5 Practical (and Realistic) Ways to Handle Your Money

How you spend, manage and invest your money will have a huge impact on your life. Learning to be financially savvy takes a while, but the basics never change and are fairly simple. Here’s how to get started.

1. Maintain the same lifestyle even when your salary increases
Once the prospect of salary increase comes to picture, some of the first things we think about are “I need a new phone” or “I can now go out more often.” However, the trick is to maintain the current lifestyle you have without depriving yourself. How do you do that? It’s like a matter of choosing one reward at a time—you reward yourself with a Korean trip for the holidays but that means foregoing a new iPhone.

2. Avoid thinking saving more
Instead of saving more, focus on saving—period. Financial articles and books often say to set aside 20 percent of your salary to your saving, but for many of us, that’s just unrealistic especially if you have bills to pay and a family to support, not to mention emergencies and unexpected expenses. Try saving five to 10 dollars a day or any amount you’d barely notice. The purpose is to be consistent and develop a habit of putting away money no matter how little.

3. Pretend you earn less than you actually do
Have you ever had rich friends who are super tight with their expenses? Hilarious as it may be, it is how rich people stay rich. Although you don’t have to split with your friends every time you have fries, it would be financially smart to always go Dutch.

4. Stop spending just because you are bored
Have you ever have moments with friends where you just had a good dinner and feel very full, but you decide to get some expensive coffee just so you have a place to chill out? Do you often catch yourself going to Walmart or Target because you have nothing to do, so you might as well go look for a snack or a new makeup to buy? Keep your wits at all times. Ask yourself: Do you really need to go out and buy something or you’re just bored? Are you really hungry or you just want to try that new snack because you have nothing else to do?

5. Focus on big purchases instead of several tiny ones
This may sound counter-intuitive to the previous tips, but think about it: a much-anticipated-purchase (such as branded shoes or a bag) is much more satisfying than weekly small purchases of cheap clothing items. Allowing yourself to spend big once in a while won’t make you feel deprived, while also not breaking the bank.

Managing your money is not just about how much you have in your savings account; it is more about how you make your income work for you to live comfortably with enough money to spend and save.