When we were all younger we received an allowance from our parents. When we got older, we got this thing called a job that seems to have replaced our parents when it comes to how we get our money. It’s a pretty sweet deal if you think about it. You have to do some chores for your employer and you got paid. Because we now get our money from jobs and previously from our parents, we somehow expect our employers to act like our parents.
Here are some examples in a form of some questions.
- Have you ever felt like you're not getting ahead? It's like your pay is not enough to take care of your expenses?
- Do you always feel the need to jump to a new company for greener pasteurs?
- Have you ever felt like the management does not care about you because of how low they pay you?
Somehow we still see companies like our parents. We please our bosses and they take care of us. They grant us favors as they see us working hard. Unfortunately that’s not the case. Companies, even call center companies are businesses. The primary business of a call center is to make money. A call center pays it’s agents a specific amount and bills their clients a higher amount. It is in their interest to pay you within a range from as low as an agent is willing to accept to as high as they can (within the boundaries of their budget) to keep the agent happy. It might sound wicked but that’s how it goes and it’s not all that bad. Now that you know the rules, your goal is to make the rules work for you and not against you.
Your financial well being is not their concern and nor should you depend your financial future on anyone but yourself.
I’m not about to preach how to gain financial freedom. I’m not going to ask you to save and invest millons of pesos because it’s not going to work out doing so in a call center. Unless you see call center life as your calling for ever and ever I don’t recommend staying in a call center for very long. The objective has always been to build up resources and use the job as a stepping stone for bigger things as I have seen many people do.
List your daily expenses
Define your expenses by listing down everything you spend on a daily basis for a month. Budgets are complicated, confusing and I’ll stop there those are the two reasons why I have a hard time and often don’t follow a budget. It’s just too complicated to start. Here’s an alternate, just write a list of expenses for two reasons. Reason one, to familiarize yourself with exactly how much you spend. Reason two, the record enables you to make wiser spending decisions in the future because you know where you over spend and also where you under spend.
Apply the allowance method
After one week define your recurring daily expenses and apply the allowance method. What the hell is the allowance method? I noticed that I had the most money in my life back when I was in college. I got to eat where I wanted to eat, I got to buy the toys that I’d like, I’d get to treat my friends every now and then and I’d get to buy gifts for my crush. The thing there is I didn’t have as money then as I did now and despite that I was able to achieve a reasonable amount of happiness with a very limited amount of income.
Here’s how I do it:
- I spend Php 100 on my transportation to work.
- I spend Php 50 every time I eat out at work.
- I give myself an allowance of Php 250 per day.
- I have an extra Php 100 per day every day.
- I am free to decide what I do with the Php 100.
- If I don't spend the extra Php 100.
- Every week I have an extra budget of Php 700.
- Every payout I have an extra budget of Php 1,400.
- Every month I have an extra budget of Php 3,000.
- Every year that's about Php 36,000.
- I don't expect you to save it. I expect you to use it wisely and play when you feel like it. Money is like sex. You have to be responsible, but you also need to enjoy it.
- I recommend that you do a computation of your own. How much do you comfortably spend on transportation? How much do you comfortably spend on food?
- Add about 30% or Php 100 whichever is higher.
- Separate your allowance when you get it on your pay day and have the teller break your money down in Php 50 bills then give yourself a daily allowance.
- Keep the extra money that you don't spend and build it up or spend it on what makes you happy.
This method enables you to add some freedom and at the same time have some extra and teach you that you don’t need to spend all your money by payday.
Set up an emergency fund.
An emergency fund is simply some money that you set aside for important events. Most financial planners tell you that it should be worth six months or one year of your income. If you follow the textbook definition you’ll look at it and say you’re screwed. Fuck that. I propose an alternate. Going back to your allowance method I recommend doing a gradual approach to doing it. Here’s how. Your emergency fund defines how long you can live without an income. If you look back and apply the allowance method, you will notice that you are not using your full income to survive. You can decide to build up your emergency fund on a scale that suits you. Make it your goal to build few targets first and grow it as you form habits and build confidence. It is important that you don’t increase the money you are putting away until you are confident that you are not starving yourself. Our goal is to build a small amount of extra money and form good money habits so that you will eventually grow that money into a significant amount so you can use it for what’s important to you in the future. Let’s go to the next step so I can explain better.
I’m out of time but I have a lot more to share. I’ll post part 2 tomorrow. Please send me a message for questions or leave a comment below. Praying for your success.