There are people that after 10 years of working don’t have any savings, worst is, even upon reaching retirement age don’t have any savings nor investments. Why does it happen? It is because they never prioritize it. Most of the time they focus on spending. They cannot control their emotion when it comes to spending. Everytime there’s sale in the mall,they will simply spend it all and to the point that they use their credit cards and pay it the minimum every month. Some even justify that it’s a good buy even if the item is not needed.
There are many ways how to save and live within your means. These are just my suggestions, if you have other suggestions, you may comment below.
- Change your mindset that through saving you can start achieving Financial Independence.
- Set aside 20% of your income that will go to your savings and investments. Live only at 80% of your income. Use the formula Income minus Savings equals Expenses not Income minus Expenses equals Savings.
- Write down your daily expenses in a small notebook and you can analyse and remove unnecessary expenses.
- Set percentages what amount will go to groceries, transportation, gas, tuition fees, etc. Once decided follow that budget strictly.
- If you have unsettled debt, prioritize the one that gives higher interest. As much as possible, get out of debt.
- Cut your credit cards. Personally, I don’t recommend using credit cards particularly to the people who don’t know how to use it properly. Never pay it on minimum otherwise you will pay double or triple the price of the item you buy.
- If you want to buy something,pay it in cash. You can get discount also. If you can’t afford to pay it in cash, you can’t afford it. Practice delayed gratification, not instant gratification.
- Never go to a vacation that is unplanned. Otherwise, you will go broke after that vacation.
- Don’t buy things to impress other people or just to be “ïn”. Assess if it is want or need.
- Minimize the expenses and increase your income like acquiring new set of skills, learning new things or doing entrepreneurship.
Once you created a habit of saving, it will be always part of your life. Evertime you earn, you will always save a portion of your income and even if it is small or big. After you have accumulated enough savings or at least 3 months to 6 months of your salary, you can start investing . It’s not enough to save but we have to learn how to invest and make money work for us. Even if we work hard, our money can work harder for us. What I can suggest is put your money to an investment vehicle that can beat the inflation in the long-run.
Start now to save and reap the benefits in the future.
Thank you for reading my blog. I hope that you learn something. I look forward that you read my future blogs.
From Spender to Saver to Investor for better Philippines. God bless Philippines!
To learn more about Financial Planning.
You may reach me at 0923-4941362
Archie M. Yuki
Associate Unit Manager
The Insular Life Assurance Ltd., Co.