Money is important, it is true. This is why people are doing their best to get a job by applying their professions while other people are building a business to have a money in a wise way. However, their hardwork were paid off but only for a short term because they tend to spend their money either in their needs or wants.
When you are in a middle class status of an individual and someone asked you “do you have savings?” your answer is probably “nothing, because I don't have an enough money to save” but in my opinion, you actually have a money but you don't know how to manage it correctly.
In the end of this article, you will encounter the following:
Know your needs and wants
Manage your emotions
Don't buy the things that you don't need—don't follow the trend.
Know your needs and wants
Knowing your needs and wants is a simple mattee that everyone is having a hard time to determine the difference of these two. The needs simply means are the things that you can't leave without it such as food, water, medicine, shelter and etcetera while the wants are the things that you want to buy because of your desires such as luxurious things such as lipstick, make up, a luxurious bag and etcetera.
Let us borrow this statement from Investopedia, “Senator Elizabeth Warren popularized the so-called "50/20/30 budget rule" (sometimes labeled "50-30-20") in her book, All Your Worth: The Ultimate Lifetime Money Plan.”
In this budget rule, the 50 means is 50% of your money will be your budget for your needs. It includes your house rent, water and electrical bill, foods, medicine and etcetera. The next one is the 30, it means that 30% of your money is for your wants, it is foe your Netflix or monthly subscription, desires and etcetera. Lastly, the 20% is for your savings. In this case, you will have a savings worth of 20% of your total money. You can apply this rule every month or when your salary was given to you.
Manage your emotions
Your emotions has a big impact when it comes to your personal finance. This is exactly the problem why you can't save your money. When managing your money, it is important to know the things that you only need in your daily living plus the things that you need when there is an emergency—emergency fund.
Put yourself in a situation where you are going to mall, it is important to list all the things that you need to buy including the things that you are planning to buy. Remember, if you have something that you want to buy, it should be listed on your list so you can budget your money correctly.
If you will do the opposite and didn't manage your emotion, it is possible that you will buy everything that you see on the shopping area especially if you like it but you didn't know where do you need that thing. Example, buying a television even you already have a television. Do you think it is necessary to buy a new one? I don't think so.
Don't buy the things that you don't need—don't follow the trend.
This is a huge problem on people, they love buying the things that they don't need because they are following the trend. If the new trend is iPhone 12 they will do their best to buy it even though they are not that much rich who can afford everything. It is sad that people are trying hard to buy what they want to the point that (sometimes) they will borrow a money to buy their desire.
In the Philippines, there are these two online shopping companies called Shopee and Lazada they are having a sale and discount for the buyers every month. This marketing strategy is effective because there's a lot of items were sold every month because of this sale season. Why? Because this “sale season” is always a trend and every person is doing their best to add something on their cart even though they don't need it.
Conclusion
Managing our finance is one of the most difficult thing to do, but once we mastered it you will have a financial freedom especially if you know how the money works like paying taxes, house rent and etcetera.
The best ingredient on this matter is learning to control your emotion and knowing the difference of needs and wants for you to buy and provide your basic needs as an individual.