During the pandemic, one of the affected aspects in our day-to-day living is financial. Some lost their job while some works in a reduced time. Because of this, it gives us difficulties in doing their monthly savings since our income is sacrificed. Most of our savings during the pandemic has been used up in order to survive the daily situation.
As of this time, we are not returning to the normal life. Many of us are now back in their regular work and starting to save again. I just want to share something Mommy and I were doing in our saving money and this might work with you too.
How to do it?
Compute and Set Aside
Before doing this part, I must say that honesty is the key.
You need to declare your combined monthly income then set aside a fixed percentage of it depending on your target. Remember, be realistic in giving your target. You can start in a lower value since you are still in the adjustment period. As the time goes, you can gradually increase your target.
Be sure that our monthly target shall be at least 10% of your monthly income. This part of your savings should not be touched unless in cases of emergencies.
Monitor Your Monthly Bills
Based on your previous bills, you can have an estimate of your monthly billings especially for the utilities like electricity, water, internet, gas, etc. You must also include salary for the househelp (if there is), kids monthly tuition fees, house rentals, and monthly auto-loan amortization.
This amount will be deducted in your combined monthly income.
Set Your Spending Limit
The remaining amount will be your alloted monthly spending and will be divided into four (4) weeks to determine your weekly spending limit.
Plan Your Spending
With the comouted weekly spending limits, try to plan your spending based on what is needed at home. Having an inventory before doing the grocery can help in determining what to buy. This will also help you track your items and avoid over stocking of household items.
Needs and Wants
It is very important to determine your spending based on your needs and wants. If you have in mind to buy, think first if it is necessary right away or you can delay it for a month or two. This will give you time to increase your savings alloted for the item of your target.
Save in Advance
If you have settling something on an annual basis or you are targeting in buying new appliances, you can start saving in advance. For example, if you are paying your vehicle's annual insurance every end of the year, you can start saving as early as January. By the time you need to pay, it is either you already have enough money or only a little bit short of the amount to be paid.
To give you a summary on the above tips, here is a sample computation:
In case of extra income like bonuses,, incentives, or commissions, you can do the same thing by saving a part of it then the rest can be use to treat yourself and your family.
I hope this one can help you save part of your income.
Do you have some tips on how to save a part of your income?
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