In: FAN MAIL FRIDAYS
FAN MAIL FRIDAYS: My rule when it comes to spending on material pleasures
Happy Friday! I know most of you have been dreading the work week because after all, we all came from a very long vacation! Well whaddaya know? It's the weekend once more! :)
Our Fan Mail Fridays for today is a good topic that could help you with your financial resolutions this year. Thanks to one of my readers, Mickey, for bringing this up!
I remember you mentioned back in your candy bauletto
marshmallow experiment post way back that you work hard to achieve your financial goals that year. Can you do a blog post with a couple of personal finance tips for women?
Happy New Year! Just to set things straight, I'm in no way trying to be a financial advisor or expert here-I'm just a simple girl who has her own strategy when it comes to saving money and hitting financial goals so please, take my tips with a grain of salt. As always, what works for me may not work for you and vice versa!
Some of my best posts in this blog, according to my readers, are the ones about Delaying Gratification-mini stories of my personal success on achieving my material dreams. (To give you a background, click HERE)
Now aside from the happy ending of my stories, I guess what everyone wants to know is how the story or my journey went. Click READ MORE to know how I was able to achieve my material goals.
Okay to set things straight once more, what I shall discuss in this post only applies to spending on material pleasures (be it a car, shoes, bags, clothes, jewelry, gadgets, and the likes). This does not include the savings for your daily expenses, emergency, children, and retirement. (Please visit a trusted finance blog or consult with a legit financial advisor for those) These rules could be applicable to other investments too, but I won't comment on that because I haven't done any form of investment myself. ;)
Photo Credits: biggerpockets.com
THE 50/50 RULE
This, my friends, is the golden rule I follow when it comes to spending and buying my dream items. My boyfriend read it from a book and he shared it with me-it was a very sound advice and I tried it with my first luxury bag purchase, Prada Tessuto Gaufre' and I loved it.
So how does the 50/50 Rule work?
BEFORE BUYING YOUR DREAM ITEM, YOU HAVE TO EARN 50/50 FIRST. 50% GOES TO YOUR DREAM ITEM, 50% GOES TO YOUR SAVINGS.
So let's say Prada Lux Saffiano's retail price in the Philippines is P74,000.00 and this is your material goal for this year. That means you have to earn P148,000.00 in your spending account this year before purchasing this item. It's that simple. The beauty of this rule is, you get to own your dream item without worrying that you'll go broke and borrowing money the next day because you still have the other 50% that you can divide within your other funds, use to spend on a daily basis, or use on situations that need immediate funding. In short, the other 50% is your safety net that will help you get by until the next payday.
The first time I did it, I challenged myself. Instead of 50/50, I changed the latter value to 200 so my personal spending rule became 50/200. 50% went to the item, 200% went to my savings. So if my dream item costs P100,000, I should earn P400,000.00. Heck, if Bill Gates can amass wealth, you and I can too because we're all the same-we all poop, pick our noses, cry, and get sick. :D
I was successful with my 50/200 rule the first time I did it and I loved it even more because I also got to buy clothes and shoes to match my bag, go out and have a nice meal in a decent restaurant, treat my BF, friends, and family, and pay for my dog's sudden hospitalization, but still have a good amount of savings left in the bank.
If you don't buy the 50/50 rule, here's another way to save for that dream item:
Photo Credits: examiner.com
I had a discussion with one of my friends, Tara, who used to work for a big insurance company regarding saving for your material pleasures. She mentioned a good way to achieve your dream item and that is by growing your money by means of investment. Manual saving (aka storing your money in the bank) will take a lot of time whereas investing it can shorten the waiting period. This pretty much works for any material goal, but could be a more favorable option for mega expensive items such as a car, a Rolex Watch, or a Chanel Quilted Flap or Hermes Birkin. Investments also help minimize the effort you have to exert by making your money work for you. Investments I know are Mutual Fund, Stocks, and Forex-just choose whatever platform that you feel is perfect for you.
Photo Credits: telegraph.co.uk
Word of caution though, material pleasures could be dangerous for you especially if you are attached to it. You may end up touching your personal, emergency, daily expense, and retirement savings just for the sake of achieving your material goal so I would suggest that you set up a separate account for it. If you put everything in one account, you might think that you have already achieved your target savings and you'll snag your dream item right away, but when you start to count and check your money, it says otherwise. Between you and the item, you're the one who has the brain so be wise and stick with your principles-it will help you in the future. If you don't hit your target savings this year, there's always the next one!
Oh, and one more thing: BE DETACHED FROM YOUR DREAM ITEM! This will prevent you from making foolish decisions such as borrowing money from people and the bank, paying installment for the item, and selling your house just to get it!
Hope you liked this post! Please feel free to share more wise words regarding finance on the comment section. I hope you all achieve your goals this year! :D
**Got a burning question about makeups, skin care products, beauty, dieting, and health tips, relationships, and whatever? Just send them to email@example.com or shoot 'em up at The Beauty Junkee's FB Fan Page via the MESSAGE button and I'll get back to you as soon as possible. (Please, do not send me Math- related queries. :D)
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