Wondering how to save money? That’s great! But like the Coldplay song goes, nobody said it was easy. Unfortunately, many New Year’s resolutions often fall apart as the months go by. However, we want everyone to succeed in this.
There’s a popular phrase that goes “Practice makes perfect. But if nobody is perfect, why practice?” While funny, we think we can do better. Practice may not make perfect, but practice makes habits.
With that, here are some practices that will help you save money this 2017.
The Basics: Becoming Financially Conscious
These may seem simple. However, these make up the groundwork of most financial aspirations. It takes time but through these small steps, it can be done. Here are some practices that’ll help:
1. Distinguish wants from needs.
One moment, you’re trying to be financially-conscious, the next moment you just splurged on a new dress. That’s why it’s important to train oneself to take a quick moment to think before spending on something.
This is where it boils down to identifying whether something is a need or a want. Needs will always take precedence over wants. To make sure your needs are covered however you will need the second step.
2. Maintain a budget.
When you’ve distinguished your needs from your wants, you can start crafting budgets. In general, people keep monthly budgets. However, you can also break it down to weekly or even daily budgets.
Needless to say, you also have to record your expenses to make sure you’re staying on budget. It might seem like a bother at first, eventually it will be automatic for you.
3. Minimize expenses.
To know if you’re saving money, subtract how much you earn from how much you spend in total. If it’s negative, then you lost money. But, if it’s positive, then congrats, you have savings!
If you want to improve on this, you can look at your expenses and look at what you can cut back on. For example, try buying secondhand instead of brand new.
After you have these basics down, you can call yourself financially-conscious. Then you can put yourself to the test.
The Challenge: Staying Financially Frugal
Once you’re financially-conscious, you’ll have the tools you need to tackle money-saving challenges. Think you’re up to it? Here are a few you can try:
1. The 52-week Money-Saving Challenge
Arguably the most popular money-saving challenge, this works by having you set aside an amount of money in advance for the first week. Then, the next week you set aside the same amount of money plus the amount you saved the previous month.
So for example you set aside P5 for Week 1, you set aside P10 for Week 2. Then, you set aside P15 for Week 3. By Week 52, you set aside P260 and you’ll have saved a total of P6,890.
2. The 12-month Challenge
This is another challenge made as a response to the 52-week challenge. How it works is you set aside a percentage of your income every month.
On the first month, you set aside 1% of your income. Then, on the second month, you set aside 2%. On the third month, you set aside 3%. And so on.
If you want an additional challenge you can also add an additional base amount per month.
For example, you have a monthly income of P20,000 and a base amount of P100. In January, you set aside P300 (P200 + P100). Then, in February, you set aside P500 (P400 +P100). By December, you set aside P2,500 (P2,400 + P100) and you’ll have saved a total of P16,800.
3.The 365-less Things Challenge
This challenge might be the hardest to do. It doesn’t really ask you to set aside an amount per month. Instead, it encourages you to get rid of an item per day.
We thought we’d give it an OLX twist to it. Instead of just throwing your things away, sell them on OLX! An item a day might be a tall order though so why not an item per month? Then, you set aside the money you make per month. Who knows? You might actually make a lot of money while making space in your home.
Give these money-saving tips a try and maybe you can let us know by the end of 2017. Happy saving, OLXers!