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How to Manage your Finances Wisely

To live well without worrying about our finances may be the ultimate goal for most of us. Working overseas and living our usual life is the start of achieving that goal. But, how can you do it? How can you live the life you’ve always dreamed of?

According to Farsight, there is only 6 percent of foreign domestic helpers who return back home with enough money saved. On the other hand, 10 percent of the foreign domestic workers in Hong Kong go back home without anything in their pockets. The statistics is alarming, but where do you want to belong? Do you want to be a part of the 6 percent or the 10 percent?

I’ll raise my hand for the 10 percent! So, how do we achieve that?

Here is a simple guide in achieving that goal.

Guide to Managing Your Money

  1. Financial Literacy

According to myaccountingcourse.com, financial literacy is having the understanding of your source of income, where it goes and how you spend it. It is also about how you are able to manage it well in order to be financially stable.

A good understanding of your money and expenses is a good starting point. You can start by making a chart of your monthly income and expenses. This will make you realize where your money is going and if you are saving any at all.

Income

 

Expenses Savings
$4,310 Food — $300

Remittance —

Clothes–

Phone/Internet—

Transportation allowance–

 

Savings for the month of____
  1. Long Term Saving Plans

What are you saving for? Are you saving for a house, a car, your children’s education or an investment? This is a 10 or more years achievable plan that will cost a lot of money and patience. You have to set a certain amount of money aside every month so that you can achieve it. It would be better to put in a bank account that you can’t withdraw after a certain amount of years.

  1. Set Achievable Goals

In tis case, you can use the SMART goals; specific, measurable, achievable, results focused and time bound. When setting up a goal, you have to be specific on what you want, if it something meaningful to you, if you can realistically achieve it, if it’s reasonable and then when do you want to achieve it. Following this idea can make your goals in reality.

  1. Prioritize your goals

Procrastination is a bad habit as we all know, but we tend to form the habit no matter what. This is something that will stop you from achieving your goals. Once you’ve set up a goal in your mind, and you already have a set time to achieve it, then all you have to do is work your way to it. Stop telling yourself that you can’t do it this month; you need to motivate yourself in saving up for something you can actually gain in the future.

  1. Manage Debt

Other people think that if you work abroad then you have a lot of money; it may or may not be true. Some Filipino workers struggle with debt even though they haven’t started work, because of out of pocket expenses while processing papers to work abroad. So, how can you manage your debt, and not find yourself knee deep in debt?

You have to start by setting up a good budget. You have to prioritize your debt, and use the remaining amount of money on other expenses. In this situation, you have to be more frugal. If you are sending money to your family, you have to explain your situation and the reason for not sending money yet or sending just a small amount, until you can finally settle your recurring debt.

  1. Balance a Budget

Balancing a budget is the key to successfully living a stable life. You have to analyse your needs against your wants. Do you really need it? If you buy it, can it be an income generating purchase? Or you are just convinced by the ads or the people around you using it? Another thing you need to stop yourself is impulsive buying, because you might find yourself spending more than the money you have for the month.

  1. Invest Money

Investing is another way of generating income. However, you have to invest your money wisely, because this is a risk; you may or may not get it back. In investing, you have to set an amount of money that when you lose it, it wouldn’t hurt your bank account.

  1. Attend Workshops and Financial Counselling

This is another step in managing your finances wisely. If you are in doubt, or just simply don’t know when to start, then attending seminars or workshops that can educate you about your finances is essential. Here, you can talk to experts who can give you tips and advice on what to do and how to do it. Furthermore, it will enlighten you about your current situation and might motivate you in doing it straight away.

You work hard in order to have a financially stable life, so why don’t you invest your time in creating a chart, balancing a budget, thinking ahead, setting up a goal or long term plan. Once you achieve that goal, you will feel happier and content because you can see the fruit of your labour. So, what have you done to make a difference in your financial life?





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