Have you ever asked a friend to go out with you the weekend before payday and all you got was “Omg, I can’t this weekend. Totally broke right now. Sorry! Maybe after payday?” or “Sure! But can we go somewhere cheap? I’m poor AF!!!” Hmm…or maybe it’s the other way around and you’re that friend who can’t afford a great night out just cause you spent all your cash from your last paycheck already? It’s okay. Don’t fret! Just read ahead.
The whole “Dirt Poor Before Payday” trend that’s been going around is not the way to live, people. The “Royalty Yesterday, Peasant Today” lifestyle does not suit you at all. You are a responsible adult. I know you have goals and let’s be honest; not knowing how to manage your finances is not gonna be a very stable foundation for your bright future. So, let’s get to it.
Here are my D.P.B.P Prevention Tips:
Saving should be your first expense
Before going to the mall or to your favorite resto to celebrate your hard earned cash, set aside at least 20% of your income. The first half of your 20% should go to your bank for your emergency fund, while the second half should be invested in a Variable Unit-Linked Insurance policy, or maybe you could buy stocks, or invest in mutual funds. Let your money work for you. After setting aside for your savings, go and live your life. Treat yo self! But…
Treat yourself within your means
A good trick which works for me is computing how much work I would have to do just so I could afford whatever it is I’m planning to purchase. For example, you want new shoes? So let’s say the shoes you want cost around Php 3,000. How many hours of hard work will it take for you to earn Php 3,000? If an item or service will cost you a week’s worth or more of labor, maybe it’s not within your means.
Set a budget for your allowance each day
I’ve been getting pretty anal about this. I actually have it on my calendar each day just so I won’t have an excuse not to follow my “allowance”.
Planning your day the night before works wonders, so before I go to bed, I compute how much my Uber will cost me for that day, where and what I plan to eat, and what I have to buy. It helps to have an idea of your day to day costs. This trick also helps you assess if you have to chill from eating out too much or what not so you won’t run out of money.
Know what you can and can’t live without
I work in sales. I’m not in the office everyday because my work requires me to go out and meet with people. And because I refuse to meet my clients sweaty, oily, and exhausted, I can’t give up Ubering (Is that an actual word? Lol I think it should be tho.) But if you really want to cut down on your spending, you need to give up some unnecessary things in life; (It’s just like dropping fck boys, easy peasy right???) therefore I decided I can live without overpriced smoothies and lattes, I can give up going out for drinks every weekend. It’s really just about working out a system that suits your lifestyle.
At the end of the day, we all aim to enjoy life but you gotta be set straight with your priorities too. You can’t keep living paycheck to paycheck. Not only will you have a hard time developing a habit of saving and investing, but having no sense of discipline when it comes to your finances could really affect your chances of being where you want to be 5 or 10 years from now.
So here’s to the young and thriving! May we all be financially capable young adults.