If you have read “Rich Dad, Poor Dad” by Robert Kiyosaki. then you should realize by now that financial intelligence is a manner of personal disposition. How to get yourself out of the endless loop of working to earn and earning to pay bills starts with the initiative to keep track of your expenses. Honestly, I used to be so loose with money that looking back I have realized I could have saved a lot of money and yet here I am, still broke and dependent. I’m pretty sure I’m not the only one with this dilemma and I’m here to say that it’s never too late to start paying attention to the financial aspect of your life. Like everything else, the road to financial freedom starts with planning and organization.
I have started to practice these tips in January and so far have found it effective. I hope these tips I’ll be sharing will help you be financially organized so we can all achieve financial freedom.
MAKE AN ANNUAL SAVINGS GOAL
This is actually a part of your longer list of New Year goals. Like every other goals, this should be SMART: Specific, measurable, attainable, realistic and time bound. What I did was budget estimates of monthly bills, set them aside and keep 20% in my money jar. The rest is for food, groceries, transportation,etc. I call the 20%, Mandatory Savings. After putting them in a container, I try to live within the remaining budget as if I have no more money hidden in my closet. This has been one of the habits I try to develop because for me, there used to be no integrity with having a money jar if I keep on thinking about it as back up money. I burn through my allowance because I knew I can always grab something from that jar whenever a need arises. That was wrong so now I try to forget about the money I put aside so I can live within my allowance.
USE 3 MONEY JARS
The three money jars are for Donation, Savings and Investment. Divide your 20% Mandatory Savings into these three. For any additional income, say if you have a part time job or business, put it in the Savings jar. By the way, a donation jar is necessary. According to the laws of attraction, you should be ready to give the amount you wish to attract in your life. If you believe in the magic of giving, then start putting money in your Donation jar. Strive to save a specific amount on every jar before you donate, deposit in your savings account and invest. For example, I try to save up at least P10k before I make the deposit. (Although the truth is I rarely want to visit the bank because of long lines.) You can also add as much jars as you want for specific things you want to save for, like travels, a new appliance or a tattoo.
PAPERCLIP MONTHLY DUES
Here’s something I tried this year. I didn’t save anything in the first month and instead allocated money to pay for bills up to two months. I am currently renting and the utilities I pay are still low but I have been caught in situations before when something suddenly comes up, I spend my bills budget and I end up borrowing money to pay for my bills. Good thing if the people you know have money to lend you but what if they didn’t, right? So I have hidden money I have paperclipped according to the specific bills I pay. And it’s good to keep on doing this every month, paperclipping money for future bills so you wouldn’t be caught broke whenever an emergency comes up.
LIST EXPENSES, KEEP RECEIPTS
Keeping receipts will track your monthly necessities. I have envelopes for Bank, Food, Groceries, Supplies, Services, Things with Warranty and Utilities. You can also assign your envelopes according to your usual expenses. Take note of all of these in a Microsoft Excel spreadsheet. If you want to track your expenses according to your purchases, you can add up all the Food receipts then the Groceries, etc… and rank them accordingly. This is so OCD I know but here’s where you can see where the majority of your money goes and where you can save.
USE A FINANCE TRACKER SHEET
I have created this Finance Tracker Sheet and have been using it since January and I’m giving this to you guys for free! Here’s where you can literally track everything from expenses to savings all year round.
TRACK PROGRESS and EVALUATE
It feels really great to be on top of things especially with the finances. Being organized with money is the first step to living the life you deserve. Track your monthly expenses and savings and evaluate the ways and areas where you can increase your savings. Keep up the money habit. Good luck!