YES! Once again you just have gotten your Bank Alert on your phone that your Account has just been credited with your monthly Paycheck! What a relief! It’s ‘spending time’ again. It’s time to hit the road, visit the club, send some money home, settle that little Loan you took about a week ago, make a quick stop at that new bar you always look at when you drive past at night after a hectic day at work. It is time to LIVE life. All of this is good, believe me it really is. But just a minute, Have you made plans for saving this month? Have you ‘paid’ yourself for working so hard through the month? What about that commitment at home? And that neighbor you promised to help out this month?
Truth is, your monthly salary may never be enough to sort your bills.Seeking a better approach on the best ways to spend your salary may make all the difference. Takingthe time to manage your money better can really pay off. It can help you stay on top of your bills and save a little more each month.You can use these extra savings to pay off any debts you might have, put them towards your pension, or spend them on your next car or holiday.
How do you manage your money?
Set up a budget, or if you prefer, set up a spending plan. To manage your money properly and get ahead financially, you need to spend less than you earn. Record your sources of income and when you receive them. Then determine how much of your income is spent on monthly bills and necessities.
Set up a Budget!
How should I budget my money?
- Step 1: List Income, Expenses & Spending. The first step in budgeting is to determine how your net income (commonly known as your after-tax income) measures up against all your expenses and discretionary spending.
- Step 2: Set Saving Goals…(mutual funds, target accounts, stocks, etc)
- Step 3: Develop a Savings Plan.
Now we know your salary most times is monthly, you have got to stay disciplined and focused on what you need to achieve this month and what you can manage till next pay day. Not every important bill is URGENT! After setting aside funds that would sustain you till the end of next month (transport, fuel for your car, groceries and stock) next step will be to decide how much of what’s left you can call your disposable income. You will do well if you immediately separate some ‘small’ cash from this disposable income to fund your savings account, target account, mutual funds or stock account but if you really can’t, no problem just try to next month. Next is to offset your most pressing bills like tuition fees, water bills, family commitments and all. This will take some load off your chest for a couple of weeks. After this is done, try hard to keep a serious tab on how you spend what is left.
You should also try to give yourself a ‘treat’ after all you worked really hard for your money. Visit that restaurant, stop by at the mall and pick those special shoes you have always wanted. You should also avoid spending all of your disposable income after urgent expenses has been met because of unforeseen expenses that may crawl up during the coming weeks. An expected visit from your relations, a ‘cry’ for help from a loved one or an emergency medical billall have a way of putting your finances on the edge. Hence, plan for them.
Also, try not to incur new expenses along the way. The urge to ‘keep up with the joneses’ have a very funny way of eating deep into our pockets, making us live ‘fake lives’ and increasing our level of indebtedness. Stay within what you earn and try to match your expenses with it.
While you earn your monthly income explore ways to earn passive income to help you offset some of your bills. This will reduce the pressure on your monthly salary.
Above all, look for ways to cut down on your monthly expenses or commitments. Not everything is needed in the short run. Work only on what is priority and try to keep your head above water.