Opinion > The Ninja Girl
5 Money Move Musts to Start Now: Make Create Budget

Written by Ilocos Sentinel posted on Sunday, August 11th, 2013

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ID+for+FranchisingPHIN THE GIRL NINJA’S LAST COLUMN, I talked about 5 Money Move Musts to Start Now: Make Financial Goal where I outlined 5 steps to create the right financial goal. These are:
1. Make an umbrella goal
2. Make medium-term goals
3. Make short-term goals
4. Evaluate Your Current Capacity
5. Create Plans to Improve

If you remember, Make Financial Goal is the first of the 5 Money Move Musts to Start Now, and these are
1. Make financial goal
2. Create budget
3. Record actual expenses
4. Compare performance
5. Revise money behavior

This week, let’s discuss how to create the right budget that will help us achieve the umbrella goal we have identified.

Create Budget
When creating a budget, your eyes should always be looking forward. When creating a plan on how to spend your hard earned money, always look towards your goal.
After creating the umbrella goal with supporting medium and short term goals, staying focus on how we spend every centavo of our income is much easier. The indiscriminate spending of old should soon be a thing of the past. Soon every cent you spend is moving you towards your goal of becoming financially independent.
In making financial goals, I identified 5 Money Move Musts that you needed to do to make the right financial goal
1. Refer to your goals
2. Pay yourself first
3. Budget the rest
4. Spend happily and guilt-free
5. Keep track

Refer to Your Goals
Ideally whenever we receive compensation for our labors, whether we are underpaid or overpaid, how we spend that money determines how fast we achieve financial independence.
Fortunately, we now have a plan on how to achieve that. When planning on how to spend our hard-earned money, we need to look at our goals always. Let me repeat that. Always.

Pay Yourself First
In the last column, How to Make Financial Goals, we identified have identified saving P4,170 a month as our short term goal such that in 5 years, we have saved up P500,000. (Note that these figures are examples. Your actual number would depend on what you want in life and your current circumstances. Email me if you want FREE help in computing your magic number).
Paying yourself first means setting aside this amount before actually budgeting your money for your living expenses.

Budget the Rest
Liza, what if the remaining money after paying myself is not enough to see me through a whole month? How do I save the money I need to in order to achieve my dreams?
You may have heard of this. Maybe you are even tired of hearing this, but allow to remind you. If there’s a will there’s a way.
If you think what is left is not enough for your living, then there are two things that you can do.
1) Look at ways you can earn additional money. Are a lot of raket/gigs if you really want to look. You speak English fluently? Then why not tutor Koreans. Do you have Internet at home? Why not work as a freelance business process operator? There are so many available gigs like this at Freelancer, for example.
2) Look, really look at your planned expenses. Personally, I spend a lot of money for taxi fares, but once I decided to spend within my transportation budget, I just need to leave the house 30 minutes earlier than my usual so I can catch the train and still arrive on time for my appointments. I also spend a lot of money eating out so now whenever I go out for a meeting, I bring bread or biscuits instead of paying through the nose for a sandwich that doesn’t taste as good as it should be based on how much the restaurant is charging for it.

Spend Happily and Guilt-Free
Now, since you have paid yourself first and have a plan on how to spend the rest, going out is no longer a burden. Rather than thinking whether you can afford a family outing at the mall, you can now spend your energy enjoying your time with everyone since you know that that outing is budgeted. That is part of your spending plan for the month.
As long as you spend within how much you planned, then spending your money should be enjoyable from now on.

Keep Track of Expenses
Finally, it’s time to record how you spend your money such that at the end of the day you can adjust your budget.
For example, at the end of the month, you find out that your family is spending several thousands of pesos watching movies at the mall and at the same time you are paying another thousand for your cable television. It might be the time for you and the family to think this expense and cutting down on it. Is watching movies at the mall really that important? Is watching movies at the mall improve your relationship with one another? Or can you do something as enjoyable but less expensive such as catching Frisbee at the nearest park every weekend?

IN my next articles, I will discuss each of the 5 Money Move Musts: How to Keep Track of Expenses

*****

Interesting Money Facts. How many zeroes are there in US $92 quadrillion? I counted. There are 15 zeroes.
This is how many zeroes Chris Reynolds of Pennsylvania saw in his PayPal account one time he checked. To put this amount, US $92,233,720,368,547,800 to be exact, into perspective, it is 1,300 times the world’s entire income for a year!
Unfortunately for Mr. Reynolds, his quadrillionaire status lasted only for a moment. PayPal corrected its quadrillion-error as soon as it found out about it.
PS I heard from one of my publishers that people who wanted to get in touch with me are writing to them directly instead. You can actually contact me directly through any of the methods below. Do send me an email at liza@thegirlninja.com whenever you want to say hello.

Liza Gaspar is a wealth coach and personal finance enthusiast. She spends
her free time helping out with the projects of the Rotary Club of Makati McKinley
(rcmmckinley.org) and the Gerry Roxas Leadership Awardees (grlawardees.org). Visit
her Web site at thegirlninja.com, email her at liza@thegirlninja.com, or visit her at facebook.com/annalizagaspar and TheGirlNinja.com.

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