The Struggle is Real: You Really Need Money, but Your Wallet is Empty
A good number of people struggle to manage their salaries up to the end of the month, making saving virtually impossible. Payday has been and will forever remain the happiest day for most employees and when it comes to ideas on how to spend the money, there is certainly no shortage of ways; food, rent, clothes, family support, gifts, etc. However, most people battle with managing their salaries to last till the end of month. This is, without a doubt, one of the biggest problems facing many employees today.
While we cannot give you hard-and-fast rules for where to put your money and how best to make it last, we did come up with a few steps to keep your salary management woes in check.
- Set a savings goal: In all honesty, most people fail at their attempt of prudent salary management because no financial or savings goal is set. Doing this helps one figure out a direction and automatically instils healthy spending habits in the process. Set realistic and achievable targets to enable you accomplish them. If you are able to meet your monthly targets religiously, challenge yourself to higher targets and you will see your savings multiply tremendously. One of the best ways to ensure that your effort does not go to waste is to lock your savings up in a fixed deposit, treasury bills or some other form of investment.
- Plan/Budget: Do not wait for your salary to be paid before making a budget. The first step is to study your income and expenditure. Start by writing down how much you earn. You might know your annual salary, but you will not actually receive that much in your pocket after income tax and other deductions. So, look at the net monthly income on your payslip as this is the amount you will receive. You should have a basic budget or financial plan on hand that can easily be updated when necessary. The fundamental idea here is to group the unavoidable expenses such as utility bills, groceries, tuition fees, transportation, etc, and ensure there is something left for savings and financial contingencies. Budgeting will help control overspending to avoid finding your bank balance below your expectations as the month comes to an end.
- Pay yourself: This might sound a little strange but you need to pay yourself from your own salary. This basically means following your budget outline or even if you do not have one, setting aside an amount for your personal expenses which may include groceries, car servicing, home up keeping, entertainment and a few other things. Ideally, you should allocate yourself about the same amount each month. Push the bar as low as you can and treat yourself to a fancy dinner from excess money that you did not expect to save.
- Proofread your pay slip: A pay slip is given to you for a reason but most employees barely even look at it. Once you are handed your pay slip, do not just concentrate on the amount credited. Proofread the entire slip for any errors that might have been made by the accounting or finance departments. In large organisations, it is possible for errors to occur during this cumbersome process, hence the need to check your pay slip to ensure that the right deductions have been made and bonuses, increments or incentives due you have been duly credited. In case of any discrepancy, notify your human resource or finance department immediately and seek an explanation. This way, you can ensure the arrears are credited as soon as possible.
- Plan long-term for big purchases: Try to avoid making big purchases in the form of impulse buys. Try to weaken impact of the bigger expense by saving for it over a few months. There is even a probability that after a month you may realise you did not even need the item after all.
- Give to charity: A good number of successful people make it a point to give a part of their earnings to charity. Now, we are not saying give with the motive of receiving, but be generous. You do not have to earn that much to help another person out; it could be something as little as buying lunch for a cleaner in your office to giving food or money to beggars on the street and you will not find yourself crying poverty every month. It is the law of sowing and reaping.
Living from pay cheque to pay cheque is not fun but it is very real. If this sounds familiar, then you should already be thinking of how to manage your salary. You will come to realise that a lot of life’s greatest achievements boil down to basic management skills and you would be quite surprised that some of these basic skills can be traced back to managing salary wisely. Always remember that it is not the money we earn that makes the difference but rather, how we manage it.