Are you living paycheck to paycheck, or do you find yourself having barely enough cash after paying the bills? Perhaps you’ve been delaying your planned home renovations due to lack of budget or a savings plan?
Don’t ignore these red flags. They are clear signs that you may be broke, which can turn into a cycle if not addressed properly. Needless to say, you need to take immediate action to turn your situation around.
The first step you can take is to know the most effective techniques in money management. Go for these simple yet useful tips on how to make ends meet, and get out of the cycle of always being broke.
1. Check for “vampire” expenses.
Vampire expenses refer to both recurrent and one-time fees that leave your bank account depleted, just like the blood- and life-sucking creatures you dread from the supernatural world.
It could be the streaming services you signed up for on top of your cable TV subscription or paying for a gym membership when you don’t really go to the gym regularly, especially because there are several gym alternatives that you can try at no extra cost for you.
Often, it’s easy to justify spending money that only represents a small percentage of your income.
But remember: A peso saved is a peso earned. Even the smallest amount can help to build your savings.
2. Try a no-spending challenge.
This may seem like a tall order, but you’ll be surprised how empowering taking this challenge is. The goal is to discipline yourself to spend only on your most urgent needs and delaying the purchase of non-essentials for as long as possible.
You can start with no-spending days first and then gradually do a weekly or monthly challenge. For example:
- Avoid buying prepaid load for a day. Instead, use your reward points to load up your mobile phone or connect to a hotspot for internet browsing.
- Skip your weekly grocery shopping. Instead, look for food items in your fridge or kitchen cupboard that you can cook for the next few days.
- Steer clear of monthly sale events from your favorite online retailer, even if you have a discount voucher to use. Instead, plan about decluttering your closet and turning items that you no longer use into cash by selling them.
3. Avoid loans at all costs.
Having sufficient income and good credit history can make you eligible for loan offers, but you shouldn’t be too quick to enter into a loan contract. Debt payments can get in the way of your savings goals, especially when you’re not able to settle them on time, so what happens is you end up paying more penalties and then approaching another creditor for an additional loan.
If taking out a loan is really necessary, you need to be responsible in reporting to your creditors all of your debt obligations. This way, you’re helping your creditors determine precisely how much loan you can afford to pay, and at the same time, it’s easier for you to pay off one loan after another until you finally clear all of your accounts.
4. Stop using your credit cards.
How many times have you pulled out your credit card to pay for something because you’re already out of cash? This type of spending habit has to end, as you can’t afford to keep living beyond your means.
Another thing with credit cards is that unless you pay more than the minimum amount every due date, you may never be able to pay off the actual amount that you spent or borrowed since you’re only making payments on interest.
If this is the case, what you can do is to try to negotiate for a lower interest rate with your bank or the credit card company. Many of them will be willing to work out a lighter payment scheme with you, so you both don’t have to wait a long time to get your credit card bill down.
5. Put the money you have saved in a savings account.
As you consistently make good money decisions, you’ll soon find yourself acquiring enough cash to set up a savings account. Stay on track by not dipping into your savings fund so that it can earn interest and grow your money some more.
For the best savings plans, look for those that offer plus benefits such as insurance coverage or investment opportunities.
From Broke to Pro-Savings
Being broke and getting out of it can provide you with some of the most memorable life lessons you’ll ever learn. Among those learnings is that even small things can make an impact in your financial growth. As long as you remain steadfast in your efforts to save, you’ll eventually succeed in your goal.
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