How I Save & Spend Money Now
I want to start a series in my blog that talks about my journey in embracing minimalism, or living more intentionally.
It is quite odd to start it with a topic about money – instead of decluttering, or how my room looked like (well, it s not all white and wood – the usual minimalist aesthetic – but I do love wood!).
I would like to think that I have a better relationship with my finances after embracing minimalism. It is not because I earn more. I guess, it is because it is never really my goal to be rich and live a luxurious life (also, I never dreamed of becoming a princess and marrying a prince).
I just want to be able to enjoy and experience things, while living a comfortable life. But of course, I love getting paid good for the work that I do.
When I was younger, I couldn’t wait to earn my own money so I could spend and buy everything I wanted (I think we were all dreaming of that!). And that was exactly what I did. I didn’t even earn a lot back then. But it is nice to be able to buy things you want without worrying about the next paycheck. And even if I no longer have a regular pay (because I work freelance), I still enjoy the financial independence and better relationship with my money.
The truth is, I only started saving money after I had my second job. I have to remind that it is important to have an Emergency Fund (that is 3 to 6 months of living expenses). I spend money for experiences and travel.
Now here comes my tips for managing my finances:
1. I pay myself first. We all know the formula of Salary – Savings = Expenses. I still follow it even if I don’t get regular monthly salary.
2. I keep a monthly budget. Just like running a business, I keep a monthly budget for my expenses, income and investments. I make sure I do not go beyond the budget I set for a specific category. At the end of the month, I get a view of my Starting and Ending Balance.
If you want to start allocating certain percentage and budget for your expenses, you can check out calculator.me and just input your net-income. The site would automatically calculate the amount based on the suggested percentage.
3. Before I buy something, I calculate how many hours of work I need to pay for it. It has become part of me to think how much of my freedom and time I have to give up to pay for something. Is it worth it?
4. Needs vs Wants. Even if I identified that something is a need, I still assess if the item is something that would add value to my life and how much of my time I need to allot to care for the new item. I am very careful with the things that I allow in my life. So yes, some items may stay in my cart for a while.
If there is anything that makes me feel happy, it is the realization that I don’t need to own certain things to feel complete, or to feel validated (although I admit, there are a few material things that I am curious about).
I think my spending habits has also changed because of the COVID-19 pandemic. There is a reduce in demand for travel and leisure, as such, my travel budget has been allocated to more savings.
I am still in this journey of self-discovery and growth.
I hope you find this post helpful.
Leave a comment if there are topics you want me to write about.