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Why You’re Running Out of Money and What to Do About It

Almost every person has experienced difficulties in handling their own allowances. Sometimes, you even get caught up in a situation where you think you still have money, but realize that you had already spent it the night before.

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Sounds familiar? We’ve all been there. Like Aeron, we tend to mismanage our allowances, not knowing exactly where our money goes and spending more than our means. We end up wasting our valuable resources for lavish wants when we could’ve put it into more productive use.

But it doesn’t have to be that way. In fact, would you believe us if we tell you that little steps you do now can give you big rewards in the future? Let us tell you why and how you can achieve this.

#1 Learn how to budget.

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Budgeting money is an important aspect of managing day-to-day life, especially for students and people who have limited resources to move around with. By doing so, you avoid overspending and cut stress when thinking about how much is left in your bank account. More importantly, it shapes healthy financial habits for the future. But how do you actually do this and succeed? Here’s how:

Step 1: Choose a budgeting plan.

The best plan for you entirely depends on what you’re aiming for. Want to fill your bank account with extra cash? Want to cut down your spending?

For beginners, like most of us, it could be easier to start with the 50–30–20 budgeting system. With this plan, you split your allowance into three major categories: needs, wants, and savings.

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50% goes to needs which are necessities you need to live your life. This includes your basic food allowance (Literally what you need to survive. No, it doesn’t include the milk tea you’re craving for.), water, clothing, and the like.

30% of your budget then goes to wants — these are definitely non-essential stuff, but they surely give you room for some enjoyment. In fact, this is where you can justify your milk tea cravings, but then again, always bear in mind the 30% allocation rule.

Finally, 20% goes to savings. Savings is not intended for your extra wants. Instead, it’s for contingency purposes such as when you lose your money, pay off your debts, etc. Savings is what cushions you from emergency circumstances, and also allows you to invest so that you can better smoothen your consumption over time.

Of course you can allot a bigger chunk of your money in savings and lessen the amount that goes to wants. The best budgeting plan will depend on what your goals are. The 50–30–20 rule, however, is a good start especially for students and other people who are just starting to become aware of where their money goes. Feel free to tweak this to fit your lifestyle! This plan allows some room for enjoyment, so it eliminates the common misconception that budgeting your money entirely cuts out things that make life fun.

Step 2. Stick to your budget plan.

Stick (ba dum tss) to your budget plan!

While it’s easier said than done, sticking to your budget plan is still the best way to instill in you the discipline you will carry forever. Some say it takes 21 days to form a new habit. But regardless of how you develop the habit of budgeting, two things are important to bear in mind: (1) Why did you want to start budgeting? And (2), How will budgeting help you achieve your financial goals?

Step 3. Revisit your plan if needed. As mentioned above, the best budgeting plan depends on what you’re aiming for. If your goals change, simply realign your budget to meet your new goals. Constantly revisiting your budget allows you to evaluate what practices you need to keep and changes you need to make to help you reach your goals.

#2 Track your expenses. Tracking your expenses gives you a better understanding of your spending habits, and can help you make the necessary adjustments to help you reach your goals. Tracking expenses can be a whole thing of its own, but don’t worry because we’ve broken it down for you. We gotchu!

Check your account statements.

How much can you really afford? This can sometimes be heartbreaking tbh, especially when you’re used to spending so much and not tracking all your expenses. But this is the first step and it’s crucial too! Check how much money do you really get, say, every month. If you own a credit card, determine what your credit card limit is. Aeron’s on point actually: Just like in love, you can’t spend and give what you don’t have. Sad (but true).

Categorize your expenses.

Normally, expenses can be classified either as fixed (e.g., rent, insurance, utilities) which don’t change that often, and variable (e.g., food, impulse buys, gimik allowance) which vary a lot. Since variable expenses fluctuate, these ninjas can easily kick you out of your budget plan if you don’t keep an eye on them. Use an app.

Aeron’s right: It’s already 2019! Almost everyone is glued to their smartphones 24/7, so tracking your expenses using your gadgets shouldn’t be that much of a hassle. In fact, there are numerous expense-tracking apps which you can download from the app store for free. Mint and You Need a Budget are just a few examples of great expense-tracking apps available out there.

Explore other options.

Not exactly the smartphone type? Don’t you worry, ’cause there are plenty of other options you can use if you hate being with your phone all the time. You may utilize your laptop and use readily available tools like spreadsheets and budget templates. If you dislike gadgets altogether, a simple notebook will do. Just make sure you jot down all the things you need to fully keep track of your expenses. Identify room for change.

Examine where you’re falling short. If you find that you have so much unnecessary gastos already, change. Whatever the situation is, you must be able to adjust accordingly. That way, you’re more able to reach your goals.

Budgeting is so much more than just budgeting. It unlocks doors which aren’t available if we don’t keep track of where our money goes. In a world full of milk tea shops, kaliwa’t kanang movie releases, and samgyup all day err day, always be a step ahead by keeping track of your expenses and sticking to what you can afford. At the end of the day, it’s through these efforts that you can ensure you have enough money for things you need and are most important to you. More importantly, you empower yourself to have better and brighter options in the future.

So what are you guys waiting for? Make your budget plan, track your expenses, stick to it, and empower yourself to have a brighter future ahead!

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