Big Spender vs Big Saver

As paycheck day nearly come, I guess it is good timing to write something related with organizing money. Do you have financial plan? If not, well you better get started. And the very least you can do to start making financial plan is organizing your cash flow.


I used to neglect this financial plan thingy as I didn't see the importance of it. Before married, I lived with my parents and they supported me almost in every expenses, such as accommodation, meals, transports and house maintenance. So I barely paid my daily expenses. Hence, the money I earned from working is fully used to pay my lifestyle or shopping expenses.


It was until my husband and I plan to get married, I started to think more about why we need financial plan. As you know, wedding expenses, honeymoon expenses and expenses after marriage are required large amount of money. And even though I had big savings, the number would be decreasing fast if we didn't control the cash flow and started to make a good financial plan.


Therefore I took a seminar and a workshop related to financial plan, organized by one of the famous independent financial planner in Jakarta, QM Financial Plan. I learned about the importance of having financial plan, how to make one and also the various investment options to achieve the financial plan.
Here I am, sharing to you readers the knowledge I got, for free :))


Since the whole cycle of creating financial plan is complicated, I will start it with the very simple and important steps, which is managing your cash flow. Start this with answering this questions, when you receive your salary, what is the first thing you do with them? Spending it? Pay your credit card bills? Most friends that I know, already have plan what they are going to buy after receiving their salary. Some of them want to buy fashion items, another want to spend it for holiday and others just spend it for clubbing or dine out on weekends. But do you realize, after all the big spending, how much money left in your bank account for the rest of the month? Some people could run out of money just in the middle of the month and they struggle to live in the rest of the month. Don't laugh, it is true story. And the big question is how could you finance your future if you even cannot save your money until the end of month?


That is why it is important to manage your cash flow properly. First thing you need to do is making a monthly budget. How do you make a budget? This is what my husband and I do for our monthly budget in Copenhagen:

1. Listing down all the monthly fixed payment, such as: apartment rental fee, water and heater charges, train monthly pass, fixed phone bill, internet fee and church collection.
2. Listing down the possibility of payment that amount is still uncertain due to depending on consumption, such as: electricity, groceries and household expenses.  
3. After the two important expenses, let's see do you still have any leftover money? If yes, determine how much you are willing to save. You should save at least 10 to 30% of your total monthly income.
4. The money left, you could budget it for lifestyle or hobbies.

You should note that making a budget is easy but implementing one is different case. My husband and I used to have this kind of budget when we were in Jakarta. However we don't really stick to the plan and sometimes we were kind of cheating with our emergency fund :-D It might be because there is no urgency on it, we have this huge emergency fund and we still live with my parents in law who supports meals and house maintenance expenses.

When we moved to Copenhagen, it is completely different story, we stand on our own feet now, have to pay the rental, groceries and house maintenance on our own. With only single income, living in an expensive country like Denmark, is truly not easy. That is why we really should committed to the budget we created.

Since this is just our first month here, we decided to keep track of the uncertain expenses (see list no. 2), by taking notes of our spending every day for each category of expenses. This is absolutely an extra job, but it helps us to check whether our budget is achievable and making sense. Hence, we can decided whether we have to revise the budget or not.

Having this budget, it really helps both of us to stay away from being a big spender. Now every time we go to supermarket for weekly grocery shopping, we carefully choose the one we need instead of the one we want. It also keeps us from living the lifestyle we don't deserve, like dining out in expensive restaurant or buying gadgets we don't really need. Well, shortly, having the budget makes us want to be a big saver :)

So, the decision now is in your hands, do you want to be a big spender or big saver? Just remember, 

saving your money now, helps you to save your future!

Cheers,

Indispensable Lady

PS: Just simple tips from me, be as detail as you can when determining type of expenses in your budget. It helps you to monitor your cash flow.