Why it's important to plan what to do with your money?

Let's get straight to the point. If you don't have any plans what to do with your money, other people will do their best to get it from you. And the bad news is these people I'm talking about are professionals in doing this. After all, they aren't in the position they are now if they weren't that good.

Let me ask you, how many times have you experienced coming out from work and passing by your favorite mall. You see this 50% off sale in one of your favorite shops.

You tell yourself you'll just check what's inside and see if there's any worth buying. You see something you like and you buy it while you rationalize that it's discounted anyways so it's a wise buy. The 1,000 pesos that you have been trying to save for the past week was gone in an instant.

I too was a victim of these professional. They know our weakness as consumers. They just place a big discount placard in front of their shop so they can lure us to spend our money that we have been saving.

The only way to avoid these temptations is if you already have planned out before hand what to do with your money. The basic formula of INCOME minus SAVINGS equals EXPENSES still comes very handy. Setting aside your savings first won't make you feel guilty in spending to buy your wants. However, take note that these savings is better to be out of your reach so as not to be tempted to use this money. If you can setup an auto debit from your bank account to invest a portion of your money to a mutual fund or something similar then that would be great. On the other hand, if you're disciplined enough to do the investing part manually it's also fine. The key here is to force yourself to convert the savings into assets as quickly as possible so you will have not option to spend it.

This is one of my mindset when it comes to budgeting my money and making a plan on how to use it properly. As a consumer it's easy to spend money for the very reason that there are a lot of tempting products out there. Latest gadgets, latest trend in fashion, newly opened restaurant and things like that will always be there. That's why I always think I have to make a plan how I should spend my money or else I will find myself spending all my hard earned money to things I don't really need or things that I can live without.

So plan carefully what to do with your money so you wouldn't feel bad or guilty later on when you realized where your money went. Make it a point to save and invest a portion of your income so you wouldn't be tempted to spend it especially if your savings is still accessible. Always remember if you don't plan for your money, somebody else is planning to get it from you.