6 Ways on How to Drastically Change your Financial Life Now

I finally did it.  Yes, I cut my hair after more than a year.  It was a difficult decision and I was a little scared  but it felt good after.   Changing your financial life is also like that.  It’s difficult and a little scary, but when you do it, it will definitely do you good.

Here are 6 Ways on How to Drastically Change your Financial Life Now!

Consciously list all your expenses.

Yes, be it a cellphone  load or a piece of candy you just bought.  List everything.

This perhaps, is one of the most difficult tasks you have to do to change your financial life.   But believe me, this is one of the most effective strategy you can do by just making it a habit.  In fact, all other tasks below are somehow connected to this.  So, never think you can get pass this one.

List every expense and income for at least 3 months, then, at the end of 3 months, take the average of each expense you incurred.  Then that’s your monthly working budget.  Make sure that your income is more than your expenses.

Changes that can happen by doing this:

1. You can form your household or personal budget. This will guide you not to overspend in the future.
2. Consciously listing everything can make you instantly frugal, believe me. I did.
3. You will know where your money is going instead of wondering where it went, which happened most of the time, right?

Have the courage to Pay everything in CASH

When you pay cash, you can “feel” the money leaving you.  This is not true with credit cards.  – Dave Ramsey (Personal Finance Guru).

In fact, he said that in a study of credit card use at McDonald’s, they found out that people spent 47% more when using a credit card instead of cash.  This is money you could have saved!

If you have to use plastic, then use a debit card instead.

Changes that can happen using this:

1. You can cut out habits that can make you spend more.
2. You can really feel the “feel” using CASH. Believe me, I feel it every time I use cash.
3. It can stop adding to your debt in your credit card if you already have.

Arrange your Budget using an Envelope Budgeting System

Use the envelope system in budgeting.  If you have done the first step above, probably, you already now know how much is your monthly budget for everything like: Groceries, Restaurants, Entertainment, Gasoline and Clothing and etc.

For example:

Groceries: 8,000/month

When you get your paycheck, cash it then put 4,000 in the envelope.  Every time you do your groceries, use the Groceries envelope.   If there is change, put it back in the envelope.  On your second paycheck, put again 4,000 in the envelope.

Changes that can happen by doing this:

1. You don’t overspend.
2. It will teach you discipline. If you run out of grocery money, you eat leftovers instead of going to food shopping.  If your gas money is slipping away faster, then limit your trips or even commute.

Nurture your Financial I.Q.

Personal Finance is 80% Behavior and 20% Head Knowledge.  – Dave Ramsey. 

But how can you behave and act appropriately if you do not have Head Knowledge at the very start.

I say, read books, use social media to read and learn how to save, invest and earn more.

Are you using social media to your advantage? Or Are you using social media just to snoop around your friends life?

Changes that can happen by doing this:

1. You will know where to put your money to make it grow.
2. You will acquire knowledge that can help you change your behavior on money.
3. You can increase your financial I.Q. that can help you and your family.

Give Back

They say if you give, you will receive 10 fold.  The universal law of tenfold return, stated simply, that when you give away, it will come back to you multiplied ten times.

You can start by giving 10% of your income.  It depends on your belief system.  This portion of your income can act as your tithes or as a portion of your income that you can be given to help others out.

Yes, very difficult at first, but if you try it, it is the most liberating experience you will ever feel and you will feel good inside.

It is one way of telling yourself that  God owns everything, that He is your business partner, and if you give back to him even just 10%, then you are declaring that your financial life will be blessed more by making Him your Business Partner.  Having God as your Business Partner?  How cool is that?  Do you think your financial life will succeed?  Definitely, Yes.

Malachi  3: 8-10
Did you know that Tithing was the only part of the Bible where God challenged man to put Him in a test?

 “Will man rob God? Yet you are robbing me. But you say, “How have we robbed you?” In your tithes and contributions. You are cursed with a curse, for you are robbing me,  the whole nation of you. Bring the full tithe into the storehouse, that there may be food in my house. And thereby put me to the test, says the Lord of hosts, if I will not open the windows of heaven for you and pour down for you a blessing until there is no more need.”

Try it, put God into a test by “tithing.”

Changes that can happen by doing this:

1. If you are giving back, you are declaring abundance.
2. The purpose of earning is not only for yourself. It is also for others.
3. The more you give, the more you will receive. That’s God’s promise, not mine.

Establish your Emergency Fund

Yes, establish your emergency fund.  It is ideally, 6x your monthly living expenses.  Meaning to say, if you spend 20,000 per month on your expenses, that’s (20,000 x 6 = 120,000).  If you do the first step, listing your expenses and knowing your budget, this is easy for you now.  If you can only save x3 of that, then, that is still ok.

Having an Emergency Fund or a Rainy day Fund will help you for sudden unexpected, necessary and urgent expenses that may suddenly happen.

Changes that can happen by doing this:

1. You sleep better at night, knowing you have cash saved for emergency. It is peace of mind.
2. Sense of security.
3. It’s a buffer between you and insanity.

Now, let’s summarize:

C – Consciously list all your expenses. 

H – Have the courage to Pay everything in CASH

A – Arrange your Budget using an Envelope Budgeting System

N – Nurture your Financial I.Q.

G – Give Back

E – Establish your Emergency Fund

Now, that’s not too difficult to remember, right?  By doing SOME of those can change your financial life, but by doing ALL of them, you are not only after change, you are after FINANCIAL FREEDOM.

Everyone thinks of changing the world, but no one thinks of Changing Himself.” – Leo Tolstoy

Believe that Change is Coming,

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Pinky De Leon-Intal, MD, RFC

Doc Pinky is a licensed Medical Physician, Internationally Registered Financial Consultant, Certified Investment Solicitor and Associate Wealth Planner and Estate Planner of the Philippines. She loves to educate and spread financial literacy. She is a Lactation Consultant. She loves to travel. She is a devoted wife and mother.

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