With all the challenges that we are facing right now brought about by the ongoing pandemic, financial problem comes attached to it. This we really need to revisit our spending habits and start saving money in the new normal.
1. What is saving money and why is it
crucial to save?
Did you
know that according to the Bangko Sentral ng Pilipinas’ 2019 Financial
Inclusion Survey, only 53% of the adult population saves?
This
result is as alarming as it sounds. That’s why awareness on the importance of
saving money should be discussed more.
World Savings Day is a
dedicated time frame where financial institutions whether public or private
including financial advocates can gather and promote saving mobilization. The
idea is clear - saving is for every Juan!
Saving is the process of putting
cash/money and parking it in a safe place and can be accessed easily when
needed.
Here are more reasons why you should know
how to save money:
To reach financial independence
The ultimate goal to those
personal finance savvy is to finally reach total financial independence wherein
you never have to worry what tomorrow will bring in terms of your finances.
This can only be achieved if you take care of your money.
To be prepared in case of emergencies
Unexpected expenses such as
car repair, loss of job, medical issues in the family call for an emergency
fund. Your savings could cover the amount needed for the said unexpected
expenses so you won’t be in debt.
To reach a financial and/or personal
milestone
Saving money enables you to
achieve each of the financial and personal milestones you may have.
Without proper savings you can
never buy and invest for a house and lot or a start up business for example.
You need to save money to have enough down payment on a bigger house. Other
personal milestones include a new car or a trip abroad etc.
To not pass up an opportunity
Sometimes life opens
opportunities to us that can cost money. Opportunity like a seat sale to your
dream destination, a pre-sale house and lot within your budget, a new stock on
its IPO stage or even a new business idea.
Your savings can be your
starting capital. Remember, the more money you have, the more options you'll be
getting.
2.
Why Filipinos find it hard to save money
Most
Filipinos find it hard to save money for the following reasons:
● Not
having enough money.
● Leaving
things to fate a.k.a. bahala na
mentality.
● Not
knowing how to save money.
● Debt,
debt and more debt.
● Thinking
it is already too late to save.
Here’s
what you need to remember:
Saving
money is the single most effective way to get rich.
If you
can live within your means, save and invest the rest, you have done well for
your future self.
3. The #NewNormal when it comes to saving money
One of the biggest financial lessons this
current pandemic situation has taught us is how important saving money is.
Emergencies do happen and those without any money prepared, will find
themselves worrying how to put ends meet.
The pandemic also opened new found time
for people to do their side hustles for extra income. From people becoming
bakers, online sellers, or vloggers, to businesses in line of health supplies
like masks booming.
This can also be an opportune time to sell
any unused items you have once you do a general home cleaning. Lastly, school
transitioning to online also means extra savings for lunch and commuting, same
with those who are working in the office.
4. How much should you really save?
Perhaps this question has been on your
mind for quite some time.
We were always taught that saving money
each month is important but we weren’t aware of how much we should really be
saving. Of course not all of our income can be put in our reserve money.
It all depends on certain circumstance
below:
Your Age
Your idea of perfect savings
depends on your age.
People in their 20’s will have
plenty of time to worry about their retirement so most of their saving goals
are short-term. They may be thinking of a car, a condo, a gadget or a branded
handbag. Thus, how much you save each will be lower.
Once you hit your 30’s your
priorities will differ.
You start to build a family of
your own and will have to take care of your aging parents too. Your savings
will be long-term now. You start to think about retirement, your kids’
education and your health.
This will require a bigger
amount to save each month.
Your age surely plays a vital
role in knowing how much you should save.
Your Goal
Goals are just a permanent part
of every financial move a person should do. They are the reason why you are
doing the things you do.
●
Short-Term Goals are things achievable in less than a
year. This could be the vacation abroad you’ve always wanted, a special gift to
your loved ones or a debt you’ve wanted to pay off.
●
Mid-Term Goals are things that are achievable in 5-10
years time. This could be a house, payment for your wedding and/or start a
business.
● Long-Term
Goals are the ultimate things you
want to achieve. Retirement is a solid example of a long-term goal you want to
think deeply about.
Have you listed your goals
yet? Once you manage to specify your objectives you will be surprised at how
quick you are in coming up with the next actions.
Your Income
Your income has a lot to do with
how much you’ll be able to save.
Maybe you are thinking of a
saving goal that’s too much that what you’re being paid. If you want a better
savings you need to increase your income, find other sources of extra money you
can put in your kaban.
Given the three circumstances
above, this is how we will approach the whole “How Much Should I Save”
question: Save according to your span,
your reach and your means.
The more your income grows,
the more your savings you should have and not the other way around. Treat it as
a never-ending cycle of wealth.
5. Easy To Do List to Save More
How do
you save more money?
● Review your finances. Make sure
that you have an idea of your current financial situation. One way you can do
this is by calculating your net worth. It is essentially the difference between
your total assets minus your total liabilities.
● Make a budget. A budget
is an estimate of your income and expenses over a set period of time. Normally
done on a monthly basis, budgets work to:
○
Allocate your
salary/income/money wisely
○
Know how much is
coming in and going out in your cash flow
○
Identify the
areas where you can spend less to save more
○
If you don’t
have a budget, now is the time to create one. And if you are already budgeting,
it’s best to take a look at how you budget your money and keep it as effective
as possible.
● Track your spending. This is
one of the most overlooked ways to save money especially but, super effective -
track your spending. Record where your money goes and match it with your
prepared budget.
● Cut back on unnecessary expenses. Take a
look at your recurring expenses and see where you can cut down. Is there a
particular subscription you can omit? Can you adjust your utility bills and
find ways on how to conserve your water or electricity.
○ With more
people stuck at home it’s easy for our utility expenses to go high. Make sure
that you talk with the people in the household and share to them your goal to
save as well. Through proper communication, everyone will get involved and it’s
way easier to achieve your objective to save more money.
● Learn to live within your means. Living
within your means doesn't mean limiting yourself. To live within your means is
simply making necessary adjustments to maximize the limited money/asset you
have.
● Set saving goals. Set your
yearly and monthly financial goals now. Goals work as motivational tools that
will keep you from building wealth instead of the other way around. Once you
have a set of clear financial goals it will be easier for you to assess your
next action list.
● Start small and make it a habit. You
don’t have to make it big at first. Always start with a small and doable
amount.
○ Psych
yourself and your wallet on saving 1000 pesos every month for example. At the
end of the year you’ll have 12,000 pesos more on your savings fund.
○ Do not
force yourself to save a lot of money at once, make it as gradual as possible
so you won’t slack off midway.
● Join saving challenges. A good
way to force yourself to save money each month is to join challenges. You can
try the 52-Week Money Challenge, Invisible Money Challenge, 1% Money Challenge,
and so on.
●
Increase
your income. Our savings can be limited because of our income.
Thus, try to increase your sources of income as much as possible. Engage
yourself in extra income projects that you are passionate about. Choose a side
hustle you can work on along with your full-time job.
6. Where to Put Your Savings
Now where
should you put your savings?
Cebuana Lhuillier Micro Savings is the perfect
answer to the World Savings Day call to save more, especially for our fellow
Filipinos who don't have the means to really save.
For one, the Cebuana Lhuillier Micro Savings
account can be opened for only Php 50. Cebuana Lhuillier’s Micro Savings works like a normal
savings account wherein you can deposit and withdraw anywhere at your most
convenient time to Cebuana Lhuillier’s 2,500 branches nationwide.
Your Micro Savings account is already
accredited to almost 21,000+ Bancnet ATMs nationwide for easy withdrawal.
What’s amazing is you can even use your Micro Savings account to pay at any of
350,000 Unionpay and Bancnet accredited retail stores nationwide.
Last but not the least, Cebuana
Lhuillier’s Micro Savings account offers a competitive interest rate of 0.20%.
This is higher than other savings accounts can provide. And because there are
zero to minimal fees whenever you do your transaction, your money will keep on
growing. Just make sure you reach the minimum maintaining balance to earn
interest which is Php 500.
