Are you constantly stressed out about money? Do you face financial constraints every now and then? Do you want to change how you handle finances? Money related problems are common in different parts of the world. In fact, even those who are earning a good amount of money while working abroad also worry about their finances.
In some instances, this could be me. Or maybe, this could be you or someone that you know.
Yes, we could be one of those people who fret about personal finances. This means that it is about time to manage it and control it. By doing this, we will eventually get rid of any financial stress and all our financial problems will begin to decrease.
Isn’t it nice to finally sleep without worrying about bills and other spending? It is even nicer if we will have some savings which we can use to invest on something really relevant in the future.
So, if you are looking for answers on how to manage your personal finances, take a look at some tips that I have prepared for you. In the end, I am hoping that you will change from being a spender to being a saver.
Tips in Managing Personal Finances
Many are thinking that managing money involves a lot of paperwork and math. But in truth, it isn’t that hard at all. When done in the right way, it can actually help us improve our lives. We also need to accept the fact that whatever we do today with our finances can have a big impact to the future.
Do you want to know how you can improve the way you handle your finances? I have summed it up for you into five simple steps.
1. Change your attitude
This is the first thing that you need to do. Try to change the way you look at spending. Instead of being a frugal spender, you can actually be a frugal saver.
In truth, there are things that we do not need to buy. Instead of buying, maybe we can just make one or there might be something in the house that has a similar usage that we can utilize. Before buying, ask this question: “Do I really need this?”
Apart from that, remember to spend less than what you earn. If we spend more than our earnings, we will end up in debt. If we spend the same amount as our earnings, we will not be ready for certain emergencies. Hence, let us spend less so we are debt-free, we can save money, and we will be prepared for unexpected life crisis that may happen.
Miriam Caldwell says on her blog entitled 5 Keys to Successfully Managing Your Personal Finances that,
“The first thing you should do is to write specific goals about what you want to do with your life and your money
Change your attitude to start writing your goals. Don’t take that for granted, Writing goals is by far a very useful tool that wealthy people do.
2. Financially educate yourself
Learning about money will make you realize how important it is to manage it well. I suggest that you look into bank savings, investments, real estate, mutual funds, retirement plans, and many others.
Also, see to it that you know when is the right time to buy stocks and to invest. I encourage you to study more about credit cards, mortgages, and other aspects that will help you manage your money wisely.
3. Plan for the future
Picture that day when you are already retired from work. If you are like me who works abroad, you will surely want to finally have the privilege to just sit around and enjoy life after spending years and years of working.
But how can we do that?
Unfortunately, many people are not able to have a happy and satisfying retirement. Why? Because they failed to plan for that earlier in their life.
Hence, start doing it now. Create a retirement plan. Save money for the future. Be prepared for emergencies.
4. Learn to budget
Creating a budget is the first action that you want to make, you can start from there.
Budgeting is not hard. Well, it may appear challenging at first. But in the long run, you will get used to it and you will reap the benefits. I’ll tell you how you can budget your money in an easy way.
First, determine how much you are earning. Then, calculate your fixed expenses (includes bills) which would be 50% to 60% of your money. After that, allocate about 5% to 10% for your savings. Of course, you can still use about 20% to 30% of your earnings for guilt-free spending which includes dining in restaurants, buying clothes, and others.
If you do this, you will surely control your spending and you will have a personal saving. And for sure, you will benefit from this in the future.
5. Plan for your retirement
Apparently, the best time to prepare for your retirement is today. It is best to start saving or getting a retirement plan at the age of 25 than to get it at the age of 40. When you start while you are young, you will actually get more when retirement comes.
But if you haven’t started yet, you can still do it now- whatever your age is- because it is never too late to prepare for the future!
You can calculate your retirement saving plan with the retirement calculator below.
Retirement Savings Calculator
I know it is not easy to change our spending habits. But if we change our attitude and firmly decide to become a saver, we can actually do it. This is very important especially for expats who are still sending money to their families. We have to learn to handle our finances well so that when we finally go home, we can still enjoy the fruits of our hard work.
How do you handle your finances? Please share your thoughts below.