Here are the five easy steps to grow your money in 2018.
Step 1: Make a budget.
A budget keeps you in track of your finances. It also allows you to manage and allocate your money to your expenses. If you are new to budgeting, list all of your expenses for the month. Start with the needs such as utilities, mortgage, transportation, and food.
This means that the money coming in should be greater than the money pouring out to keep you afloat. If your income is not enough to cover all of your expenses, make changes like saving money from electricity or food or try to look for a higher paying job.
Step 2: Go cashless.
Based from my experience, it is easier to give in to “wants” when you have cash to spare. That is why I try to bring cash with me when shopping. Here are some tips to get you started:
- Use a separate debit card when grocery shopping to manage your expenses for food.
- Banks offer online payments for utilities, which is very convenient.
- Use checks for big expenses like tuition fee, mortgage, etc.
Step 3: Avoid credit.
Cut those cards! While we avoid bringing cash, do not rely on your credit card. Debit cards nowadays have the same feature as your credit card for purchases.
Live within your means! If you cannot afford something, do not pull that credit card. Sleep on it and if you still want it, save for it! Bigger discounts are offered for cash, one-time payment.
Step 4: Save. Save. Save.
When you make your budget, you will see how much money is left that you spend on luxuries like that expensive dinner that you did not really enjoy. It is important to start small so you will not be discouraged when you find saving hard. Here are some tips:
- All those loose bills and change, keep them in one place.
- Deduct 20% from your income and deposit it in a separate savings account.
- Put all your extra income in the savings account as well.
- Set a goal (ideally, it should be 6 months worth of your monthly expenses).
Step 5: Invest.
When you reached your goal, invest it to further grow your money. Whether it is mutual funds, UITF, or time-deposit accounts that have higher interest rate yields.