A Guide on How to Start Saving Money

Saving money is very much like going on a diet; you postpone it until you no longer can. How many times have you experienced telling yourself that you will start cutting back on fatty foods and that you will finally start exercising but for some reason it gets put off again and again? How many times have you tried promising yourself that beginning next payday you will start putting away a few pesos in your bank account only for an impulsive purchase or a spur of the moment weekend night out with your friends to get in the way?

In this blog post, you will hopefully learn tips and tricks on how to start a healthy saving habit that will last a lifetime. This is a step by step guide on how to start saving money today.

The very first thing that you have to do, and this is the most excruciating part, is to record all your expenses. Now when I say all, I do mean every single peso and centavo that comes out of your pocket. This includes even the five peso coin that you gave to the beggar and the five pesos you spent at the Nescafe coffee vending machine and not just the expenses that you remember to record, or the purchases which you deem were significant. I know that this can be tedious and a hassle but it is very significant in starting your lifelong saving habit.

A few years ago, I encountered an event wherein I saw my life savings grow dramatically. This started a string of months wherein I was reckless with my spending, and I abandoned all efforts to save money (this included budgeting and tracking down expenses). After a few months, I got tired of my extravagant lifestyle and gradually decided to get my financially healthy life back. I wondered how I could change my lifestyle dramatically very quickly. I started recording all of my expenses again and lo and behold, I had my old lifestyle back in just two months. This convinced me that every effort to start saving money should start in recording all expenses daily. Acquiring the right attitude/ mindset shall come later.

If you have an Android powered Smartphone, I suggest downloading the expense manager app. This app is actually a budgeting app wherein you'll be able to track down expenses and earnings. Click here to download it. If you don't like the idea of bringing a notebook with you wherever you go, then leave your notebook at home, record your expenses in your mobile phone during the day and copy them later to your notebook when you get home. Do not forget to date and classify your expenses.

So are you wondering how long you should be doing this? A week, two weeks, a month? Guess again! You will be doing this for the rest of your life. That did not sound very encouraging, did it? I promise you, after a month of doing this, it will no longer feel like a lot of work, and it will become routine like brushing your teeth. Please trust me on this, you have to do this consistently if you are to live a life of saving money.

The next thing that you'll have to do is to evaluate all your expenses. You have to check what you are overspending on and why. Why did you have to spend a hundred and fifty pesos for Starbucks coffee? Was it because you were depressed? Were you envious of the girl on the elevator who had a cup of Starbucks coffee in her hand? Why do you have to take a taxi to work every day instead of a bus or Jeepney? Is it because you are a manager, and you want to look it? Is it because you worry that your subordinates will not respect you if they see you riding the bus?

Examine your daily expenses and ask yourself why you bought a specific item and did you ever really need it? If you are like most people, you will find that over fifty percent of your expenses go to wants and not needs. I'm not saying that you should stop going out, eating out, or spending on wants. Again, this is like going on a diet. You are allowed to eat chocolates and ice cream, not just every day or every week but only once or twice a month.

Now it's time to decide where and how much you should cut back. If you realize that you spend too much on movies, for example, you should try decreasing your movie expenses by fifty percent. Be realistic, though, do this gradually.

The next step is to make a budget. The idea of budgeting is to allot a specific amount for different categories of expenses like utilities, rent, entertainment, food, etc monthly. You should start making a budget after at least two months of consistently recording your expenses.

Do you remember how I said earlier that tracking down my expenses helped me get back on track with my finances? The reason people fail to meet their budgets is they don't track down their expenses. Tracking down your expenses will let you know whether you are on track with your budget goals. It will allow you to make necessary adjustments if, for example, early on in the month, you find out that you already spent over half of the amount you have allotted for a specific category in your budget. This is what makes tracking down your expenses very important.

It shall be expected that there will be a month or two wherein an unavoidable emergency expense would arise, it shouldn't happen every month, though.

Remember that your worth as a person never comes from the clothes that you wear or the house that you live in. Please realize that status symbols are just that and will only impress shallow people and that food, travel, and shopping will never erase loneliness and depression. Address the root cause of your overspending appropriately and not through senseless spending on food, clothes, travels, etc.

I would really love for all of you out there to succeed in this endeavor and I hope that this guide has been helpful. The decision is now yours to make. You may also be interested in reading my article on the two things you need in order to have a healthy financial life.