How to budget and save money

It is no secret that the global pandemic has taken a toll on economies around the world. In difficult times like these, it is more important than ever to be mindful of your spending and to make sure that you are saving as much money as possible. While it may seem like a daunting task, making a budget and sticking to it can be surprisingly easy—and incredibly rewarding. Here are our top tips on how to save and budget money.

Reasons to save and budget

1. Prepares you for unexpected expenses

Life is full of surprises, and many of them can be expensive. Whether it's a sudden medical bill or your car breaking down, having some savings set aside can help you weather any financial storms that come your way. Without savings, an unexpected expense can quickly throw your entire budget off course.

2. Helps you reach your long-term goals

Everyone has long-term financial goals, whether it's buying a house, going on vacation, or retiring comfortably. However, these goals can often seem out of reach if you're not saving regularly. By following smart money saving tips and setting aside money each month, you'll be surprised how quickly your savings will grow—and how much closer you'll be to achieving your long-term financial goals.

3. Gives you peace of mind

Worrying about money can be incredibly stressful. If you're constantly worrying about how you're going to make ends meet or pay your bills, it can take a toll on your mental health. Having a savings account gives you a cushion to fall back on in case of an emergency, which can help reduce stress and give you peace of mind.

How to save money and how to budget

1. Make a budget

This budgeting tip may seem like a no-brainer, but you'd be surprised how many people don't actually have a budget. If you don't know where your money is going each month, it's difficult to make informed decisions about how to save. Track your income and expenses for at least one month so that you have a clear idea of where your money is being spent. This will also help you identify areas where you may be able to cut back.

2. Automate your savings

One of the best ways to make sure you're saving money each month is to automate the process. Have a certain amount transferred from your payroll account to your Metrobank savings account each pay period.

3. Pay yourself first

When you get paid, put some money into savings before you start spending on other things. This way, you'll be less tempted to tap into your savings.

4. Set goals

What do you want to save for? A down payment on a house? A new car? A family vacation? Having specific goals will help you stay motivated to save. Make sure your goals are SMART: specific, measurable, attainable, realistic, and time-bound.

5. Jot down your purchases

For one week, write down everything you spend money on—no matter how small the purchase may be. At the end of the week, review your expenditures and see where you can cut back or make changes altogether.

6. Create a system

No matter which method works best for you—envelopes labeled with different spending categories or a digital app—find a system that keeps track of your spending and helps you stick to your budget each month.

7. Live below your means

One of the best ways to save money is to live within, or even below, your means. In other words, don't spend everything you make each month. If possible, try to live off of 80% of your income and save the remaining 20%. This will help ensure that you always have some money left over at the end of the month.

8. Start small

Don't try to overhaul your entire financial life overnight—it's just not realistic (or sustainable). Instead of making a bunch of drastic changes all at once, focus on making one small change at a time. For example, if you're still trying to learn how to save for an emergency fund, start by eating out one less time per week or bringing your own baon to work instead. Once that becomes part of your routine, slowly start making additional changes until reaching your desired goal.