We just recently celebrated our Independence Day and I hope that you enjoyed the long weekend. Some of my friends went out of town and some just did staycation. It is obvious that in everything that we do, planning is important, we have to set goals to everything what we do and we want to achieve in the future. Some people plan their vacations 3 months before, or 6 months before or more than 12 months before the set date but the problem is: Are they planning for their future financial needs as well? As the bible says at Proverbs 29:18 Where there is no vision, the people perish.. I’m quite surprised that some of my clients and friends that I talked to have no plans at all in the future. They can’t articulate it. Even if they are part of the top management of a corporation that they set goals for their employers for the next 3 years to 10 years but they don’t have their own financial goals. This is the reason that after 10 years or so of working hard most of us have not started saving or even investing, our income just goes to spending and payment to loans.
As a Financial Planner, my job is to help my clients to set their goals for them to start having Financial Plan for them to create funds for their future expenses. With these, I would like to share some tips to start to achieve Financial Independence and I learn these from successful people that I know and I want you to practice this as well. If you have suggestions, you can also comment below.
- Be debt-free. We have to avoid the unnecessary and excessive debt. Use your credit cards responsibly. Personally, I discourage using credit cards. If you can’t afford it to pay in cash, you can’t afford it. Don’t fall into high-interest loans. Life after debt gives you a positive perspective to start and grow your finances.
- If you want to buy something, practice delayed gratification. A lot of us have an attitude of I-WANT-IT-NOW. Before you buy something, think first if it’s needs or wants. At the end of the day, will you be using that item? Or just merely impulse buying.
- Live within your means. Ideally, live 80% on your income and 20% should go to savings and investment. If the income is not enough, be creative and start entrepreneurship. Nowadays, it’s not enough to rely to one source of income. I have friends who started doing Financial Planning business and it can be done part-time. While earning from their job, they also earn from helping people to have Financial Plan.
- Don’t compare yourself to others. It’s either you will feel better or you will feel bitter. We have different backgrounds, some may be earning big now but we have to consider that person has been working for quite some time already and gained his skills that’s why he earns bigger than you. Instead, be inspired to the success of other people. Be free of jealousy and insecurities for us to gain financial independence for yourself and your loved ones.
- Use the formula of Income-Savings=Expenses than Income-Expenses=Savings. The latter will only leave you without savings because you will prioritize expenses. Set goals that everytime you earn set aside right away a portion of your income to savings and investment no matter what happen until saving will be your habit.
- If you are an employee, set goals to have savings equivalent to the six months of your income and if you are an entrepreneur have at least 1 year. Why is this important? So that just in case you will have emergency expenses like you lose your job, you get sick, or the business is not doing well, you have a fund that can cover you rather than you go to a loan shark that will give you high-interest rates. After this you can now look for financial instrument that can help your money grow, there are so many investment plans that you can look in the market just study it if it will fit your personality as investor.
- Insure yourself properly. We know that life is full of risks like death, sickness, and retirement. If risks happen, we are insuring that our dependents will be taken care of. Their lifestyle will not be downgraded, even if you will you not be around in the future.
- Buy non-life insurance coverage for your home and car. Just in case, you will not be spending too much if accidents happen.
- Sharpen the saw. Always take time to learn about personal finance. Read books, blogs, attend seminars, follow experts, how to learn more about to achieve financial independence. It’s not enough just to know but also do.
- Always ask guidance from the Lord to give you wisdom in handling your finances. We are his stewards and we have to be responsible to the blessing we received from him. As the bible says at Proverbs 9:10 – “The fear of the LORD is the beginning of wisdom: and the knowledge of the holy is understanding.”
Set your goals, know what do you want to your future financial goals. Use BeSMART. Your goals should begin with end of mind, it should be specific, measurable, attainable, realistic and time-bound. If you know the why, you will be guided why you do things that are not common to other Filipinos. I know that what I do is counter-culture because a lot of Filipinos will just spend their hard-earned money that’s why when retirement comes at age 60 or 65 there are about 63% will be broke because of lack of Financial goals and Financial Planning.
I hope that you don’t just learn something by reading my blog but also take action to the things that you have learned. Thank you for reading my blog, I look forward that you read my future blogs.
I wish you more success and happiness in life. God bless you!
Let’s all achieve Financial Independence for better Philippines!
If you want to learn more about Financial Planning, you can invite me to give Financial Literacy Forum.
Archie M. Yuki
Associate Unit Manager/ Financial Planner
Mobile number: 0917-5769607
Email address: email@example.com