How to Be Strict With Money, the Millennial Way

— August 26, 2019

How to Be Strict With Money, the Millennial WayPhoto by Razvan Chisu on Unsplash

Is there a best way to save money and earn interest? You probably have this question in mind when it comes to saving up. Do you have an idea on how to make your money grow fast but are feeling stuck on how to start building your savings plan?

This is just one of the many things you have to consider on how to build your savings fast.

1. Know what exactly you are saving for.

Money is a precious commodity. Certainly, you wouldn’t want to risk making huge financial mistakes in the long run. You have to consider a lot of factors such as the impact of inflation on savings. In case you are not aware, the inflation rate in the Philippines is constantly fluctuating. In one year, the purchasing power of your PhP10,000 deposit could lessen if the prices of goods and services increase because of the inflation rate.

So ask yourself: What exactly am I saving for? Is this for a short-term financial goal, like buying a new smartphone? Or is it a long-term one, like having enough money for a business? Once you identify your specific purpose for saving, this can serve as a budget motivation. Also, use your purpose to choose between savings and investment, i.e. savings are for short-term money goals, while investments are for long-term financial goals.

2. Plan how to save.

Knowing why you should save now gives you an idea on how you should save. For example, you want to replace your car with a new model. If you know that your salary is not enough, find a way to save money for it, as early as now. Consider this a short-term financial goal. For long-term goals, like setting up a good emergency fund for your family, put together a well-detailed plan on how to get out of financial trouble in the future.

How to Be Strict With Money, the Millennial WayPhoto by Nik Shuliahin on Unsplash

3. Do not compare your saving goals.

Sometimes, you might feel envious if someone you know is already achieving financial success. If they are also talking about their awesome financial hacks, you might get easily swayed and think your financial plan is not working. Restrain yourself from comparing your savings goals to theirs. What works for them may not necessarily work for you. Savings, just like insurance, is designed to suit your personal financial needs and goals. Once you’ve come up with your financial plan, stick with it or revise it, based on what works best for you. If in doubt, seek out a financial advisor who can help you gain clarity on your financial decision.

4. Know yourself.

Are you the type who celebrates victories and losses in life by spending money? If yes, figure out how to focus on saving and how to be strict with your money. It is okay to treat yourself every once in a while, but if you buy a new gadget for every milestone in your life, you will likely lose money in the long run. Stick to a money-saving mindset and commit to avoiding buying things you do not really need.

5. Keep learning, but be consistent.

As time goes by, you may learn more creative ways to budget. This is important in helping you stay updated on how to manage your finances better. On the other hand, this could also get overwhelming and confusing. You might end up trying and changing different financial plans. In the end, you might not get anywhere with your financial goals. Resist the urge, and do your best to stick to and work your way around your financial plan. This way, you dol not end up wasting your time, money, and efforts by jumping from one financial strategy to another.

How to Be Strict With Money, the Millennial WayPhoto by Tran Mau Tri Tam on Unsplash

6. Do not rely on luck, but on smarts.

Investing comes with risks. But risks do not have to translate into losses if you apply calculated risks. A calculated risk is a risk that you do after considering the possible consequences and rewards of your actions.

Applied correctly and with proper planning, calculated risks could still result in great, positive outcomes for your financial goals. One way to do this is by equipping yourself with knowledge, skills, and tools on becoming financially astute. For example, you need to understand the difference between assets and liabilities or be familiar with trends on stock investments.

7. Accept freelance work.

If you have a “hireable” skill and have extra time to spare, then invest that time in freelance work. This is one of the best financial hacks to save money because of the extra money it will bring in. It could also help you widen your skill set for prospective employers or possible business ventures you might want to try in the future. Also, freelance work can be done short-term or from home so it will be easier to manage.

8. Move to a place with low cost of living.

You might wonder why you can’t save enough money, no matter how many budgeting life hacks you try. Well, you might be overlooking something: the place where you live. If you are in a work-from-home scenario, you can move anywhere in the country or overseas. The main point of which is to save more by finding places affordable food and rent.

How to Be Strict With Money, the Millennial WayPhoto by Tierra Mallorca on Unsplash

9. Choose your friends wisely.

Yes, you read that right! You have to choose your friends wisely to achieve your financial goals. Even if you know how to make and stick to a budget, you are more likely to be swayed into breaking it, if you have friends who spend lavishly and encourage you to do the same.

They could express it like a harmless joke. “Minsan lang naman” (You only do it sometimes), they might say; and, before you know it, you’re going along and breaking your savings plan, in the process. After all, who wants to be left out in your circle of friends, right? But know when to draw the line in your friendships, because your finances are just as important. Think of it this way: If a financial emergency occurs, will these same friends help you out? If lavish spending is their lifestyle, you probably know what to expect.

10. Create and maintain an emergency fund.

You know that you can never predict emergency expenses. You might suddenly find a family member with a serious illness, or you are met with a sudden loss of income. If you do not have any extra money, you could get stuck (and stressed) in figuring out how to get out of this financial trouble. So, always prepare for the unexpected by setting up an emergency fund. Make sure to maintain that fund, along with your budget.

11. Discuss finances with your family.

In Filipino culture, the family will always be part of one’s financial goals. You may want to give back to your parents after all those years they took care of you. You may want to treat your siblings to vacation because you want to spend quality time with them. You should be open to discussing your financial plans with them. Let them know what you can only spend or what your budget may be. You and your family should teach each other how to be strict with so that you can meet your long-term financial goals and aspirations. This might even bring your family closer, as you work on your financial plans together!

12. Ask for professional help.

You may think you already know many budgeting life hacks, but remember that learning is a life-long process–one that a professional financial advisor can help you on.

You may learn more and improve more from financial advisors. Financial professionals will help you come up with better decisions about your money, and may even help you improve your current financial management hacks for the future.

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Author: Kimberly Grimms

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