There was a story about a company driver who earned his salary every Saturday. But every Wednesday afternoon he got his salary in advance and it had been a habit. His boss wanted to know if what would happen if he gave an advance salary on Wednesday and he would still give him a complete salary on Saturday. The boss did it, the driver was really happy because as if he just got a bonus because he got his salary in advance and and he would receive the full salary still on Saturday. After one week, Wednesday came and the boss was waiting if his driver would still request an advance of his salary and luckily the driver did not. The boss was happy because the driver did not need get his salary in advance but came Thursday afternoon the driver requested an advance of his salary again. He was back again from his old behaviour that he cannot manage his finances even though he had a surplus.
If we don’t have a discipline in handling our finances, making more will not help. The Bible says at Luke 16:10, “If you are faithful in little things,you will be honest in big things.But if you are dishonest in little things, you won’t be honest in greater responsibilities”. It is easier said and done. We always hear that we have to save and invest but even a lot of us know it already yet we still do not do it. You can see a lot of posts in Social Media about saving and investing but less than 1% of Filipinos only invest in Philippine Stock Market. According to statistics, 63% of the Filipinos will be broke upon retirement that is why Personal Finance is important to practice.
What is a Personal Finance?
Here are my suggestions to have a good behaviour about personal finance:
1. Have specific goals. Setting goals is important so that you know your purpose. Have you noticed that a lot of us say “Bahala na si Batman” because we do not have action plans to reach our goals. Be it for your children’s education, your retirement, for your health care funding, and many more.
2. Practice delayed gratification than instant gratification. Be a far-sighted person who also thinks about the future for yourself and your family as well but not only for the now.
3. Allocate your budget every time you earn. Prioritise savings and investment before spending.
4. Avoid quick-rich schemes that offer high returns with low risks. Becoming rich requires hard work and discipline that is why investigate first before you invest so that your hard-earned money will be invested properly.
5. Increase your Financial IQ by studying,reading, watching videos, attending seminars,consulting to experts that can help you to learn. Investing in yourself can pay the best interest.
6. Act your wage. Buy things within your budget.
7. Protect yourself and your family from risks of life like sickness, illness and death by getting life insurance.
These are suggestions that can help us to manage our finances well. These suggestions are not easy to do but it is worthy if we practice it. Here is another story that I really like about choosing the right thing to do. In a clinic, one sick person consults a doctor how he can be cured. The doctor advises medicines to take and tell the patient to come back next week. The patient returns to the doctor next week and complaining that he did still feel the same, he is still sick. The doctor asked if he took all the medicines that he prescribed and the patient told all the excuses he could muster why he did not take the medicines like he forgets it, he does not like the taste, etc. He had all the reasons not to follow the advise of the doctor but not a single reason to be cured from his illness. Sadly, most of us are like this patient, even though we know how important to save, insure and invest for our financial goals, we still do not do it because of our excuses. Personal Finance is really 80% Behavioural and 20% head knowledge. It is not enough that you know it but it is how you act on the knowledge that you know . It’s really good if we will practice temporary pain for permanent gain. It is not how big or small our income is, but it is about our good attitude on personal finance.
Thank you for reading.