We all want to make smarter choices when it comes to our hard-earned money, but that is admittedly easier said than done, especially when many of us still live paycheck to paycheck or only have vague notions of what we're actually spending on. Still, that doesn't mean we can't start somewhere.
Sometimes, all we need is a dose of inspiration. Here, we asked several money pros to share their personal budgeting tips to nudge us in the right direction.
This Power Couple 'Pay Themselves First'
"I don't really budget, as in have a fixed allocation of money, except my husband and I automatically invest 50% of our individual income. The rest is not strictly for anything in particular. We give each other allowances for things we want." —Clarissa Seriña-de la Paz, Author of Bestseller "I Wish They Taught Money in School"
"We pay ourselves first, and then we're more flexible with the rest. We write down our cash flow statement, when the money comes in and out. Timing is important. Before we receive our salaries, we'd have allotted for investments, fixed costs, and the remaining is for whatever we want. This way, you can see clearly if you can make new investments or spend on other things like travel." —Miko de la Paz, Manager in Financial Brokerage Firm
Documentation is Key
"I have a spreadsheet that tracks all my income. It details what I can be making in the next decade, in contrast to what I have at present. I track all my expenses using an app on my phone. That includes expenses from the food I eat daily, parking fees, to the big-ticket purchases I make. This gives me a complete visual history of where all my money went, which I can revisit anytime. By knowing the exact figures of my income and expense, I can then make concrete monetary goals that I can target for the future. This also shows how much I am spending monthly on certain items, and if I'm overspending on others, I can then re-adjust my spending habits accordingly. If I review my data on a consistent basis, I can stay on track with my short-term and long-term goals." —William Tan, Equities Trader
Saving for Rainy Days
"I start with the basics, by ensuring I've set aside enough for insurance and emergency cash reserves. Once those are in place, the #1 rule I follow is saving first before spending. 10% for long term needs like investments and retirement, and 10% for short term like traveling or purchasing expensive items. My income varies, so how much I save in a month also varies. I spend about 50% or less on monthly expenses like rent, utilities, transportation, and food. I don't keep close track of the spending for "wants" like eating out, watching a movie, shopping, and the like. Since I know I've already set aside for all my important priorities, I can enjoy what's left without feeling guilty. I also review my financial needs and goals at least once a year, or when a milestone comes up, like having a baby." —Zaida Jehan de Guzman, Fellow Chartered Financial Practitioner
Notice any similarities? All of them start by noting how much they earn, and then they set aside a sizable chunk for investments. Let's take a cue from the experts and start budgeting on our own.
To also help you manage your expenses, you can purchase high-ticket items with your credit card and pay for these in easy installments while earning never-expiring points that you can use to pay for your other purchases. Apply for a Citi Rewards Mastercard here.