THE GRIL NINJA
Liza Gaspar
In The Girl
Ninja’s last column, I talked about 5 money move musts to start now: Make
financial goal where I outlined five steps to create the right financial goal.
These are:
1. Make an umbrella goal
2. Make medium-term goals
3. Make short-term goals
4. Evaluate Your Current
Capacity
5. Create Plans to Improve
If you remember, Make Financial
Goal is the first of the 5 money move musts to start now, and these are
1. Make financial goal
2. Create budget
3. Record actual expenses
4. Compare performance
5. Revise money behavior
This week, let's discuss how to
create the right budget that will help us achieve the umbrella goal we have
identified.
Create Budget
When creating a budget, your eyes should always be looking forward. When
creating a plan on how to spend your hard earned money, always look towards
your goal.
After creating the umbrella goal with supporting medium and short term
goals, staying focus on how we spend every centavo of our income is much
easier. The indiscriminate spending of old should soon be a thing of the past.
Soon every cent you spend is moving you towards your goal of becoming
financially independent.
In making financial goals, I identified 5 money move musts that you
needed to do to make the right financial goal
1. Refer to your goals
2. Pay yourself first
3. Budget the rest
4. Spend happily and
guilt-free
5. Keep track
Refer to your goals
Ideally whenever we receive compensation for our labors, whether we are
underpaid or overpaid, how we spend that money determines how fast we achieve
financial independence.
Fortunately, we now have a plan on how to achieve that. When planning on
how to spend our hard-earned money, we need to look at our goals always. Let me
repeat that. Always.
Pay yourself first
In the last column, How to Make
Financial Goals, we identified have identified saving P4,170 a month as our
short term goal such that in 5 years, we have saved up P500,000. (Note that these figures are examples. Your
actual number would depend on what you want in life and your current
circumstances. Email me if you want FREE help in computing your magic number).
Paying yourself first means setting aside this amount before actually
budgeting your money for your living expenses.
Budget the rest
Liza, what if the remaining money after paying myself is not enough to
see me through a whole month? How do I save the money I need to in order to
achieve my dreams?
You may have heard of this. Maybe you are even tired of hearing this,
but allow to remind you. If there’s a will
there’s a way.
If you think what is left is not enough for your living, then there are
two things that you can do.
1) Look at ways you can
earn additional money. Are a lot of raket/gigs if you really want to look. You speak English fluently?
Then why not tutor Koreans. Do you have Internet at home? Why not work as a
freelance business process operator? There are so many available gigs like this
at Freelancer, for example.
2) Look, really look at
your planned expenses. Personally, I spend a lot of money for taxi
fares, but once I decided to spend within my transportation budget, I just need
to leave the house 30 minutes earlier than my usual so I can catch the train
and still arrive on time for my appointments. I also spend a lot of money
eating out so now whenever I go out for a meeting, I bring bread or biscuits
instead of paying through the nose for a sandwich that doesn’t taste as good as
it should be based on how much the restaurant is charging for it.
Spend happily and guilt-free
Now, since you have paid yourself first and have a plan on how to spend
the rest, going out is no longer a burden. Rather than thinking whether you can
afford a family outing at the mall, you can now spend your energy enjoying your
time with everyone since you know that that outing is budgeted. That is part of
your spending plan for the month.
As long as you spend within how much you planned, then spending your
money should be enjoyable from now on.
Keep track of expenses
Finally,
it’s time to record how you spend your money such that at the end of the day
you can adjust your budget.
For example, at the end of the month, you find out that your family is
spending several thousands of pesos watching movies at the mall and at the same
time you are paying another thousand for your cable television. It might be the
time for you and the family to think this expense and cutting down on it. Is
watching movies at the mall really that important? Is watching movies at the
mall improve your relationship with one another? Or can you do something as
enjoyable but less expensive such as catching Frisbee at the nearest park every
weekend?
In my next articles, I will discuss each of the 5 money move musts: How
to keep track of expenses
***
Interesting Money Facts. How many zeroes are there in US $92 quadrillion?
I counted. There are 15 zeroes.
This is how many zeroes Chris Reynolds of Pennsylvania saw in his PayPal
account one time he checked. To put this amount, US $92,233,720,368,547,800 to
be exact, into perspective, it is 1,300 times the world’s entire income for a
year!
Unfortunately for Mr. Reynolds, his quadrillionaire status lasted only
for a moment. PayPal corrected its quadrillion-error as soon as it found out
about it.
***
PS I heard from one of my publishers that people who wanted to get in
touch with me are writing to them directly instead. You can actually contact me
directly through any of the methods below. Do send me an email at liza@thegirlninja.com whenever you want to
say hello.
(Liza Gaspar is a wealth
coach and personal finance enthusiast. She spendsher free time helping out with
the projects of the Rotary Club of Makati McKinley(rcmmckinley.org) and the Gerry Roxas Leadership Awardees (grlawardees.org). Visither Web site at thegirlninja.com,
email her at liza@thegirlninja.com, or visit her at facebook.com/annalizagaspar and TheGirlNinja.com).
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