I want to share with you some tips to spend less and save more because once upon a time, I was terrible with money. I was living from paycheck to paycheck. I didn’t live in lavishness, but for some reasons, I just couldn’t track my expenses. I was always struggling to make both ends meet every month, and there were times that when worst comes to worst I would borrow money from my parents, which I never paid. Yikes! I had no decent savings, I had no insurance, I had no emergency fund. Zero, but I always had debts to pay. It was so stressful.
Then, I knew that I needed to do something. I started to change my behaviors to be wiser with my finances.
This 2019, I promised myself to be waaay more financially responsible. If you’re just like me who ends up running out of money before the pay period, here are my simple tips to spend less and save more:
1. SAVE FIRST THEN SPEND WHAT IS LEFT
One of the best money advice from Warren Buffet, the Forbes’ 3rd World’s Billionaire, is “Don’t save what is left after spending; spend what is left after saving.” This is commonly known as paying yourself first. This is the most important factor when you want to turn your spending habit into saving habit. You have to decide what percentage of your income goes to your savings and you have to allocate it into different baskets. For instance, if you decide to put 10% of your income, then you may appropriate 5% for your emergency fund and 5% for your investments. You have to do this as soon as you receive your salary.
2. LIST ALL THE FIXED EXPENSES AND HAVE SEPARATE ENVELOPES FOR EACH
This is what I do, I list all my fixed or recurring expenses like rent payments, utilities, insurance premium, monthly installment, etc. in an excel file. These expenses are my priorities because I don’t want to get kicked out of my place. No one does, right? Then, I have separate envelopes for each expense. Once I withdraw my salary, I put the corresponding budget into each envelope. In this way, I can properly practice the priority setting, I won’t miss any payment, and I won’t overspend.
3. RE-ASSESS OTHER EXPENSES
It pays to check other outflows because most of the time the problem lies in here. Here are other tips to spend less and save more:
a. Bring baon or eat at the canteen.
Since I live away from home, no one prepares breakfast for me, so I used to have it at Jollibee, Mcdonalds, or Starbucks (amfeeling). And I would always end up spending more than what I supposed to for that day. So what I do now is before leaving my place, I make a sandwich that I can eat at work.
It sure is tempting to eat out a lot especially if your office is near a shopping mall, yes? Yes! I can actually save a whole lot whenever I have baon or just dine at our canteen, nonetheless.
b. Downgrade mobile postpaid plan to cheaper one.
I mean, do I really need to pay 3,000 pesos monthly for my plan? So ask your service provider for some cheaper options!
c. Do monthly grocery instead of buying in retail.
Because I do actually save more when I buy in bulk.
d. Don’t get a gym membership if this will just be skipped out.
I did this before and I was very determined during the first few weeks, then I got too busy until I realized that I just wasted my money on it. There are actually other free exercise options like watching free tutorials on Youtube or Instagram and working out at home, or running at the Ayala Triangle or at the Capitol Commons or in BGC.
e. Request to waive the credit card’s annual fee.
We pay for the annual fee because we’re using the card. Does that make sense? No. At least for me. There are two ways to do this: (1) call the bank and request them to waive the annual fee. You don’t need to worry about them rejecting your request if you are a cardholder in good standing; (2) however, if you have been of a good repute but the bank still declines, then you have to play your ace. 😉 Threaten them that you’re canceling the card and getting other bank’s credit card.
Caveat: You have to make sure, though, that you have another credit card just in case they’ll really cancel your account. Lol.
4. SHOP ONLY WHAT IS NEEDED
Avoid unnecessary and impulsive shopping frenzy. Ask yourself first, “Do you want it?” Yes! “Do you need it?” If you really don’t, then you may follow this Thought Catalog post where it suggests to wait for three days, and then, and only then acknowledge the need to buy it.
5. DON’T USE CREDIT CARD
Just don’t, especially when you know you can’t pay for it on time, because banks charge a hefty amount for late payment fees and interest charges. You don’t want to be buried deep in debt, do you? It’s always better to pay with your cash; in this way, you are also forced to buy the stuff you only need.
6. USE POINTS WHEN PURCHASING
Take out your Tita‘s cards like your BDO Rewards card, SM Advantage card, Mercury Suki Card, Puregold Perks Card, etc. Don’t let your rewards points go to waste! Use it instead of paying cash.
7. LEARN TO SAY NO
It might be luring to go out on Friday nights with your amigas, but learning to say “No” especially when you have a budget to follow is the way to go!
8. INVEST ONLY IN SAFE INVESTMENT VEHICLES
“Gawing 5,000 pesos and 1,000 pesos mo sa loob ng 3 araw”
Sounds familiar and tempting, right? But you have to protect your hard-earned money by all means. Stay away from all these scams you see on social media. Aren’t you wondering how do these schemes pay the members when they don’t even sell any products? They earn through referral–members get earnings from every recruit who pays for a certain fee. So what happens if the members stop recruiting? You’re all doomed, including the money you worked hard for. Avoid these fly-by-night companies, and put your money into more secure investment vehicles like stocks, bonds, and mutual funds.
Building solid savings, gaining wealth, and improving the spending and savings habit is one, long, big journey. And as one Chinese proverb says, “a journey of a thousand miles begins with a single step”, yes? Yes! So, we have to start working on our habits NOW or nothing will ever change.
These are some of my tips to spend less and save more, you can adapt it all or you can have it tailor-made according to your personality or needs. What’s important is you have to have a game plan and stick to it!