Is it possible to live in the moment while planning for the years ahead? It may seem like a paradox, but by exerting some effort, you can make changes today that align with your vision for your future.
To learn how to save money, sit down and think about your goals. If you’ve been saving for travel funds for that much-awaited trip in the next few months, then you’re focused on a short-term financial goal. This is a specific and achievable target within a short time frame. Meanwhile, long-term financial goals typically span years and involve strategic planning. Examples include saving for retirement or investing in a home.
Saving requires both kinds of goals–enjoying the present and preparing for your old age. You can start by mapping out your financial objectives and deciding to boost your savings. Write down your plan. Say it aloud. Express your commitment to your goal, promising you’re in it for the long haul.
A budget is essential when you want to save big time. It’s a plan that helps you manage your money by outlining your income and expenditure and identifying your bad spending habits. A budget’s goal is simple: to ensure you’re not overspending. By adjusting your spending behavior, you can save enough to accommodate your monetary goals.
Here are some reasons why saving is essential:
Now that you know it’s crucial to save, it’s just as important to live your best life in the present. Finding joy in your earnings can make your life more enjoyable and fulfilling. But how do you balance saving for the years ahead and taking pleasure in the fruits of your labor? Here are some tips:
Take advantage of free and affordable admission
Most public spaces like parks and historical sites offer free admission, significantly reducing expenses. You don’t have to shell out anything to explore Chinatown in Binondo, marvel at the sunset in Manila Bay, or discover breathtaking art at the National Museum. Meanwhile, must-visit cultural spots like the museums and sites in Intramuros charge entrance fees of less than 100 pesos.
Soak in nature
Going on a nature adventure doesn’t have to be pricey. Walking, hiking, biking, and enjoying a picnic with friends and family are all fun yet low-cost options. What’s more, discovering the great outdoors is good for your health! According to the American Psychological Association, spending time in nature boosts attention while reducing stress, promotes a better mood, and fosters empathy.
Be a home buddy
Sure, it’s fun to go out with friends, but staying in can be just as fun. Try a potluck party or a movie night. With home parties, there’s more flexibility in terms of entertainment options minus the additional charges from a venue. Also, home get-togethers create a cozier and more personal vibe, allowing you to hold intimate conversations with your guests.
Make it DIY
Small, daily expenses accumulate, so it pays to do things yourself instead of settling for products and services. Eating out often can make a dent in your savings. Consider cooking meals and packing your lunch before going to the office. Used to buying coffee every day from a fancy café? Brew your cup each morning, and you’ll be surprised at how much you save. You can even step out as a proud plantito or plantita by growing your food!
Be a planner
Most of the time, unexpected expenses happen because of a lack of planning. Though we can never know the future, we can increase savings when we prepare. For instance, meal planning lets us budget our time and food expenses. Planning your activities also allows you to avail yourself of early-bird discounts while avoiding impulse buys.
Creating a budget sounds like such an adult thing to do. But it’s a must if you want to start building a solid future for yourself early on. There’s no better time than now to dive deeply into your finances and take better control of them. To guide you, here’s a step-by-step guide to budget preparation.
Step 1: Map out your financial goals
List what you want to achieve with your savings and divide them into short-term and long-term goals. This helps you prioritize and set specific objectives. Short-term goals involve urgent needs and require immediate spending. Meanwhile, long-term goals address more general aspirations in the future, entailing sustained and bigger efforts.
Step 2: Evaluate your earnings & expenditure
What’s your financial state like? Gauge this by collecting records like pay slips, bills, and bank statements. Include all your monthly income sources, including bonuses or side hustles. Then, track your monthly spending into fixed (rent, utilities, debt payments) and variable (groceries, eating out, entertainment) types.
Step 3: See where you can cut costs
While fixed expenses are non-negotiables, the variable ones are where you can play around. Identify areas that you can reduce. Impulse shopping, nightlife, cinemas, and hobbies all eat into your bank account. Taking a step back and seeing your expenditures’ bigger picture will help you better understand your spending habits and formulate an efficient budget.
Step 4: Compute your savings
Are you saving enough? Remember that your savings include what you set aside from your salary, investments, and other financial instruments. How much of your monthly income should you save? A popular rule is the 50-30-20 method, wherein you allocate 50% of your earnings for essentials, 30% for wants, and 20% for savings.
Step 5: Monitor and adjust
Being vigilant about your spending behavior can boost your budgeting efforts. Life can be unpredictable, resulting in job and lifestyle changes, so remember to adjust your budget as needed. The most important thing is to keep at it. Pretty soon, you will see your savings account grow. It also helps to explore different banking products like savings accounts, time deposits, and remittance accounts if you’re working abroad. These allow your money to grow, improving your overall financial security.
We all know that saving is crucial, but enjoying your earnings also improves your quality of life. Reaping some of the rewards of your hard work now increases motivation and productivity and is a form of self-care. It’s a challenging balancing act, but by savoring the moment and keeping an eye on your future, you can live your best life.
Do you want to get started on your future? Chinabank offers simple savings and investment choices that can guide you in your saving decisions. Check out the different products that can help you get started, whatever your needs or goals may be.
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