How do you manage your salary?
- Spend some
- Spend all
- Spend before you receive it?
Change your money habits.
Develop the saving habit rather than the spending habit. Reverse the cash flow equation to make your savings program work: Income-Savings=Expenses. Pay yourself first and put in your savings program. Be prepare for major lifestyle changes.
Poverty is not the lack of money but mismanaged money. Have you heard of lottery winners who even become poorer than before the windfall. A PhP 14 million lotto winner became bankrupt and even incurred huge debts just three months after winning the lotto.
People have different saving motives:
- Pure life cycle motive
- Investment motive
- Down payment motive - longer-lived
- Precautionary motive - future uncertainties
- Improvement motive
- Independence motive
- Bequest motive
- Hoarding motive
To succeed with whatever savings motive/plan you have, you need to
- Have a specific purpose
- Have a specific target amount
- Set a deadline by which you have saved the target amount.
- A retirement nest of PhP 1 million in 10 years
- PhP10,000 each month for mutual fund investing
- PhP1 million invest ment in 5 years for child’s education
- PhP 2 million in 5 years for house renovation
Use wealth calculator
Some money saving tips
- Don’t put all your spending money in an ATM account
- Start young. Make it a habit.
- Give to God’s works first. Tithing is . . . .
- Pay yourself first (for your saving target). At the minimum 10% of your income.
- Participate in forced savings plan initiated by your company.
- Conserve energy: water, electricity, gas, gasoline
- Consider cheaper alternatives
- Avoid buying on credit
- Keep your cellphone habits in check
- Clean appliances regularly. It will last longer. I’ve proven it.
- Pay bills on time.
- Take advantage of financial freebies
- Think of fashion as a matter of look, not price.