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Tuesday, August 16, 2011

Is It Possible to Have Savings?

If there’s a will, there’s a way! Savings is always possible.  There are people who earn just minimum wage but able to open a bank account and save part of their salary for future funds.  Others invest it to their sari-sari store (a.k.a. “mini-grocery” store) and earn profit. 

Sadly, there are others who earn Php20,000 and above, (and also those who earn PhpXXX,000!), who are single and having the prime of their lives, but are buried in debt and never even get to save even just an insy-bitsy-weeny-portion of their monthly salary.

Often, it is not how much money you earn (I’m speaking here in terms of monthly salary), but how much you keep and save, then invest. ;)

Poor Versus Rich Mindset
I have learned from my mentor, Bo Sanchez, that the mindset of the poor is just summarized in a simple equation:

Income – Expenses = Savings

Poor people, (yes, even those who are earning PhpXXX,000 a month), who have the habit of spending their monthly income to unnecessary expenses and other stuffs that do not generate income, are most likely to end up in debts later on.  Poor mindset are commonly known as people who are “One-Day-Millionaires”. 

On the other hand, the rich mindset is just a twist of the equation:

Income – Savings = Expenses

People who know how to properly manage their finances have the habit of paying themselves first.  When they receive their monthly salary, they invest 20% of it to different kinds of “funds”: children fund, family fund, retirement fund, freedom fund, contingency fund, or you-can-call-it-whatever-you-like fund. Rich mindset people put their savings in investment vehicles that provide them with passive income.  I discussed one investment vehicle in detail on my post: How to Make Your Php500 into Php500,000.

How I Started My Savings
Like you, it was not a “hey-I-HAVE-TO-save-my-first-salary” mental thinking when I started my career and get on my first job.  I also want to spluuuurge. I enjoy the money that I received, and whenever my life’s financial equation goes like this: EXPENSES > INCOME, I blame my company for not giving me enough salary which leads me not to save a single centavo.  I had a very poor mindset.

My first job as a licensed professional offered me Php14,000 per month.  Earning this amount was already big for me. Why? Because I feel that this is more than enough for me to survive. However, due to financial ignorance, I mismanaged my salary and ended up with zero savings. 

A few months before my anniversary with my company arrived, I learned to keep track of my cash flows, did budgeting and was able to recover, bit by bit.  With my monthly salary of Php14,000 less tax, SSS contributions, Pag-ibig payments and PhilHealth, I take a net home pay of Php12,500.  Being aware of how much we earn and how much we spend is the first key to properly manage our finances.  This is just basic mathematics: addition and subtraction. :)

This is how my “financial awareness” started:
How to save_abundantpinoy

The big savings I got was my revised transportation budget.  I moved to a place which is near my workplace and also offered the same rental rate.  ^__^ I also saved on my spendings for food, groceries and electricity.  You can save food spendings, but make it a point that you are still living a healthy lifestyle.  Never save your food spendings and end up starving yourself to death!

PS:  My Php2,500 monthly savings was started when I was 23 years old.  I am now 25, and this savings is now Php60k++ (because I continually save Php2,500 every month).  This savings, however, is not in a bank account.  Banks only offer a small percentage of interest income, less income tax withheld!  My first month of Php2,500 savings was invested in an investment vehicle, and I continually add on to it until now.  Bits by bits, little by little...  As I always say, even the snail was able to make it to Noah's ark. *winks* 

For list of investment vehicles, you can refer to my Helpful Links page located on top.

= = = = = = = = = = = = = = = = = = = = = = = =
Dear Friends,

We can always start with small amount.  In the process, we also develop our spending habit and increase our financial knowledge.  With little that we have, we discipline ourselves to continue to strive harder to make what we have big.

Just always remember that when we are blessed, we are used as instruments to also bless others.  Let us make this world a better place! ^__^

Keep learning and keep moving forward!

Lyn-Lyn \(“,)/


krissy said...

i like this post sis! ^^ congratulations! ^^

Lyn-Lyn said...

Thank you, sis krissy! :) Let's all continue to save and invest. Let's make Philippines a first-world country, too. Yeee'y!!! \(",)/

alvs said...

very inspiring sis lyn lyn :) nakakatuwa talaga :)

Lyn-Lyn said...

Hi bro alvs! :) Hehehe... Thanks. ^___^

Louis Delos Angeles said...

Very nice sis Lyn Lyn :)

As I have said you can start investing even if you have a small salary :)

But hey how come you started at 14k at your first professional work, me I started at 10k only :) hahahaha san kaya yan sis sssssh secret

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