I know that it isn’t easy to save, so how do you make it work? I would like to share with you these ways to help you keep what you earn and make keep it longer:
1. Goal setting provides direction that will show you that you’re making progress. Break it down into the following financial milestones, in this order:
• 6 months worth of emergency savings enough to keep you comfortable in the event you’re unable to work.
• Health and Life Insurance. You are your own greatest asset, so it is only right for you to protect yourself first.
• Medium-to-long term savings. This is for retirement and pension.
2. Understand compound interest: your money builds interest on the interest of the years that came before it. Every peso you set aside will work very hard, even while you sleep, to grow and give you a good return.
Picture this: a soda can costs an average of P25. That’s a small amount of money, you might think—BUT you may end up buying 4 times a week, or 16 times a month. Now take that amount (P400 a month) and imagine paying that monthly to the same fund for the next 20 years, you would end up with P274,920!
3. Set aside savings FIRST
The crucial part: make savings a priority expense on your budget. This means that once you get your salary you immediately set aside the money as soon as you get it. Make this your rule: at least 10-20% of your income goes into savings. You can do more if you like.
If you can’t cut down your expenses to help it, then you will need to find ways to raise your income. You may take sales as a sideline, or market your skills on freelance sites, or open up an SME (Small-to-medium enterprise).