"The spend thrift is happy a few hours; the saver, all his life."
"Beware of small needless expenses. Small leaks sink big ships – and big men – and big business – and big nations."
"Failing to distinguish between needs and wants keeps many people poor. Think."
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It's gonna be a long-weekend here in the Philippines. Nov. 1 and 2 are declared non-working holidays! Yehey!!! What are your plans for the 4 day break? Enjoy, have fun, but don't break the piggy bank! =)
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Maybe you can alot a "small" amount of time to catch up with your personal finances? Can you spare half-a-day or even 1 or 2 hours to do your financial planning chores? You will have a total 96 hours (4 days multiply by 24 hours) of free time, anyway. How much time can you allocate for your financial matters?
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I was listening to a John Maxwell CD the other day and he said, "Most people spend more time planning their summer vacations, than spend time planning their lives!" I would like to add that aside from physical (or health), relational (or families), intellectual (or careers) and spiritual, the "financial" aspect needs proper attention and planning too.
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So for the long-weekend break, may I suggest 10 things you can do with regards to your personal finances:
1. Calculate your net worth (assets minus liabilities). Have you ever wondered where are you now financially? Do you have more assets than liabilities, or the other way around? Since you graduated from college, how long have you been working? With the XX no. of years you have worked, "anu na ang mga naipundar nating mga ari-arian at magkano na ang ating mga pinagkakautangan?" Don't worry if you have more "utang" than assets. It simply signals that you need to start controlling your finances and believe that a better future lies ahead!
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2. Assess your spending habits. Do you spend more than what you earn? What items do you usually splurge on? Do you know how much are your regularly spending on bills, food, cellphone load and other discretionary items like watching movies, coffee at Starbucks, dining out? Maybe its time to jot down and record your expenses on a daily basis to keep track of your spending. Also, maybe it will also be helpful to come up with a monthly budget to ensure that all expenses are within limits and a certain amount/percentage is allocated for savings.
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3. Assess your savings/investment habits. Do you save or invest every payday or on a regular basis? Do you allocate at least 10 or 20% of your income for savings purposes? Where do you save or invest? Is your money earning more than 4 to 5% per year (this is the average inflation rate)? Have you explored other savings vehicles aside from savings and time deposits? Maybe its time to learn more about stocks, mutual funds, unit investment trust funds, variable or unit-linked insurance. To learn more about personal finance, check out "www.investopedia.com" or search J. Randell Tiongson's (personal finance coach) blogs or grab a MoneySense magazine at National Bookstore.
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4. Review your life insurance policies. Do you already have a life insurance? If you are the breadwinner of the family or you think your loved ones will suffer a financial loss in case of you pass away, then you need to get a life insurance. If you already have one, check how much is the basic coverage and what are the other benefits/riders. Do you have protection against disability and critical illness (i.e. cancer, stroke, heart attack, etc.)? To know if your life insurance is enough, ask the help of a financial planner so he/she can perform a "financial needs" analysis. You can ask me too, of course. =)
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5. Organize your financial documents. Its time to dust off those important files and place them in secure/safe location. These include your birth certificates, marriage certificates, land titles (TCTs), bank passbooks/statements, credit card statements, investment/stock certificates, insurance policies, memorial plans, health plans, etc.
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6. Write your financial goals and dreams. What are the things that you still want to accomplish in life? Buy a new car, get that dream house, or study abroad, or set up a college plan for your kids, or a retirement fund for your self and spouse? It helps to write it down, be specific and set a realistic deadline. Since you will be on a vacation, pick a good spot (whether at home or by the beach) to reflect on the things you want to do and the legacy you want to leave for your family. =)
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7. For our retired parents. For those who still have parents, I hope they are still well and enjoying their retirement. What I will say next maybe a little sensitive, but I hope you will see the value of these things. For one, we need to start thinking about "estate planning". Estate planning is more than just preparing a last & will testatement. It is more importantly about protecting and preserving the wealth they have accumulated by minimizing estate taxes in case at death. Study about estate planning or consult a lawyer or financial planner. Other things we need to consider now is getting a memorial plan and purchasing a memorial lot.
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8. For our young children. For those who have young kids at home, you need to start planning for their college education. Where do you want them to study in college? How much would it cost you in the future? How will you save? Are you going to save on your own, or will you purchase a college educational plan from reputable life insurance companies?
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9. For our retirement years. When do you plan to retire? What kind of lifestyle do you want to have when you retire? Have you started saving for your retirement or "bahala na"? How do you plan to save for your retirement? Do you think your SSS or GSIS pension or your employer's retirement plan is enough?
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10. For our community. Do we think only about ourselves and our families? Or do we aim for a higher purpose of serving and giving back to our communities? The Gospel today was about the 12 apostles and the Homily was about vocations. The priest asked an important question, "We all have different vocations/careers. Whatever vocations we have, how do we show Christ to others?" Do we give our tithes, support a charity/foundation, help the poor in our own little way, or do we share our time, talents and treasures? Maybe we can include just one more item in our financial budget for tithing, sharing and giving.
Hope this helps.
Ge
Gerald Cantor is a Registered Financial Planner graduate and a Financial Consultant of Pru Life UK. He is also a Certified Public Accountant and a Certified Internal Auditor. Ge is proud to be an ex-OFW, a "career-shifter", a baller, a newby entrepreneur and most importantly, a "proud" dad of Gia (4yo) and Clarie (2yo).
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