Financial Diva Ka Va? Chapter 3

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One of the most powerful tool in straightening up your finances is…are you ready??? Are you sure? Okay. Here it is. It’s BUDGETING! I know that for some, when they hear the word budget, they feel cynical about it. Well, I don’t blame anybody for that because I myself felt bad when I started budgeting. It suggests negative feelings because we are brought up in a society where consumerism is prevalent… but if budgeting is done right and done in a manner that you are comfortable with, it would actually be an enjoyable experience, very rewarding and will certainly help you in the long run. Trust me on this one.

I really believe that before you can budget, you need to look inside yourself. It sounds cliché but it’s true. Budgeting comes from within. It is psychological and emotional. It is knowing about what you NEED and what you WANT. It is about setting your priorities straight…knowing what is important. The process of budgeting is easy but the mental and emotional preparation is hard. This preparation will of course vary from person to person depending on their level of determination, motivation and willingness to change. It will take time and effort. The question is, are you ready to conquer yourself?

Let me tell you about the process ASSUMING that you are now ready to budget. Budgeting is knowing how much money is “coming in” versus how much money is “going out”. It is mainly the allocation of money. Plain and simple.

Money “coming in” of course are your income (wages, interests, royalties, income from rental properties etc) and money “going out” are your expenses (food, savings, rent/mortgage, utilities, credit cards, loans, clothing, gasoline, cellphone, entertainment, miscellaneous). Write all these down on a sheet of paper starting with your monthly income on top and your monthly expenses at the bottom. Total the income and total the expenses and then subtract the total expenses from the total income. Let’s all hope and pray to all the saints of savings that the balance is positive! Tic toc tic toc…what is it??!

If it is positive, you’re a diva. Brava! Keep up the good work and more power. Mwah! If it is a negative (gulp), then, let me say this from the bottom of my broken heart…IT’S NOT TOO LATE FINANCIAL DIVA APPRENTICE! I am sorry to say this but in order for you to make it positive, you will either have to give up some of your expenses or augment that income. You can do this! It is easier said than done but YOU CAN DO IT! Just think and stick to your goals and keep motivating yourself and you’re on your road to financial recovery.

For simplicity’s sake, let’s talk about budgeting with in regards to those with regular income. One budgeting technique that I highly recommend ( I tried this one and it worked for me!) is dividing your total monthly expenses into how often you get paid. Example, if your total expense for the month is P10,000 and you get paid twice a month, divide your expenses into two EQUAL amounts. Pay P5,000 of your bills from your first paycheck of the month and pay the other P5,000 from your second paycheck of the month. This way, paying your bills wouldn’t be as dragging as paying it all in one time. If you get paid weekly, divide your expenses into four or five EQUAL amounts and so on and so forth. The keyword here is EQUAL. If it’s not equal, then at least close to it. If you want to follow this technique but your expenses are set up to be paid on different dates, you can always renegotiate with your creditors to change your payment dates. There is no harm in trying. I believe that it is easier to budget if you do it this way…if the expenses are scattered evenly alongside your income.

Again, of course, situations differ. One technique working for me might not work for you so you have to formulate your own. A budget that will work for you. Good luck.

Now, you might be wondering why is savings on the expense side of my sheet or wondering why is it even there? Let’s talk about how to save money next time.

As for now, smile and spread the good diva spirit.

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Author: Marvz Es

Once upon a time, there was little diva in the island of Philippines (La Union in particular) who didn't know anything about finances. He just spent and spent and spent all his moolah. No savings at all. Nada. Who needs one anyway? And then, this little diva moved to Hawaii. Yes. Hawaii. He carried the same habits... and then one day, he experienced an "emergency" situation. And he didn't have any greens. He felt so helpless. He felt depressed and powerless. To cut it short, after so many sleepless nights and tachycardia, he got over it. Yes. He did! Our little diva turned around his finances. He changed his attitude towards money. Our little diva knows now the value of hard work and the value of the hard earned money. And now, he wants to share his experiences to his fellow Filipinos to be smarter with their finances. Are you ready to diva?