People nowadays are arguably becoming thrifty and economical; in fact, even teenagers are learning the basic formula of budgeting or financial management.
Due to the inevitable increase in prices, the skill in being smart with our expenses has become quite a challenge. With our seemingly enough take home pay, the bills that await our attention would sometimes leave us standing at the end of the cliff.
If you are surprised where your money just went after getting your pay, you are not alone. It is normal to go broke especially if you are just starting to become independent. As a matter of fact, a lot of people in their 20s experience the same kind of challenge.
There are ways on how to save your money. Some would invest in business while some would put the trust in banks to keep their money. For small income earners, it is not that hard to cut back on the amount you spend on some things. Applying the formula (Income-Savings=Expenses) might help you save money for the future.
- Determine how you much your income is.
Whether or not you have a big salary, determining how much you regularly earn would be the first step in saving money. It is the factor we consider how much we should adjust with our savings and expenses.
- Put aside an amount for savings.
Doing this as the second step would assure you some safe cash in case of emergency. After you get your pay, putting aside an amount as savings means the difference is the amount that will be used for expenses.
- Difference equals expenses.
Listing down your expenses could help you determine how much you should be spending. At the same time, utility bills and monthly charges are negotiable. After getting the difference by deducting savings from income, it will be the amount intended to pay whatever expenses you have.
Above all else, whatever method you use to save money, always make your money work for you. Trim down the amount you spend on unimportant things. The formula suggested might not apply to everyone. Hence, other ways can be used to manage your finances well.