With a share of 26.6 percent of the total employment rate in the Philippines, according to the Labor Force Survey of January 2018, millennials between the ages of 25 and 34 are considered to be the largest number in the labor force.
Demographics show that millennials dominate the country’s working population. Do you belong to this branch? If so, you may experience the same financial hardships most millennials face.
Having a small salary and not knowing how to budget is one of the many financial problems facing millennials. While you’re waiting for a raise or working on your savings, here are some budgeting strategies to try.
The 50/30/20 system is a guideline for managing your earnings on a monthly basis. It requires you to spend 50 percent of your salary on basic necessities, rent or mortgages, bills, and minimum debt payments.
30 percent of your takeaway salary can be used for desires such as clothing, gym membership, or equipment for any hobby. These things are nice to acquire, but know that they are optional. You can survive without these needs. The 30 percent can also be used for savings, which is advisable when you start saving for major purchases like a brand new car or new house.
The remaining 20 percent percentage will be used for debt repayments and additional savings. When you pay off all of your debts, you can allocate more money to your bank account. This percentage should be used to get funding when you set up an emergency fund.
Cash handling system
The cash envelope system is a classic budgeting tool that uses cash instead of credit or debit cards. It is known to many people around the world for its effectiveness. It enables people to keep track of their budgets and prevents them from spending too much. With this scheme, you need to put your spending categories in envelopes and put a preferred amount of cash in each of them. For example, let’s say you devote 1,000 pence to groceries every month. Put this amount in an envelope labeled “Grocery” and use it to purchase all of your supplies.
The cash envelope system is effective for most people because it allows them to keep track of how much is left in the envelope when they purchase products. This method shows you how to adjust buying preferences according to the allocated budget in the envelope.
This budgeting tool may be widely used, but it will help you avoid the dangers of using a credit card for impulse purchases.
However, as a Millennial, you may find the cash handling system “a little too old-fashioned” for your financial approach to budgeting. As a solution, you can go digital.
If you prefer to have all of your finances listed in a Google or Microsoft Excel spreadsheet, Tiller will take your budgeting strategy to a new level. It’s the only app that can securely link your credit card and bank accounts and extract their details in a digital sheet.
Tiller saves you the tedious manual consolidation and formatting of your financial data. It also has a comprehensive list of possible expenses with the corresponding amount you need to spend. It generates your entire financial situation based on the details of your accounts.
Aside from the sheet itself, budget templates are also available on Tiller so you don’t have to create one from scratch.
When inflation hit 6.4% last month, the market is forcing people to make ends meet. The prices of goods continue to rise and your salary is far from having an increase. Try these budgeting strategies. They were created to alleviate your financial problems caused by the current economic situation.
Josh Mascariñas is a content writer at MoneyMax.ph. Save money on auto insurance, credit cards and credit when you compare and apply at www.moneymax.ph! Visit our website to learn more.