[Infographic] Top 5 Budgeting Techniques to Help You Save More Money

1. The 52-Week Money Challenge
   
   January is usually the best time to plan for your financial goals because you’re starting with a clean slate. Whether your goal is to renovate your home, book a vacation abroad, or upgrade your phone or laptop, the 52-week money challenge is a great way to raise funds for your goals.
   
   Saving through this method is pretty straightforward: You need to commit to putting money into a piggy bank or money jar week after week in increasing amounts.
   
   If you decide that you want to save in P50 increments, then that amount becomes your starting point for Week 1. For Week 2, you double that amount and put away P100. Another week comes, and you add P50 more to make it P150—this goes on until the final week of the year. At the end of the challenge, you’ll have saved more than P60,000.
   
   Rhea Mocorro of Kuripot Pinay provides downloadable copies of the 52-week template to keep track of how much money you need to tuck away at any given week. You can check her blog post here.
   
   
2. The 50/30/20 Rule
   
   Budgeting can be very challenging, especially if you don’t know where or how to begin.
   
   In such a case, the 50/30/20 rule is a good option since it breaks down your budget into three distinct categories: 50% for wants, 30% for needs, and 20% for savings. The formula is already given to you, and you just need to follow it.
   
   The rule of thumb is that anything critical for your survival is a need, while everything else that adds more fun into your life is a want.
   
   For instance, your internet subscription is a need if you’re a freelancer who does work at home or if you have an online selling business. It’s also a necessity for schoolwork or for communicating with a family member who’s an overseas Filipino worker (OFW).
   
   On the contrary, your internet service falls under the want category if you use it mainly for streaming media or playing online games.
   
   
3. The Envelope Budget System
   
   Although there are now many budgeting apps online, the old-fashioned method of using envelopes is still a great alternative for organizing your budget. Because each envelope is reserved for a specific purpose, you can see exactly just how much money you have left for every category in your budget.
   
   The envelope budget system also helps develop your discipline in budgeting. Since you’re not supposed to borrow money from other envelopes in case you’ve already emptied some of them, you can avoid overspending in any of your expenses.
   
   On the other hand, if there’s still money remaining in your envelopes after the cutoff period, you have the choice whether to keep the money in the same envelope or move it to other envelopes where you think more cash might be needed for the next budget cycle.
   
   
4. The 6-Month Emergency Fund Rule
   
   Just like how life insurance is an important part of your journey toward financial wellness, an emergency fund can give you financial protection during critical moments. In case an unforeseen crisis occurs, you won’t be easily sidetracked by budget problems because you’ve saved up enough financial resources.
   
   Financial experts recommend having anywhere from 3 to 6 months’ worth of savings, as this will cover your day-to-day expenses until your situation improves.
   
   To grow your rainy day savings, you have the option to put your emergency fund in low-risk investments that will allow you to earn interest, such as a high-yield savings accounts, certificates of deposit or time-deposit accounts, or money market funds.
   
   Still, the main thing to consider when building an emergency fund is to make sure that you can withdraw from it anytime as there’s no way you can tell when an emergency can happen.
   
   
5. The 80/20 Rule
   
   This is a variation of the 50/30/20 rule, wherein you use 80% of your income for expenses and use the remaining 20% of your income for your financial goals. These goals may vary depending on where you are in the so-called financial milestones of life.
   
   [In one of our previous articles, we talked about how your financial goals may differ when you’re 20 and when you reach your 50s. Read the article in full.]
   
   With the 80/20 rule, you can save time tracking your expenses since your budget is already lumped together in one single component. This also gives you more freedom and flexibility on how to spend your money as long as you keep your expenses within the 80% allocation.

Just Keep Saving

Being financially healthy all starts with saving money. It doesn’t matter how slow or how small you start. As long as you keep saving, it will lead you to have a better life.

You can also explore different money-saving techniques until you discover the best method for your situation and goals, or you can mix-and-match if it produces quality results for you.

If you want to accelerate your savings plan, we’ll be more than happy to help you. We have a Bancassurance Sales Executive waiting for you at any of our 900 BPI branches. See us today!