TOPAZ HORIZON

So when I found this post in my inbox asking to be shared with you, my Loyal Readers, I decided to publish it. If it's relevant to me, it must be relevant to many of you, too! Here are 6 tips and strategies for better budgeting: 

For many Filipinos, personal finance and budgeting can be a struggle. This is true no matter the person’s age, marital status, or work experience may be. By following some practical advice, however, this struggle can be overcome.

Here are some simple yet effective tips and strategies so you can get better at managing your hard-earned money:

1. Know Where Your Money Is Going—Always

There are two important things you need to know to get a good handle on your personal finances: how much money comes in on a fixed basis from all sources and where this money is going. Do note two other crucial details here: fixed basis and all sources. This means that if you can’t reliably depend on an income stream (e.g., an occasional freelance project), it might be better to just leave it out of your overall budget planning.

The bottom line here is that when it comes to money, you need to be as accurate as possible. This minimizes the risk of going over budget and also gives you a clearer idea of where you can make adjustments with regards to your spending.

2. Make the Most of Financial Management Tools

When you’re dealing with numbers, it’s difficult to keep up with all the details if you just rely on your memory. You’ll likely miss an important detail sooner or later, which can mess up your entire budget.

Thankful, there are various financial management tools that can help you set up, plan, and stick to your plans. First and foremost would be your bank’s own mobile banking facility, which you can use to check your transaction history, pay bills, and transfer funds. You can also use mobile banking to secure your account by activating two-factor authentication.

There are also budgeting apps you can download, although even a basic spreadsheet program can go a long way when it comes to tracking your expenses. You may even prefer the traditional method of using a ledger. The key is to find a tool or method that best matches your needs and works for your style of planning.

3. Set Realistic Savings Goals

When you’re trying to save money, don’t fall into the trap of going full throttle right at the outset. You may end up pressuring yourself too much and end up burned out (and without any savings to boot). Instead, set realistic goals based on your current financial standing. If you’re starting from scratch, saving 10% of your income every month is more reasonable, achievable, and sustainable, right?

Then, after some time, you can scale up your goals. This can make you feel more accomplished and therefore more motivated to save and manage your money the right way.

4. Try the 50-30-20 Budgeting

Also called the rule of thumb, this budgeting scheme allocates 50% of your income for your needs, 30% for your wants, and 20% for savings. This is a pretty simple but solid structure, especially if you don’t have a lot of loans to pay off.

If you’re having difficulties with keeping the bills at or below 50% of your income, review where you can make adjustments. Maybe you can follow a 60‐20‐20 model instead. The most important thing is to set aside money to save and invest; remember to also give yourself the opportunity to enjoy your money reasonably.

5. For Minor Goals, Try Envelope Budgeting

Ideally, you should open separate bank accounts for your savings and emergency funds. Doing this will prevent mix-ups that can throw your budgeting off-course. For smaller, more short-term goals, however, a separate bank account may not be practical. In these situations, the envelope method may be a great solution.

The envelope method of budgeting literally makes use of envelopes. Simply label them accordingly (e.g., new smartphone, weekly coffee shop order) then regularly put away an amount inside (e.g. Php 100 per week). This simple budgeting strategy is quite effective for smaller purchases because you’ll have easy access to the funds. It also makes it easier for you to monitor if you’ve made enough for your minor financial goals.

6. Review and Update Your Budget Regularly

Last but certainly not least, make sure to check your financial status regularly and update your budget accordingly. There are a lot of things that can happen that can affect your plans, both good and bad. Maybe you’ve received a salary increase or you’ve paid off a loan; maybe you got sick and had to be hospitalized, so you had to dip into your emergency fund. Perhaps you’re planning to get married; if you already are, maybe you and your spouse would want a child.

All of these things can affect the way you spend and save money. Thus, it’s wise to update your budget and financial projects whenever there are such changes. It can save you a lot of headaches and confusion later on.


As you can see, these are pretty simple tips that are easy enough to implement. Of course, remember that everyone has different financial situations at any given time. Thus, don’t think of these as rules but rather as guidelines. The most important thing, in the end, is consistency. This, more than anything else, can help you achieve your financial goals.

Good luck!