Personal Finance- Guide on how to manage your finances though with a low income

How you maximize or streamline your finances may depend on your income and, at times, savings.

Apparently, most people let their salary control their quality of living. This then include from the type of things that they buy, the moments they choose to enjoy and the quality of food that they eat, preferring only those which are within the budget. Of course, it is important that we take budget as one of the primary considerations in everything that we do. However, it is also equally important that we consider financial survival without compromising what we deserve.

Don’t you know that there are practical ways to create a fulfilled lifestyle even with a meager income? Don’t let your money define the life that you live. Let your kind of living mirror how you personally manage your expenses.

Following these tips may want you to give up your traditional habit of spending but, it does not encourage you to quit from the kind of lifestyle that you want to be in. Enjoying your life while managing your finances may turn out to be a big headache! 

It is quite interesting how someone who earns below or within the minimum get to own her dream car while paying for her early retirement plan.

Paying your loans and long term investment, not to mention your daily and emergency expenses, is for  sure more than just a struggle unless you change the way you do things and embrace the new means of keeping financially whole and able.

  1. Track your expenses and learn the basic of budgeting
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I believe most people practice tracking their expenses. But it’s your attitude and mindset in monitoring the same sets the difference. Some ways of monitoring your expenses are through using notebook planner, excel files, or by keeping receipts. The latter is least commendable though for not all expenses require receipts.

For most of the people I know, excel file works best because it is easy to edit, paperless, portable and transferable– advantages you cannot enjoy when using notebooks and pen.

List all your significant expenses as much as possible. For small amounts, you may just sum them up in one category.

Once you have your list of expenses and things to spend to, you can now start budgeting. Budget your income by percentages according to your needs.

By tracking and keeping up-to-date of your expenses, you are able to determine as to where your money go and as to what are the expenses responsible for the money’s fast decline.

No matter how small your income is, track it and understand its trend.

Once you find out that a big chunk of your monthly earnings goes to food or transportation or what not, you can then now think of an alternative to lessen wasted pay-outs and adjust your budget according to your needs.

2. Own a credit card with low membership fee

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It’s acceptable that a lot of people don’t like credit cards. However, for starters, you can actually put credit cards in a very good use. Just be sure that you get credit cards for good reason and you spend them practically and wisely.

Credit card companies offer promos, discounts and installments. With the said perks, you can now enjoy on making big purchases without sacrificing your monthly income for your other basic needs. Instead of waiting for months or even years to save for a particular merchandise, you get to have it by just swiping your card and make a staggered payment monthly.

Take note however that when availing installment packages, be wise enough to choose those with low interest. There are even those with zero interest and all you got to pay is your monthly or annual membership.

Remember, credit cards are useful to keep up with your finances but certainly know when using it is already good enough.

3. Buy quality things not necessarily with a brand

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Some people are obsessed with brands. There’s nothing wrong with choosing branded stuff but just be sure you are buying those with the right brand. But if you are a practical spender, you don’t go after brands, you go after quality.

There are a lot of good stuff outside your convenience stores. If you are adventurous enough to enjoy shopping near the streets or market-market, you can actually grab quality merchandise in their lesser price. 

You may also want to check directly boutiques where things are often on sale. You also have to remember that buying quality things is equally important as buying it at the right price.

Let’s do the math here: When you buy fake stuff only because they are cheap, once it gets damaged, you buy again. This would then double your expenses. Buying cheap things twice, thrice or more is apparently not practical at all over buying expensive stuff only once.

The formula, quality/price! Both ends should meet halfway.

4. Educate yourself on financial risks and opportunities

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Do not stay where your income stays! Get out and learn.

You are only able to pull up proper financial management if you teach yourself how to.

Nowadays, educating yourself financially is not anymore a hassle unlike before. You actually don’t need to go to school to take this particular course. You can just surf the internet, read books or subscribe to financial advisors blog for free. When you use the internet, just be careful.

Select only credible sources because again, not everything in the internet is true.

5. Save and invest

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Save. Invest.

Always, always, always make your savings and investment be part of your monthly expenses.

Saving at least 15-20% of your salary wouldn’t hurt no matter how small your income is. In fact this runs to your advantage in time. Go open a bank account and start maintaining an amount which is at least three times of your monthly salary. Also, do not hesitate to invest so long as you know the risks of the business you are getting into. Invest to those where a lot of others have been successful to, or to those you know will never betray you or to those who have less chances of getting bankrupt.

Indeed, managing your finances especially if your income is only enough to survive is tough.

However, if you have a good attitude and equipped with financial education, you get to go where you want to, buy more than what you need and enjoy things you desire. You don’t have to limit yourself to what your wallet can! Explore.

Know what else are available for you and learn how to get those. You may have meager income today but before you know it, you are actually living your life to the fullest.

-I hope this blog can help and inspire my readers regardless of where they are from or whatever they do in life!

For Life and Law is also open to any article contribution which will potentially inspire others

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