Do you often find yourself left with almost nothing every end of the month? If yes, then you are in financial trouble. You might be stuck in the same situation prior to your work overseas, but the difference now is that you are earning in dollars. Still, it’s no excuse to use all of your salary and rely on what you’ll receive the following month.
You don’t have to live from paycheck-to-paycheck anymore. In fact, now is the perfect time to get out of this cycle since you are earning more than what you earn back in the Philippines.
What can you do? Here’s what:
Know your financial situation.
We constantly stress the need to budget and there’s a reason for it. Still, if you follow budgeting properly and still end up almost empty by the 30th, perhaps it’s time to assess where you are financially situated.
How will you do that? Look into your and your family’s lifestyle closely. Are you constantly sending money and/or balikbayan boxes full of goodies to them? Do you often ride a cab instead of walking or riding more affordable public vehicles? Is shopping part of your budget?
These little things could eat up a lot, which also explains why you are living from paycheck-to-paycheck.
Tip: Make it a habit to list all of your spending. This way, you can check what areas you can cut back and make the necessary adjustments.
Differentiate needs from wants.
Needs are non-negotiable – food, electricity, water, shelter, and your kids’ tuition fee. On the other hand, wants are something you can live without – shopping, new phone, annual vacation, Netflix subscription, and the list goes on.
Why should you differentiate? It allows you to prioritize your spending, thereby maximizing your savings. When you differentiate needs from wants, you have a closer look at areas you can cut back and establish alternatives that is not too heavy on your budget. In the end, you will be able to save more, which you can allot for important things such as savings or Emergency Fund.
Practicality is key.
Now that you established needs from wants, the next thing you need to do is to become more practical.
Practical is defined as “reasonable to do or use.” This means you get to differentiate what is good and affordable for you without spending too much. For instance, you saw the latest Nike basketball shoes retailing at $10, but there is somewhat similar style for half the price. Of course, you need to look into the quality as well since this will define whether it’s a practical purchase or not.
In other words, practicality is about cutting back on luxuries. Look for cheaper alternatives that are of good quality. Don’t settle.
Look for income-generating opportunities.
It was said that to attain financial freedom, you need to have more than one income stream. That’s true. In fact, you can’t just rely on your existing job, especially if you want to get out of the paycheck cycle.
What should you do then? Don’t be afraid to look for other income opportunities. Take a second job, venture into online selling, rent extra space in your apartment, or do freelance worker. There are tons of opportunities you can try. It’s just a matter of finding something you can be committed to.
In case you need extra cash, Balikbayad is here to help. Send your loan application online for pre-approval and we will get back to you as soon as we can.