Monday, September 1, 2014

I'm working for almost 5 years now, worried about my savings. What can I do?

Work save invest

Stop worrying and start now!

I begin developing my financial literacy journey when I started worrying about my savings account. I'm working for almost 5 years and was living paycheck to paycheck. Yes, I'm an OFW but because my mindset is like "bata pa naman ako" I don't encourage myself to save and learn. I thought that it's okay to spend and give because "kikitain ko pa naman yan". It takes me more time to learn how to say "no" when I really don't have that amount of money to spend or give.

Below are some reasons why I don't have savings on my early 20's.
1. I don't know the difference between needs and wants, saving and investing, assets and liabilities.
2. I don't have clear savings 'goals'.

Every time I received my monthly salary sending money back to my family is the first thing on my list and "saving for vacation" back again in the Philippines is what I always think of. On my first three years working as an OFW my extra savings goes to our house fixing expenses, unnecessary expenses and sending money to help some of our relatives in need. In addition into it, I started buying things I want and things I want for my family. But thankfully, it's never too late to start. I changed my mindset, started this blog and read more about financial literacy. I practice "Pay Yourself First". I automate my savings. I have a written weekly spending budget. I used cash, no credit cards and I don't use debit card too much.

Emergency fund is important to me. You will notice I already blog about it previously, this helps me to understand why I should save and start. It gives me peace of mind (e.g. if I lose my job, sickness, etc.) and it helps me reduce stress and don't fall getting debt.

Ways I save

Buy now or buy later? Don't buy things when someone offer you usually in a mall, think twice before buying. Every time I want to buy something, I asked myself if I really, really need it. Most of the time, I don't. I would rather buy freedom than unneceessary stuff.

I write down all my purchases. It really makes me more aware of what I'm spending and where I need to cut things out to reach my savings goal faster.

I have weekday allowance of $20.00 (Php 600.00). I just have to stick to it! Luckily, my office is 10 minutes walk only from our house and we are very near to the market place.

Preparing a grocery list before going to market. This is weekly and my favorite. It helps me to focus on important goods we need to buy "only".

Eat food at home and leftovers. If I didn't cook at home I buy mixed vegetables for $2.00 at the hawker center.

Know what to buy in bulk and what not to. Buy groceries in bulk when it makes sense.

I don't buy softdrinks (soda). I drink more water and tea.

Keeping receipts. I did this to track my expenses in a day or week. I just love writing down.

Set-up automatic billing to avoid late fees. This is for income tax.

Work out and yoga (free activities). Now, I'm practicing yoga for exercise and I love it!

Share a room.

Stay at home, cleaning time during weekends. I always make sure to clean my space.

Give fund.

Reminding my goals as often as possible. My Goal 1, Goal 2 and it's timeline not only it keeps me motivated but it helps me to make better decisions today to reach those eventually.

Exact and clear amount (3-6 months). If you don't measure it you wouldn't know how much you really need it.

Above all budgeting really helps me to keep on track. Doing this regularly requires time and continuous effort but now I'm happy that it has become a part of our routine and a habit. I recently realized how much money I save without being aware of it. I used envelope system and jar system too depending on the fund type. For example our monthly rental and utility bills has fixed amount so we put it on the envelopes while our grocery fund is placed inside the jar. Here, we are doing zero-based budget. The concept is simple, income minus all the expenses including savings equals zero. If you earn Php 20,000 a month, you want every item that you spend, save, give, invest to all equal Php 20,000. So you know where every one of your hard earned money is going.

I'm glad to know that I'm near reaching my 6 months emergency fund. Financial literacy is one of the most important knowledge that everyone should be aware of. Best wishes to you and I believe that you can change to take control of your money too.

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We're Glaiz and Jey
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