That Thing called 'Saving'

We have been conducting a survey mostly for young professionals ages between 20-29, a whooping 93% believe that they don't have enough savings and investments which is really not a shock. But even with this high percentage of lack of savings, people don't seem to care at all which is quite alarming. 

Most people can only think of "SAVING" if there is extra cash which is unlikely to happen since we always seem to have something to spend on. And we seem to fall short on the description of saving, people say I'm 'saving' --- to buy a new phone, to go to Sagada, to treat myself on my birthday, etc. That's not saving, that's planned spending! 

Though it's a good thing not spending on impulse, but it defeats the purpose of the true value of saving. Our financial goal should not only be limited to short term goals, we must focus more on our long term goals - retirement fund, kid's education, emergency fund, etc. 

 Here are simple ways on how you can start saving:

1. Pay Yourself First 

Once you received your income have the discipline to set aside a portion of it for savings before you pay your bills, buy groceries, watch movies, etc. Before you pay SM, VECO, Globe, the first bill to pay should be yourself. It won't be as easy as it sounds, but just try it and eventually it will become a habit. 

For beginners, you can start off with The Money Jay System.

2. Increase Cash Flow

From the survey that we have conducted, the no.1 reason why people cannot start saving because there is no money left to save. Find ways where you can make extra money, it can be something you like to do - baking, cooking, online selling, etc. there are a lot of opportunities now in the internet. Or you can do a part-time job or be a freelancer. 

If you are looking for a part-time job as a financial adviser, click this link. It's a great opportunity to learn how to manage your finances at the same time you can earn extra. You can learn and earn at the same time.

3. Manage your Expenses

Learn how to budget your expenses, cut unnecessary spending as much as possible and you'll be surprise how a little amount can be make a difference in your financial situation. 

For example, if you can ride a jeepney instead of a taxi everyday going to work then do it. Let's say you can save P100/day for taking a jeepney so P100 x 30 days = that's P3,000 a month. You do the math!

Even cutting-off drinking Coke can every meal, let's say you save P50 each day that's P1,500 (P50.00 x 30days) each month and P18,000.00 a year.

4. Invest in Financial Education

Saving is not just setting aside money, it's a habit. No course is offered in school to teach you how to properly manage your income, I am an accountant by profession and we have a lot of finance courses but nothing about personal finance. One of our mentor, Rex Mendoza, the former CEO of PhilAm Life said "For accounting and finance graduates, you study to learn how to manage other people/company's financial statement, have you check your personal financial statement?"

If you are financially literate, you will know that there are a lot of ways to save - the right way and the wrong way. Let's use our previous example by saving P50 per day by cutting off Coke in your daily expense,  you will be able to save P18,000 per year and within 5 years time that's P90,000! 

But if you are financially educated and you know where to grow your money at 10% per year, that would P109,892 in 5 years.

And if you are planning for a long-term saving, cutting off P50 per day in 10 years, that's P396,765. It's not really about how much money you earn, it's how much you keep consistently.

Financial literacy doesn't happen overnight, it is a process that would help us achieve financial freedom. There are a lot of books, online articles, and magazines that you can read nowadays; and there are financial seminars being offered around the country too. If you really want to start growing your finances, I highly suggest that you invest in knowledge first.

If you want to learn more, answer this FREE SURVEY to assess your financial situation today.