Jan 23, 2020
How to stretch your salary like a pro
We have all been there. We have all found ourselves without a cent in our pockets on the last days of the month, yet we never seem to know where all the money went to. In a world where the global economy deteriorates more and more each day, everyone should know how to manage their money in an efficient manner. It does not matter the amount of money we make, if we know how to manage it, we will be able to stretch it without being financial experts.
Is this really possible? The secret to saving money is –pause for dramatic effect- establishing priorities. But how do we know what to give priority to? If your hard-earned money is vanishing at the end of the month like magic, it is time to sit down and evaluate your expenses once and for all.
Planning has to become a monthly or even a daily routine for messy spenders. First of all, there are three things that must be taken into account: income, debt, and expenses. The easiest part is establishing our income, the rest will be like seeing our worst nightmares come true, but it will be over soon. No one actually likes knowing how much money they spend each month, but the good thing about planning is that we can figure out how not to bleed out our bank accounts each month and maybe even save up to a 10% for that beach trip you are dying to take.
The experts have spoken, and they recommend we divide our income this way:
30-35% for living expenses (including utilities).
16-20% for food and groceries.
Invest 17-19% in transportation (including insurance, gas and public transportation).
5-7% for clothes and services (including dry-cleaning, washing, and drying).
Invest 5-9% in health (insurance, pharmacy expenses, etc.).
3-6% for entertainment (it cannot be all work and no play).
Save 2% - 10%.
For miscellaneous expenses like newspapers, education, personal grooming, contributions, etc. destine about 7% to 12% depending on your other expenses.
Once we have a clear vision of where our money is going, it will definitely be easier to organize and follow our parameters each month, until we get a constant flow on our bank accounts.
There are thousands of useful apps to help us get our prioritizing on (Daily Budget for iPhone, for example), but the most important thing is taking that first step towards economic stability. All we have to do is reach out and take it.