Although I’ve had my slip-ups in the past, I can say that I have been spending wisely more often than not. I am notorious for being the budget police because I record all our income and expenses. As in all of them–down to every centavo. Arjay kind of hates me for being that way because he can’t just buy whatever he wants. He’s a sucker for pets and gadgets. I am happy to report that this is now under control. LOL! And when he does buy something unplanned, he gets a sermon from me…with lots and lots of reminders why we agreed to plan our expenses in the first place.
Although it’s not very fun to have a budget police around, he is thankful, too, that I took charge of our finances because we were able to pay off our huge credit card debt two years ago, our expenses are controlled, and we have savings! We are also on our way to building our own house–all thanks to creating and sticking to a financial plan. All we have left to do is to invest on insurances–but we’ll have to review our financial plan to fit those in.
How did we take charge of our financial situation?
When Arjay and I got married, we were huge spenders. One kid + Two income streams + Living with my parents = Lots of unnecessary spending. It was six months into our marriage that we realized that we have no savings, no investments, and a huge credit card bill. That prompted us to evaluate our spending and create a financial plan.
The financial plan we created includes our income, our reduced expenses (we agreed to spend only on what is essential), the debt we need to pay off, the amount we need to save each month to acquire investments (i.e. a house and lot), and our savings. Once all these are set, we devised a monthly budget plan that is enough for our expenses, savings, debt, and future investments.
If you plan to pay off your debt in installments (like what we did), divide the amount into the number of months you plan to have to paid and commit to it. For instance, if you have credit card debt worth PhP12,000 and you plan to have it paid within a year, be sure to commit PhP1,000 a month to make sure that you’ll be debt-free by the end of the year. The same goes when saving for future investments.
What really helped us stick to our monthly budget plan is MoneyBook. This is a free app you can download on your iPhone (I’m not sure if this is available for Android users though), which will document the flow of your money.
I absolutely love that aside from recording income and expenses, it also has a budget tracker. This wasn’t available when I first downloaded the app, but now it will show you how much of your monthly budget you have left! With that new feature, you won’t go over the budget for sure.
As you can see in the photo on the right, I have set our monthly budget to PhP36,799. This includes our groceries, bills, transportation expenses, and The Princess’ tuition. We’ve let go of all our credit cards already so we no longer worry about credit card debt! Yipee! We also shifted to automatic savings so we need not include that in this budget since our savings are automatically deducted from our income and sent to a separate account.
Super fast and super hassle-free, right?!
With all these things–spending trackers, automatic savings, etc.–easily available to us, taking charge of your finances is actually much easier now. All you need to do is take a step towards financial freedom and you’re already on your way there!
Have you taken charge of your finances, too? Care to share how you did it?