Tip #4: Savings

Well ok, I know I've been talking about savings in my recent posts, and here I am again. This time it's specifically about savings. When I refer to savings, I think of it as something that's mine and mine alone - it is the money that I don't use for my everyday expenses, for paying bills, or for buying "doodads." I call it mine alone because it doesn't go anywhere it stays with me. You may think "so what's the use of that money if your not going to use it?" It's like this: sometime in the future I will not have a job anymore, I may be too old to work, or I may have a family to support. As I've mentioned previously, how you manage your finances now determines the kind of future you can create. Having a good savings plan frees you (a little bit) from the worry about the future. Whatever financial future comes for me, I will be prepared to face it.

Now picture this: You're working in a large company earning a descent income. Your job is ok; schedule is normal, an 8-5 shift – 5 work days a week and 2 days off. Company is huge, job is stable (or so you think), promotion opportunities are vast. You've been working here for a few years, been promoted twice. But suddenly on the newspaper headlines you read an unexpected economic crash. You life suddenly starts to take a turn as you find yourself packing your stuff, taking a long last look at your cubicle or what used to be your cubicle. You've been laid-off. If you didn't have any savings, you'd probably be in panic, "What am I going to do next?", "Where am I going to get my income?", "Where can I find another job?" However, if you had savings while you still had the salary, you could sit down and calmly (at least) think of your options of what you going to do next, in the meantime while you're thinking, your savings will support you (at least while it lasts).

So since the future could be very unpredictable, start saving, start budgeting, start to discipline yourself. Be ready to face the future whatever it may hold.

Tip #3: Doodads

I've dedicated a special blog to these things called Doodads. Because, for one, these are one of the greatest savings smashers, budget breakers ever to exist. But "what's a doodad?" you may wonder. For those who haven't heard of this word before this is from Robert Kiyosaki's book "Rich Dad, Poor Dad." It's a term to describe all those stuff we spend for all the time. In other words, it’s those expenses we spend for, for things we don't really need. It could be anything like a dinner at fancy restaurant, designer clothes, a multi-functional electronic gadget, a 3-day out-of-town vacation or something you bought simply because it was on sale. Doodads could be very tempting to resist, especially with all the hype surrounding it – the flashy ads, the catchy commercials, or “everyone-has-one.” Though these things are good to have every once in a while, sometimes we may find ourselves spending a little too much on these that we end up almost broke or worse, we could be in debt.

One thing we most commonly do when we get a handful of cash on our hands, is to get rid of it right away. We spend and spend and spend and spend until there's barely enough to last us until the next payday. I’m not saying that we should deprive ourselves of the little pleasures of life, such as these doodads; instead what I’m saying is that we need to put a limit on what we spend for these. It's good to have these things once in a while but unless you're absolutely sure that you'll never lose your job, or that you'll always have a constant income stream for the rest of your life, then pause and think - how you manage your finances now will determine what kind of future you will be able to make for yourself and maybe for your family also.

Tip #2: Discpline

5 'o clock and its time to go home - well, for the others at least. I think I'll be staying a here a little longer. I have to give a little extra work, so I can earn a little extra pay. There's a new gadget coming out next month and I want to be the 1st to own one. Whoops! Stop right there and think about this: why am I working so hard to earn money that I am so eager to get rid of? Frankly speaking, your biggest obstacle to saving money is yourself. Previously we talked about how to have control over your money spending, but now we will talk about how to have control over yourself.

So you have made a budgeting plan, but somehow you find it a little hard to stick to it. The first few days of sticking to the budget may have seemed fine but there are some days you just find it difficult to resist the urge to spend. "That coffee just seemed so irresistible.”” That cake was calling out to me from the shop window." Well ok, I do admit it is quite hard, but it’s not hopeless. "So what do I do now?" you might ask. Then here's the answer DISCIPLINE.

Unlike when we were kids, we don't have grown-ups to watch over how we spend our money. So here's my advice: create a scenario wherein you will be forced to discipline yourself. Imagine a train without a railroad, with nothing to guide it the train could end-up anywhere. With a railroad however, the train is "forced" to stick to its path to reach its destination. Here are some practical advice:

• Take only what you need: If you have made a budget of how much you spend each day then take only what you need for the day do not take any "extra." With only that amount each day you will be able to learn how to live within your means. You will learn to live with what you have. In this way, you are "forced" to discipline the way you spend your money.
• Set aside your savings: As soon as you recieve your pay, allowance or whatever it is you earn income from, automatically set aside the money for savings, place it somewhere you can't reach. My bank currently has a feature that can automatically transfer a specific amount from my salary account to my personal account at a set time. I use this feature so that each time I recieve my pay, my savings will automatically be transfered to my personal account.
• Keep you savings out of reach: Or at least keep it some place where you can't conveniently access it. Let's say you have 2 ATM cards, your personal account and your payroll account, then do not always carry them both around. As much as possible, just bring the payroll account with you and hide your other ATM card. Time may come when you might be tempted to touch those savings in your personal account, but if its not readily accessible to you then it might help put a little restraint on yourself.

Tip #1: Budgeting

It is the 27th day of the month, just 3 more days to the next paycheck. You notice your wallet getting thinner and thinner each day as your stack of bills get thicker and thicker. You pause for a moment, think back on your last paycheck and wonder "Im sure I had enough. Where did it all go?" You trace back the days to that expensive buffet you had last payday, that cellphone accessory, that mall-wide sale and that rare item you found on the internet. There's still 3 more days to the next cashflow, but you're already broke.


Does it sound familiar? If not, then you're probably well on your way to a good savings. But if it does, then let me share with you this, something we all know, but most us take for granted: Budgeting. You may not realize it but each day you might be spending your money on a little "extra" something. No matter how small it is, it accumulates over time, and sooner or later you begin to wonder where all your money has gone. Proper budgeting is simply taking control of how much you spend and how you spend it. It is knowing where your money goes. Bugeting frees you from wondering what happened to your money.


If you don't already have a list of your expenses, you can start by doing the following:

• Set aside TIME to do your budgeting. You don't budget as you go along. Budgeting should give you an overview of where you spend your money and how you should spend it.
• Make a list of all your bills and how much you expect to pay for each.
• Make a list of all your expenses in a day, from transportation fares to food. Total them and multiply that by the number of days between paychecks. If you get paid every 15th and 30th, then multiply the estimate by 15.
• Add the total of all your bills and daily expenses. Compare that with the money you recieve each payday. If the total expenses are bigger than your pay then you need to seriously reconsider how you are spending you money.
• Check your list and see where can you reduce your expenses. Do eat out frequently? Do you take a taxi often? Do you use your credit card a little too much?

Knowing where your money goes is very important, for it gives you a degree of control over how and where you spend. If you dont know where your money goes, how would you be able to control it? After all, you can't control something you don't know.