Disclaimer: My strategies are adjusted and fitted for my lifestyle and needs. What works for me will most certainly not work for you. The methods I use build the foundation to a better financial life. This is not financial advice. These are my views and opinions on building towards financial independence and my perception of personal finance.

Growing up I have always been exposed to finances and money. In my family, money has never been a huge issue, which is a huge privilege. However, we always lived like money was scarce. Recently, my dad joked around with me saying “Do you remember ever going on big vacations every year when you were little? You shouldn’t cause we never went on any!” I couldn’t stop laughing after he said that because even though we didn’t go on big vacations every year, we were more than ok without it. As I got older and became interested in personal finance, my dad was always open to talking about money and getting started. My parents play a huge role in my views on personal finance and I thank them for their knowledge, kindness and support. Without them I wouldn’t be who I am today. My parents imprinted this basic foundation of money to me and my sister at a young age: ”When you make money, save it.”  Or what my mom would summarize in Tagalog (one of the main languages in the Philippines):

“Mag-ipon ng pera” or in short “Mag-ipon”

Which means, Save Money. Whenever she’d say “Mag-ipon”, it was already understood that she was talking about money. Even to this day, my mom would always tell us these words. I never truly understood the meaning of saving money until the middle of college.

Automatically, I was hooked.

I realized I barely saved what I had made from photography and slowly formed this habit of tracking my spending. Eventually, the spreadsheet was filled with all my expenses and income. I started to become cautious about what I was spending my money on. Eventually after a full year’s worth of tracking my spending, I saved money! To this day, I still track my expenses and have added goals along the way. Developing the habit of tracking your spending will help pave the way to giving you more control of the money you earn. You can choose to save it, invest it, buy that one item you have been dreaming about. The point is, you are in control of your money. When you are in the position to save money and spend less than what you make, you are able to choose out of want rather than need. It is never too late to get your money right because it will open more doors as time goes on.

When getting started in tracking your expenses, it is important to know two key elements of tracking your finances:

I want to touch on expenses first because expenses are always our main issue as consumers. We all have expenses in the form of groceries, phone, streaming services, entertainment, taxes, etc., the list goes on and on. There are expenses we can’t get away from (fixed expenses) and there are expenses we can get away from (variable expenses).

Fixed Expenses:

• Rent/Mortgage
• Insurances (life, health, car, renters, etc.)
• Property Taxes
• Loans (student loans, car loans)

In our society, these are expenses that we will have to pay at some point in time. It is important to know that these fixed expenses may have the same fixed dollar amount every month, but they can vary and does not always have to be high.

Rent/Mortgage – Housing is one of the biggest expenses for the average everyday American like you and me. There are so many factors that play into how much your rent/mortgage could be. Always do your due diligence before renting/purchasing an apartment/house, especially if you choose to live on your own.

Insurances – All types of insurances will end up in our expense list one day. Health, car, renters, homeowners, flood, life, all types of insurances that are out there. However, we have the power to choose the best and lowest plans out there. 

Property Taxes (for property owners) – Well..can’t avoid them!! However, if you’re flexible on where you want to live, many states have low property taxes. 

Loans – Student and car loans, if you can avoid them, phew! You are blessed. However, for a majority of us (including me), we have tacked on the burden of borrowing student loans. Tackling student loan debt can be a full on topic in itself, but for now, if you can pay more than the minimum, by all means, do so and get it out of there! And for that car loan, if you’re comfortable with it, who am I to tell you!

Variable Expenses:

• Credit Card Debt
• Eating Out
• Entertainment (concerts, sporting events, movies)
• Groceries
• Phone/Cable/Streaming Services
• Shopping
• Utilities (Electric, Gas, Water/Sewage) – Growing up in a Filipino household, wasting electricity was a huge NO-NO!!! *At your own risk: try leaving the lights on in the day time around your Lola (Filipino word for grandmother).

For variable expenses, with the exception of utilities and groceries, ask yourself, do I really need this or do I want this? Not every want is a need. Separate the needs and the wants. Keep in mind a lot of these expenses are luxuries but we can’t deprive ourselves. It is up to you to decide what is worth spending on without compromising your finances.

Credit Cards are dangerous and useful at the same time. It is very tempting and easy to keep swiping (or inserting chip) with a credit card. However, credit card debt can pile up easily and put you down a huge hole. When used correctly, credit cards are a tool to smart traveling via rewards (huge topic, I love maximizing credit cards and will talk about this in the future!). If you happen to fall into credit card debt: IF YOU CAN, PAY IT OFF AS QUICKLY AS POSSIBLE.

Income – For a majority of us, we work for an employer and receive a bi-weekly paycheck. This is our W-2 income which we rely on to pay the bills. It is also important to be aware that not all W-2 jobs don’t pay a lot of money. However, there are other ways to produce income if you can. For example, I used to run a photography business where I made money taking photographs for weddings and events. There are other blogs out there where people are making money writing about the same exact things in their own words! Bottom line, there is more out there than your W-2 income, it can be something you’re passionate about, something you like doing or just something just to add extra dollars in your pocket.

Once you’ve gotten a better understanding of your expenses and income, you can begin the process of saving! Build a budget, track and cut out excess spending, do everything you need to save and build what we call a cash reserve. It’s important for us to have a cash reserve for any emergencies or sudden loss of income. I believe in having a safety net for if times get rough. Building that cash reserve all depends on your level of spending each month. If you plan on spending $3,000/month total, base your cash reserve off that. We all have different spending levels and yours will not be the same as mine. I choose to keep a cash reserve of 6 months in a savings account and I also am building a 6 month real estate cash reserve. Remember, this money is not for investing, this reserve is for emergencies. Building cash reserves takes time, especially if you are in debt. In my opinion, I’ve always tackled debt first because of job security. If you are in the position to tackle debt first, tackle it, knock it out so you can start saving. If you need that cash cushion before anything else, create that cushion. If you can do half save, half spend, why not! Remember, this is personal finance, it’s PERSONAL!

I hope reading this has given you an introduction on expenses/income and the importance of building the habit of tracking your spending. Pick up a pen and paper or open up an excel spreadsheet, anything to get started. Like I said earlier, it’s never too late to get your money right!

In light of recent events, please remember that all lives can’t matter until black lives matter. #GeorgeFloyd