First and foremost I like to list down some factors (they are a huge factor) that enable me to save even I am just a little over minimum wage:
Let’s start…
#1 I live with my parents- I really don’t mind living with my parents, I think for us Filipinos this is not an issue and this is really a huge factor why I can able to save money out of my salary mainly because I don’t pay electric bill, water bill, cable and a lot of times I get free meals. I do spend some food grocery sometimes with my parents and my niece who lives with us but other than that there is nothing major expenditures I need to worry about all throughout the month. (but hopefully, I can move out and able to pay an entire house bill in the future). So if you belong to a low-income group getting help from your family will really make a difference to lighten up burden from bills payment.
#2 I bring packed lunch- This actually just saves you a little money but every penny saved will go a long way. I try to bring packed lunch most of the time and accomplishing like 3-4 packed lunch in a week is a really good accomplishment for me already.
#3 Try to lessen your burden- I actually have a mortgage worth around P4,200.00 monthly but thankfully when I was abroad I slowly improved the house and have it rented. So instead of paying the full amount of P4,200.00 I only add P1,200.00 monthly to complete the monthly mortgage of my house.
#4 Set goals- I have a lot of plan with my savings as I’ve listed down on my previous post ‘Inspire Me to Save: Evaluating my Finances’, but really why are we saving anyway. When I was younger I save just to end up buying new clothes or shoes and after that, I am back to square one, “living payday after payday”.
I really don't have the right mindset of where does my money goes to and how can this be a tool to achieve the ‘can buy anything stage’ aka financial freedom.
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Let me set a certain perspective (it does not mean this is the right way all throughout, there can be easier or another way that is more effective but this is just my own)
I’ve read a lot of articles over the internet about an emergency fund, retirement fund and honestly I really don’t understand why I need to achieve them. Now that I have a real desire to achieve the ‘can buy anything stage’, just by then I slowly realize the importance of these funds.
Let me list down below the importance of each and the order what should be achieved first, second and so on…
Emergency fund- I think they do suggest to save 3 times of your salary as an emergency fund. What do you mean by emergency, it does not mean a mall sale or new I phone will be out, an emergency fund is for emergency basically? I don’t want to spell it out but you know what I mean and I hope this doesn’t actually happen.
Personally, I don’t have an emergency fund but if I do have it I will not call it an emergency fund but a business fund in which I can use to start up a home base business.
Also, I would like to add up that if you are saving money for a business fund this is where the banks/Koop comes in. Of course, if you save a huge amount of money you wouldn’t just keep it in your wallet rather you will decide where to keep it. There are advantages when you put your money to banks but I personally like to put my money in our Local Coop, the San Jose Koop (please read here on how I apply). If you are a shareholder you can open a savings account worth P500.00 and I believe they offer a higher interest compared with the bank. It is a bonus as well that I don’t have to think of a huge maintaining balance! So whenever I wanted to start a business I can easily withdraw funds from my savings account.
Travel/Leisure Fund- I know there can’t be a time that you wanted to reward yourself so better to prepare for it and have a Travel/Leisure Fund. It doesn’t have to be a huge amount at first, small amounts will for sure go a long way. The key here is to prioritize which fund you should fill in the biggest part of your savings.
Real Business Fund- real talk here, it will surely take forever to raise a real business fund with minimum wage or even a little over minimum wage. If you got it and wanted to expand your small time business into a full-time business make sure you save your profit for the ‘real business fund’. This will require a bit bigger amount of capital so better to save for it in the future.
Investment Fund- Another fund to consider is passive income. This is where stock market comes in or if you want to acquire a property for rent that is a good idea as well. I ranked it 3rd because I think that it is really important that you already have another source of income other than your regular job before creating an investment fund as it either requires a huge amount of money or you have to invest long term for it.
Lastly…
Retirement Fund- I wouldn’t want to forget this one because this is where you can make use of the long-term savings platform that the government offers the Pag-ibig MP2. Since Pag-ibig MP2 has a 5 and 10 years maturity depending on your choice I think this is a good platform where to save your money. I know we have Social Security System (SSS) and Pag-ibig 1 in which you can collect the money after you retire but if you have a little bit of extra you can put some in Pag-ibig MP2 which has a bigger interest rate. The stock market can be your retirement fund as well as I’ve heard that if you invest in here long term the return is higher.
I know there are still a lot of platforms out there for investing long-term, just remember that the idea here is to create a retirement fund after you have created another source of income other than your regular job. You will get crazy for sure if you try to achieve this entire fund with just a minimum wage. So prioritize, make it a step by step process, every single fund I listed here are important. You just have to make a priority what will benefit you the best on the present and in the future.
How was I doing with regards to these tips?
In my current situation, I am really lacking another source of income. I know having a job is my comfort zone and I really need to jump out of it. Anyway, I am hoping for the best and that is for another ‘inspire me to save’ post.
Hope you get something useful from this post.
Please share if you find this post helpful..
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