Save while there’s still time

              “’Pag may ipon na ‘ko” is one of the most common things I hear from friends when there is something they wait to purchase or when they think of spending on something big, like their dream debut or wedding. Strange enough, I never had this thought because of the way I was raised.

I think it’s safe to say that ever since I was in kindergarten, I was already money-wise. My parents made me realized that at an early age, we should count every peso that we are spending. I used to go to the grocery around thrice a week to splurge my 20 pesos allowance on a can of Green Giant corn.

For those of you who go grocery shopping now, you may be thinking that it’s quite impossible to have Green Giant cost about only 20 pesos, but hey—that’s inflation for you! It was a wise investment for me given that it would make my tummy happy when I get home.

I never bought anything with my money that would automatically be counted as “stock” items, rather, I bought things that would either make me happy while using it (usually some stationary), or full. All the things I spend on were practical, only a few were legitimate wants that were, in the long run, a waste of money.

In college, most professors would probably warned us that there is no money in teaching. I have embraced it wholeheartedly, but with my plans of supporting my parents when the time comes, I thought that it wouldn’t be so wise to just stay in my comfort zone and wait until I get to marry a big business tycoon at 30.

I decided to get into financial literacy by reading related books and materials about it. I came across my dad’s friend at work and he became my favorite financial literacy author. I immersed myself in the teachings from two of Mr. Randell Tiongson’s books and they made me wiser in my finances.

Let me share with you the lessons I have learned from my parents and from Mr. Tiongson. Hopefully, these tidbits would help you out!

There’s a difference between wants and needs.

No, you don’t need the new iPhone 7 because your iPhone 5S is still working like a peach and still looks as good as new. No, you don’t need the new Yeezy’s because you still have your good ol’ pair of Stan Smith’s that is very timeless.

More often than not, consumers of today’s market easily fall for fads that pass in two to six months or so. “Upgrades” in so many ways are not at all bad but come to think of it—a single phone makes you message and call just the same as the new one. So, why bother to get another one that would cost you another  50,000 on top of the several bills you are obliged to pay per month?

One way to handle your finances is to differentiate wants from needs.

It is vital that one spends on needs such as consumables that would be used at home. This includes tissue paper, bottled water, food, etc. This is the kind of cost that is expected, thus, we get to prepare for it.

Wants, however, are splurges; meaning, they meant to be spent on ONCE IN A WHILE. This includes gadgets, jewelry, and clothes. Once you spend more on wants  compensating on your needs, that is where the problem comes in.

It is always better to use cash.

This one I got from my dad. Usually, when one prefers to use a credit card in paying for purchases, there’s this concept of “unlimited money” that forms.

Consumers often think of “I can afford to buy this now because anyways, at the end of the month, I will get my salary that would be enough in paying these”. And in retrospect, it is usually the wants that gets paid, not the needs.

In effect, the things that are needed aren’t acquired, resulting to the compromise of amount of money that could have been used for things of function. On the contrary, when you have cash in your wallet, you have a gauge of how much you are capable of spending and how much you are willing to spend.

Spend within your means.

This goes out especially to those who are working and are earning on their own. If your salary range is from Php10,000-Php20,000, do not spend around Php45,000 a month especially when it’s on a new branded bag or clothes. This is one of the bad spending habits that Filipinos have.

Because of the culture of having family back you up until God knows when, people continuously spend more than what they earn. Asking questions such as “Will I earn this back as soon as possible in case of emergency occurrences that would require spending?” “Does the price of this gadget cost more than what I make? If so, will I be able to pay it completely in installment and not leave me with any debt?”

 Save while you have time.

Probably this is the most important lesson I can share with all of you that I got both from my parents and Mr. Tiongson. We don’t save for a wedding when the wedding is coming in a few months’ time. We don’t save up for a trip when the trip is already tomorrow.

It’s the same thing with saving money for the future and for emergencies. You save it even though there’s still no need for it. I remember, in Mr. Tiongson’s Money Manifesto, he realized that he needed an emergency fund when they had an emergency in the family.

Having a savings account that you obliged yourself to deposit in and not withdraw from is very helpful—it gives you a goal in saving, whether it be a monthly or a yearly goal. Back up accounts such as an emergency account and a strictly for saving account would frame out your finances in such a way that it would weed out your impulsion because you set a discipline on your own to deposit and save up a certain amount of money for future use.

            Hopefully, these items would be of help in one way or another. With 2017 coming in soon, there’s a lot of expenses to be tracked and there’s a number of  saving techniques to be done.

          For more of financial topics, you may look at an old entry I put up about money jars on my old blog (https://akosimorena.wordpress.com/2015/01/06/i-tried-doing-the-52-week-challenge-and-miserably-failed/) or wait for the follow-up article on financial literacy. If you have any questions about handling finances that I can answer for the next entry, feel free to comment below!

Lazada Philippines

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