Ways to Financial Freedom

1. BE A BETTER SAVER. While I still have some challenges and hurdles to overcome, I am learning how to become a better saver. I have learned to become a less impulsive spender and I often consider what my financial status may be like in the next 30 plus years.

One of the basics to saving is to obviously spend less, but creating a budget and knowing where your money is going on a monthly basis is extremely important. Whether you create your own personalized spreadsheet, it's a must to write down where you spend your money. You just may be surprised to find out you're spending way too much on restaurants and eating out, or discover you're not saving enough compared to how much you're spending.

Here are some tips to help you become a better saver. But first, remember that the key here is DISCIPLINE.

Pay Yourself First. Always make sure you think about your financial stability first. Take a portion of your paycheck and use the automated direct deposit feature to transfer it into a savings account. Direct deposit is the better option to deter from temptation of spending money.

Keep a Budget. We've all heard money experts advise keeping a budget. This is to track where you're spending and how you can curb those habits. You may not be aware you're spending P500 a month on eating out. Track your spending and then try to cut corners in one area where you're spending too much money.

Set a Realistic Goal. If you’re disciplined enough to save money consistently on a monthly basis, start off with a small budget. Don’t feel like you have to put off saving because there isn’t enough money.

Saving P500 per month may not be in your budget, but P100 is. After saving those small increments, increase the amount of money you're saving.
As a rule, you should be saving 20% of your take-home pay. It’s a good idea to set up alerts as a reminder to stay on top of your savings goals.

Wait 24 Hours. This tip relates back to impulse shopping and frivolous spending habits. If you’re out shopping and thinking about making a purchase, walk away from the items and give yourself 24 hours to cool off. If you feel after this time has passed that you still want the item then go back and buy it. Some will be more inclined not to buy anything after walking away. This is a good way to train yourself to curb away from impulse buying.

Extra Cash. After receiving any excess cash such as tax refunds, bonuses, gifts or any additional income, deposit it into your savings account before you get the urge to spend it.

Change to Spare. Every time you break a bill and get change back, put it in a jar to act as a piggy bank. When the jar is full, take it to the bank and deposit it. Some banks offer free coin counting machines which alleviates the task of counting coins on the dining room table.

Make Cuts. Sacrifice and brown bag your lunch to work several times a week. Whatever amount you usually spend on coffee or a meal at a restaurant during lunch, throw it into your savings account. You could potentially save hundreds to thousands of dollars annually.

Again, always remember that the key to smart saving is DISCIPLINE.

Source: BPI Investment Insight, Yahoo Finance