous ways to do it. Most prefer an excel spreadsheet but as someone who is visual-minded and hates any type of math, I prefer bullet journal budget trackers. Simple to customize, easy to use, and makes budgeting more satisfying to do.
There are also several apps available online that do all the work for you. Just type in all the information needed and it will break down your spending through monthly charts that reflect how much you’ve spent on each category.
Be Realistic
The “50/30/20” by Harvard bankruptcy expert and US senator Elizabeth Warren is the basic rule of thumb when it comes to budgeting. It states that 50% must be used for needs such as rent, phone bills, or groceries, 30% for wants like the new pair of shoes you got on sale, and 20% must go towards savings and investments. This will help you cut back while allowing you to experience guilt-free spending.
If you’re still slipping up with your money, setting short-term and long-term goals will help you stick to it. Let’s say in the next 10 years, you want to afford a car or for this specific month, you want to put money into an emergency fund, writing this down on your tracker will motivate you to get it done.
Test It Out
Budgeting is on a person-to-person basis. To figure out what works for you, lifestyle and financial YouTuber Elena Taber recommends compiling 3 months of your income and expenses first.
Sorting through this gives you a clearer version of your monthly needs and wants, thus a more realistic budget you can set for each category.
Be Nice
Last but not least, don’t beat yourself up every time you reach for your wallet. Keep an open mind, if you’re strict budget isn’t allowing you to reap the benefits of your hard work, check which category you can loosen up a bit. If you overspend on one month, compensate for it in the next.
Your attitude towards spending is as important as the money you save. At the end of the month, if you manage just to break even then you still deserve a pat on the back!
The post Budgeting In Your 20s: How To Start Saving With Your First Job appeared first on MEGA.
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