Making your financial situation under control is like finding the right balance in your life. And as any other things that life throws at us, finances doesn’t come as the easiest and most convenient to manage. There always comes a time wherein you’d get broke and cash-strapped and you have no other option but to borrow money.
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We know it’s easier said than done, but it’s better for you to be reminded on how to avoid pitfalls that will make you suffer financially:
1. Re-align your mindset.
The most important factor to recover from an awful situation is to change your mindset. If you keep on instilling in yourself that it’s hard for you to recuperate – that you don’t want to change your situation – it will really be hard for you.
Be positive about your situation plus have a corresponding plan and action points to back it up. Worrying can only attract more negativity and will lead you to nothing.
2. Modifying your lifestyle.
The golden rule about saving is to spend within your means – it is the direct reason why people get broke. Here are some scenarios:
- A high cost of living – this means your home and all your utility bills. Experts say that you should only spend around a one-third of your income on these kinds of expenses. If you’re spending more now, try to make some changes by finding a roommate, or look for a cheaper apartment. You can also cut your least used utilities like cables and mobile plans.
- Dining out – it is cheaper to make yourself a home-cooked meal. Dining out needs more time, effort, and money for transportation – plus the food itself. The price of the meal you bought outside is a combination of all the ingredients, cook’s fee, transportation expenses profit of the seller, tax, and more. Tweak your lifestyle a bit when it comes to food, it’s also a nice hobby.
- Socialized spending – in line with food, there is this unspoken rule when it comes to spending when you’re going out in groups. Going out with friends always come with costs, but that doesn’t mean that you have to break the bank out of shame. Spend time together, but don’t spend much money while making it possible.
3. Manage debt wisely.
Credit is okay as long as you know how to manage it. In fact, it’s easier for you to get loans when you need it if you have a credit history. Your financial history is the basis of financial institutions on gauging your repayment behavior.
Your financial management can affect all other aspects of your life. If you are indebted to anyone, your emotional state, because of stress and worrying, could also be in expense. If you are not, you could have a more positive outlook on life.
With a goal to help Filipinos lead healthier financial lives, Moneymax regularly publishes tips and tricks on personal finance and lifestyle, among many other topics. For more finance-related news and articles, follow Moneymax on Linkedin.