Nowadays, helpful articles about healthy money habits and frugal practices are readily available across personal finance blogs and websites. Others offer practicable tips, while others, quixotic. However clichéd these are, still I feel the rah-rah to write about healthier money habits that deserve adoption and development, hence rewarding on my end.
Three days ago, I was caught indecisive about what to do with the PHP 50,000.00 stuck between the pages of my financial organizer – additional emergency fund or more shares of MRSGI stocks. Yes, I already have an emergency fund worth six months of my personal expenses in an interest-bearing deposit account, while most local stocks seem promising at their ghost-month prices.
After a few seconds of financial mantras, I finally had the resolution – deposit it to my COL Financial account through BDO merchant payment facility and purchase additional shares of stocks.
With increased income from work overloads and conscious spending, I had the extra cash saved. In fact, however strong the temptations to splurge were, still I could take control and boost my monthly savings. It was a real struggle of course, but over the past few months, I have gradually adopted and developed healthier money habits which I believe are worth sharing here.
Nipping lifestyle creep in the bud. When our discretionary income rises, we are caught into the trap of improving our lifestyle or standard of living; hence, splurges become necessities – that is lifestyle creep. If you’ve been falling into this trap, I suggest you start nipping it in the bud.
It’s been almost a year since I had my paycheck figures almost doubled. Soon I recognized the breakthrough in my financial life, not as a bonus capacity to get into loans and debts but a potential to save and invest more. Well, that’s tip-top!
Stacking cash and acting broke. I wear the same shirt and black pants on casual occasions. I eat at the same ‘pares’ cart across the school in the afternoon before heading home. I use the same Samsung Galaxy V I availed through a postpaid plan three years ago (anyway, it’s just for SMS purposes).
Acting broke does not necessarily equate to being absurdly ‘kuripot,’ rather, simply living within means with healthier money habits. Whenever I literally stack cash saved within the day or week usually before hitting the hay, I become even more eager to make new personal records, hence more committed to my saving goals.
Practicing Basic Accounting. Simplicity of personal financial management excuses no one from doing mathematics and accounting. Yes, I do math. Alongside the development of these healthy money habits has been a personal financial journal where I’ve been recording all my major transactions, net assets and liabilities, bank account balances, and even insurance premium payments.
Having a better understanding of how banks calculate interests on savings accounts, how stock brokers charge fees, and how the government imposes salary taxes allows me to make smarter choices regarding investments and other financial decisions.
Entertaining creative ideas, not material things. Wise people always talk about creative ideas and not the specs of the recently released electronic gadgets. In my experience, the more I browse for luxury items at Lazada and eBay, the more that I become impulsive and irrational with my splurging decisions. I’m not materialistic then, I must say.
With this propensity, I should divert my web voracity to reading online articles mostly about healthy money habits, business and investment ideas, and personal and professional growth. Likewise, I find social media a productive avenue for learning as I hover over and share economic news and personal articles in groups such as Peso Sense, The Global Filipino Investors, and Traders Apprentice.
In the end, our money habits affect not just our current financial conditions but also our long-term financial goals. In most cases, these money habits are all about small practices and mindset, however with strong and far-reaching effects. As soon as we become financially literate, we need to review and revamp our financial plans, might as well, examine our money habits.