So you’ve graduated. Top of the class, in fact. And you’ve managed to secure yourself a job. Sure it doesn’t pay you tens of thousands, but it’s a pretty good start for a fresh graduate. You work hard to make sure you have enough to spend on food, entertainment, and other leisure activities. If you are dating, you also need to make sure you have enough for date nights (doesn’t matter if you’re a guy or a girl, sometimes you should pay for date nights and treat your other half). Not to forget those education and car loans you have to pay off. If you and your partner are going steady and you are talking about marrying in the future, you will soon need to start worrying about getting a house.
Is life getting a lot more tougher than you thought? Who knew growing up would be so difficult? I guess it’s because not many people warned you about that when you were still in school and even if they did, you were too busy enjoying your life and living in the moment instead of fretting about the future that still seems so distant. Don’t feel guilty, you are not alone in this. Good news is, it isn’t too late to start planning and using your money wisely. And you don’t have to learn about the stock market exchange and investment schemes to increase your savings. It all stems from straightforward habits that you can incorporate in your daily life.
Here are some very simple and practical tips to get you started.
Tip #1 Use an App to Monitor Your Expenses
When you’re earning a sum of money every month and you automatically draw your wallet out of your bag to pay people every day, it’s easy to lose track of what you spend your money on. By the time it’s the end of the month, you’re scratching your head to figure out where on earth all your money had disappeared to.
The easiest way to solve this is to download an app to monitor your income and expenses, and I already have the perfect suggestion. T2Expense is a professional money manager equipped with plenty of features to note down your transactions, organized according to separate accounts and users. You can view your starting balance, ending balance, total expenses, total income, and balance due for every day, week, month, and year. Not only that, you can even view your finances in pie charts and bar graphs for easy reference and comparison. Best of all, this app is hundred percent FREE. There is a Pro Version which upgrades your app to be ads-free, and enables you to export financial reports to your PC and be opened via MS Excel. However, this upgrade is not completely necessary and the free version is already more than enough.
Tip #2 Plan Your Budget Carefully. Stick to It.
A budget is extremely important to make sure that you don’t overspend, especially on things that you may not really need. In order to set your budget, critically examine your expenses for the past 3 months according to certain categories such as food, fashion, entertainment, household items, and etc. Then decrease it by a certain percentage, say 10 or 20 percent, and set that remaining total as your budget for each of the respective categories.
That’s the EASY part, the hard part is making sure you follow that budget every month. To do that, get a good friend or your partner to keep you accountable. It’s like going to the gym, it’s much better to exercise with a training friend than to do it on your own. You would be pleased to know that T2Expense also has a feature to set and monitor your budget. When you are about to blow your quota, it sends you an alarm notification to remind you of your limitations.
Tip #3 Be Honest with Your Partner and/or Your Friends
I know it’s great to be accepted by friends because you join them for all kinds of fun activities, but keep in mind of your financial capacity. If you can’t afford that pricy meal, be honest and take something light before meeting with your friends and order something cheaper. If you can’t afford the cover charges for that night club, either hang with your friends somewhere else or go home and do something else. Be frank about your financial status with your partner if you are dating, you shouldn’t feel the need to go all out to impress your date and give him or her a false impression of yourself. Good dates don’t need to cost a fortune anyway! You and your partner can still do lots of fun things together and stick to a budget.
Basically, be wise and choose your where or how you want to spend your money. It’s better to be direct and upfront than be trigger happy and be filled with regret when you go home with an empty wallet. Real friends should understand and not judge you for your choices. If anything, they should be supporting your mature decisions.
Tip #4 Be Observant and Curious About the Value of Things
In order to know where you stand in terms of your savings, you need to know the value of things. Do you know how much do groceries cost? How about a car or a house? You will not understand the importance of money if you are not conscious about the cost of living.
Think really hard about what you want in life, what kind of future you envision for yourself, all those might cost you a pot of gold; but once you’ve set your eye on a target, you can slowly work towards that goal since you know the value of your goal.
Tip #5 Hide Your Money Somewhere Out Of Reach
You need to protect your savings from your biggest enemy – yourself. Open a fixed deposit account, stash your savings there and let it accumulate interest. The rule is simple: you cannot, under any circumstances (well obviously, be smart about this, just use it for MAJOR emergencies), touch your fixed deposit savings. Every few months, transfer your savings into another fixed deposit account and keep all your FD accounts strictly off limits.
The amount of money that you decide to transfer to an FD account every few months doesn’t matter. It could be as much as a few thousand or even as little as a few hundred. Before you know it, that sum of money that you put aside will grow into something useful in 10 to 20 years time and could really help you out on a rainy day.