How much do you have?

Money definitely doesn't (and shouldn't) make the world go round but it is a tool that we use to help us bridge one day to the other. As small as P8 in a jeepney can transport me from Biñan to Sta. Rosa while a P10000, without seat sale, can bring me to Singapore. We have different values and knowledge when it comes to spending money but we all have one common goal - to alleviate or prevent ourselves from hitting rock bottom poverty. How can we do it?


I already tried a couple of things in the past - opened a mutual fund account, wrote articles for Essays.ph, answered surveys and even tried reselling Baymax neck pillows. Do I consider myself rich now? With love, YES! But with money? Far from it actually. Am I discouraged with my life because of this? Definitely NOT! I hope you all feel the same. Because again, money shouldn't make the world go round.

How do we keep on moving forward despite having the same financial struggles everyday? Three weeks ago, I am very fortunate to attend a financial wellness seminar organized by the company I work for. I got to reflect on a lot of learning but up to this day, I am still trying to absorb it all and I'm in the process of aligning my actions to my goals. So here I am sharing with you again the important notes I got from that day's seminar. Just because, sharing is caring! 😉

FIRST, you should identify which area in your lifestyle is costing you so much. Then you try to improve your spending habits if you see that the identified areas are not very important. You can only do this by monitoring and keeping a record of your savings and expenses. Every single thing you bought whether it costs P1 or P1000 should be documented. You should take note not just the daily expenses but also your existing loans and debts. Settle all of it so you can start anew clean page, most especially if you have quite a lot in your hands.

Write down or type it - any form of documentation.

SECOND, no matter how small, always keep a portion of your salary to the savings department. You'll be surprised by how much your money will be at the end of the year. It is also important to have an emergency fund which is usually three months worth of your salary. It can be used for unexpected health needs or if you lost your job, for example.

Any saving scheme - even 52 weeks challenge!

THIRD, if you have reviewed and have a complete knowledge of your cash flow, you can try venturing out into investments such as Mutual Funds or Unit Investment Trust Fund (UITF). Admittingly, I am guilty of going through the third step hurriedly before I stabilized my cash flow and savings. That is why I am trying to fill in the gaps up to today. The good thing about the modern times is that you can search anything in the web. Try reading articles about the two modes of investment I mentioned or ask a family or friend whom you know is knowledgeable about the topic, that's how I started!

The FOURTH one is based on my personal opinion, that is to never forget to reward yourself. Take note of the term "reward" and not splurge. Have a set limit on how much you can buy to make yourself feel that you're not overspending money at the same time you get to treat yourself for all your hardships at work.

In all honesty, we always hear these tips from our family and friends or read from blogs in the internet. So we say, "what's new?" But the most moving part of the seminar for me is the topic about retirement funding. When I was younger and much more innocent, I always had this idea that when I grow up, I will be working or having a business, retiring at the age of 60 and making way to spending over my luxuries. But I never really thought of questioning myself, "Can I even sustain this kind of lifestyle in the years that I am living?" Let me give you a rough example.

DISCLAIMER: This is not an actual formula copied from a source. The figures and calculations are all my assumptions.

Assuming below is your typical expense per month when you retire at 60, and you get to live until you are 80 years old:

Shelter (renting, paying mortgage, maintenance in your household) - P10000
Bills/Utilities - P10000
Medicine/Health Care - P12000
Food - P10000
Clothing - P5000
Entertainment (watching movies, attending reunions and parties, etc) - P5000
Gifts (to family) and donations (to Church of your choice) - P5000
_____________________________________________

TOTAL per month - P57,000
TOTAL per year - P684,000 (P57,000 x 12)
TOTAL for 20 years - P13,680,000 (P684,000 x 20)

Approximately P14 Million for 20 years. Wow. The amounts I indicated are all conservative and I just covered the basic expenses. Just a disclaimer, AGAIN this is not a formula from a text book or a subject matter expert. What I did is to just list down the categories of the expenses I assumed that I will still be acquiring when I turned 60, added it up, and multiplied by the years of my life expectancy. If you still cannot imagine the impact of that number then continue reading.

Because we are not sure on how we are going to have that amount of money when we reach 60, let's assume that we are planning to save starting today. We then divide the total amount (P13,680,000) to the number of months between now and the year I reach retirement (384 months = 12 months x 32 years because I am only 28 years old now).

P13,680,000 / 384 months = P35,625

(The 28 year old me needs to save at least P35,625 per month starting today to have P13.6M by the time I reach 60 years old)

Now, does it make sense?

Of course, not included in the calculations are other variables like the retirement pay you will get after years of service in your last job, the percent increase of your income after years of working and the inflation rate of products and services from now up to the year of your retirement. What if you still have car loans? Or you're eyeing a certain number of vacations per year? Will your savings make it? We Filipinos are known for being madiskarte. But there is a difference in being such and being ready for the future. As early as now, stabilize your finances and debts, prepare a solid emergency fund then figure out how to grow your money. I am learning my way to mutual funds. =)

This is a good thought to ponder on not to become greedy with money but because we wanted to live a long life together with our loved ones without having to think all the time about debts here and there or what to do if someone in the family gets sick. Yes we all need to live now and not in the future but while YOLO and FOMO is fun, after the laughter fades away, what will be left of us? Empty pockets? More than the physical aspect of collecting bills and coins, we should target the root cause of the problem which is our behavior in spending and saving. It is also a perfect point of reflection for would be husbands and wives because you will need to strategize on how you want to manage your finances.

Take time to absorb and think through all of this today - even weeks! We don't need to be subject matter experts tomorrow. Don't get easily frightened, well get past through this just like we always do. 👊