Budgeting Made Friendly

Are you a spender or a miser?

I’m more of the former. I admit it, I’m bad at budgeting. Just the mere mention of it makes me cringe (yes, I’m not a huge fan of numbers).

Worse, I’m an impulsive buyer. I’m a member of the ‘One Day Millionaire Club’. And in time…gadgets depreciated, clothes tattered, and stuffs wasted. And I ended up saving nothing. Poor me, I let hard-earned money slip away that easy. With all the hard work, I’m penniless. How ironic.

But that was before. I’ve changed now. I realized that I have to learn budgeting to avoid personal financial crisis. I know I have to start early or else I’ll be penniless for the rest of my life.

How did I start? First, I set realistic financial goals. I list down the things I want to achieve and possess. I made them my inspiration. Then, I listed down my income and expenses in the previous months. Next, I separated essential expenses (food, house, electricity, internet, transportation, clothes, and other bills) from impulsive. Looking at the figures, I have cut a considerable amount from my usual expenses. From there, I started a budget I can live with. I prioritized my necessities. Finally, I looked forward to the future. If there are upcoming events in my life, I include the expenses to my budgeting. That way, it will not destroy my goals.

I have eventually learned to make budgeting friendly. The friendliest (also the simplest) budgeting for me is the 20-80, where 20% is set aside for savings (or paying off debts, if any) and the rest is spent on all other expenses.

There could be several friendly budgeting ways out there. You just have to choose what works for you. Believe me, it’s a small step that can give you peace of mind and success.

Once in a while, I pamper myself, spend, and celebrate. But I will never revert to being a shopaholic. I’m not saying “I'm now a scrooge” but I'm definitely more responsible financially. I know my future depends on how well I manage my income. I hope more people will realize it too.

Go the Extra Mile in Saving

How much have you saved lately?

Thousands? Good. 
Millions? Awesome.

Unfortunately, not so many people are keen at saving for the future. The formula used by many is:

By using this formula, most probably, the result would be minimal savings if not zero. Sad but true. 

How much should you have saved if you were not overspending?

Try introspection. If you were not overspending on wants and whims, how much should have been your savings?

Overspending and other wealth mismanagement habits are the culprits that make life financially miserable. If you keep committing the same mistakes over and over again, you will end up failing the same way too. These financial mistakes are there to serve a lesson. Hence, try to learn the lesson at the earliest possible time.

Truth is, for a surefire way to save, try this formula instead:

Financial Freedom - How are you getting there?

Each of us has the ability to build wealth. But the important question is: Are you giving it a GO or a NO?

If you want to create a change in your life, including financial freedom, DO SOMETHING. Do not expect wealth to come like a rocket (unless you win the lottery). Drop vices. Pay off debts. Slash guilty pleasures that are drilling holes in your pocket. Save more. Invest even more.

The modern world is pushing you to the quagmire of commercialism and materialism (Have you not noticed it yet?). Be smart enough to distinguish what you need from what the market thinks.

Aside from answering the ‘how’, more important is to know the ‘why’. Even if you know how to be financially liberating if you have no explosive desire to pursue it, it will not make sense at all. You have to have that powerful reason and conviction to free yourself from worrisome pecuniary woes. 

Do not let financial trouble control you. Instead, take control of your financial trouble. Change your mindset. Change your thinking. Come to think of it, you do not deserve a pathetic life full of debts and piles of bills that are hard to pay. You deserve much better.