(Disclaimer: I am by no measure an expert at managing personal finances. Heck, I don’t even have a steady income. I’d just like to share the many things about saving that I’ve learned along the way.)
Instead of sharing How-to’s and What-to-do’s, I’d like to impart some of the lessons I’ve learned through making the wrong decisions when it comes to saving money.
This is something I think everyone should avoid, but a lesson those of us who are unemployed should especially heed. As a student, I was given a weekly allowance. Now, as a freelancer, I get payment for my services. It may seem like I have a pretty solid income stream, but I don’t. Allowance dries up in the summertime and freelance projects stop. As such, I’ve learned not to over-project my finances.
In the past, I would write down how much I am going to get months in advance and budget my money accordingly. Sound money advice, right? Wrong. At least, for those who are unemployed like me, thinking this way is not going to help. Expecting the same amount of money too far into the future prevents you from planning for emergencies.
Here’s an example. Let’s say I’m currently getting 500php a week from my writing job. So, in a month I’ll be getting 2,000php. (OK, I know this isn’t a huge sum of money but bear with me, I’m still a dependent). I see this pair of shoes that I want to buy. It costs 1,500php. I think, “Well, in two months I can afford these shoes because I’ll have 4K, and 1.5K is less than 50% of that. That’s good enough. I’ll still have money left over to put away.” So, I buy it after the first month thinking I’ll still have money next month anyway. But as the freelance game goes, nothing is constant. Payment may be delayed or I may get dropped from the project. A lot can happen in 2 months. In the worst case scenario, I’m left with 500php to spend for the second month supposing I get dropped by my employer. T_T
So, what I’m trying to say (in so many words) is that you should budget your money for what you have presently, and not for what you’ll think you have in the future. As the saying goes, “The only thing constant is change”. And if you want to have more than spare change in your wallet, always plan for the worst case scenario. 🙂