Basic Savings Principle
After my marriage fell apart, I was shocked to the core to realize that I was penniless. Stripped of any access of our family account, I was almost to my knees when I knew that I should have prepared for this. But that was the should-have-beens. I am now separated from my husband and beginning to learn the basics of saving for the future.
Here are the basics of saving and how I managed to jumpstart my children’s fund and my very own emergency fund.
Make Savings A Habit
Saving should be a habit. The easiest way to save is to set aside a portion of your income regularly. Pay yourself first. Allocate the rest of the money as you do in an envelope system or whatever system you think works for you. In my case, I have an accordion file that I bought years ago from the bookstore. I slip in allocated fund for everything I needed to pay for the entire month. Each pocket is appropriately labelled, ie. labandera, electric bill, phone bill, transportation, children’s allowance, groceries, house rent, etc. As soon as any utility bill or services has been paid, I slip the receipt on the pocket as proof of payment, and later, the payment will be entered into my expenses log via Quicken.
Automate
You can check with your bank if they can set up your payroll account so that your savings will be deducted every payday. That way saving becomes automatic for you. In my case, since the rental of my house in Manila goes into my main account, I have authorize the bank to transfer a percentage of my income to my secondary account– the account where my debit card is connected. This way, my emergency fund is tucked away in another account, and the money in the debit card is my spending cash for the month.
Start Small
Start by saving an amount that you’re comfortable with from your salary – 5 to 10% is a good bet for a novice. Don’t be overzealous and set aside half of your pay immediately; saving is a skill that you have to develop over time. You would have to unlearn a lot of wasteful spending habits first before your nest egg can truly grow. I started my own emergency fund for P500. I have now increased my allocation to P10,000 per month. I am more earnest in keeping with my pledge so I can be free from financial anxiety.
Think Long-term
To sustain your progress, your savings program should have a purpose. Your mindset should be that the money you save now will be used for your expenses in the future: your child’s college tuition, your safety net should you become sick, or your retirement fund when you’re no longer working. Knowing that the money you are saving will be used for your family’s well-being will keep you on track and motivated.
Do you have other money saving tips? Share them here by making a comment or email them to me at frugal.pinoy@gmail.com
