"Life's experiences are intended to make you eventually face yourself. Face reality!" -- Harold Sherman
When Kulas received his first paycheck after college, he felt so proud of himself. Finally, he could solve all his family money problems; he could buy anything he had wanted. Immediately, Kulas went to SM Mall together with his family to shop and eat. He spent here and there and before he knew it, he had no more money midway to the next payday. He wondered where did all that money go, but he couldn't trace anymore. So he had to ask for fare and food allowance from his parents again just like his college days.
Sounds familiar? How about this?
Pedro was a real estate agent who earned by commission. One day, luck stroke him and he sold two condominium units in one day. When he received his hefty 5-digit commission, all the things that he had wanted to buy and the places that he had wanted to go flashed before his very eyes. Money was no longer a problem! Soon there after, Pedro gathered his wife and children and off they went to shop and dine. The next day they went to Boracay. (Money was no longer a problem!) He felt that he had so much money that he just spent and spent. But one day his ATM receipt showed P2000 balance. He began to wonder, where did all that money go? He shrugged his shoulder and went his way to sell more real estate.
Pedro and Kulas made a lot of mistakes in handling their money. One clear sign that they somehow mismanage their money is when they ask the question, "Where did all that money go?"
Do step# 1. Do step# 2. Then compare the sum of your allocated funds to your net income, net commission or take home pay. This is a reality check -- can you really afford your current lifestyle? Oh, yes! Your list from step# 1 and step# 2 represents you lifestyle today.
If your income is lesser than your current lifestyle, say you earn only 15K/month and you normally spend around 20k/month based on your allocation, then you have three options:
(1) Scale down your lifestyle
(2) Look for additional income, pronto
(3) Scale down your lifestyle temporarily and look for additional income
Pause for a moment. Take a hard look at the difference between your net income and your lifestyle today. If it's negative then you need to act quickly before you'll get buried in debt. My suggestion is, go for option (3).