Does it feel like your hard earned money just slips through your hands during payday? Do you feel like you’re not earning enough no matter how hard you work? It is sad to say that many Filipinos feel this way. However, the good news is that there is a simple solution to help you save more and prepare for the future.
The Magic of Budgeting
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Everyone knows what a budget is. Even the old man selling balut at night knows what it is and what it is for. It’s a pretty common concept yet, unfortunately, only a few Filipinos apply it in their lives. You can ask your friends or coworkers if they use a budget. You can also ask them if they stick to it – meaning they strictly observe their budgets. Prepare to be disappointed when you find out that not many use or even have a budget.
No matter how simple it may sound, making a budget and being strict about it will provide many life changing benefits. For one thing, it will help you find out where your money went. It will also be an eye opener showing you what your real priorities are. Finally, making a budget will help you save money.
Benefits of Proper Budgeting
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Proper budgeting can actually benefit Pinoy households in many ways, other than the ways that we have already mentioned above. Let’s go over a few more of them:
*Practice self-control*: Making a budget will help you practice self-control. You will be making a list of items you need to spend on and opposite that will be the amount you have allocated for each item. Anything that is not in the list will not be considered – no matter how much your son or daughter begs for that new cellphone.
*You can provide funds for the neglected aspects of your life*: When was the last time your wife had money to go to the parlor to make herself look pretty? When was daddy able to have a really good haircut? When did you last have enough money to go to the dentist? Proper budgeting will help you allocate and save money for some of the things you may have neglected because you focus on work too much.
*A budget will help you identify your needs from your wants*: When you outline a budget, you will have to identify your needs and wants. Your list of needs represent your necessities – things that you can never live without, just like your water bill, electricity bill, food, etc.
Your list of wants represents items that aren’t that necessary but you will want to spend money on anyway, if you can. You can still live a happy life without the latest Samsung phone in the market, right? You will spend money first on your needs list, and only when that list has been covered will you spend money on your wants list.
*Budgeting for the unexpected*: Having a budget will help you set aside money for unexpected expenses like a child getting sick, an accident, or any incident you were not expecting. This part of your budget is called the “emergency fund.” It’s a little amount that you hold on to and never spend unless absolutely necessary.
You start with a small amount, and then next payday you add to it. Any excess funds you save during this payday will also go into that emergency fund. Your emergency fund will be a big source of comfort when an actual emergency comes around – at least you won’t have to borrow money from anyone just to pay for hospital bills, etc.
*Plan for future needs*: You will eventually retire from work but you will still need money. Most people rely on their kids when they’re elderly. However, if you have been following a budget your whole life, you should have some savings that you can use when you’re retired.
Preparing for Rainy Days
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A budget is simply a tool that will be useful to you if you live by it. It will eventually teach Filipino households some financial discipline. By strictly adhering to it, Filipinos will only be helping themselves by saving more money for present and future needs through proper budgeting.