I got hooked when I first read the front page of Kerygma Magazine’s February issue entitled Taming the Money Monster: Change your Money Habits. For some of you who haven’t heard it yet, it is a Catholic inspirational magazine published monthly and it is a Greek word which means ‘Proclamation of the Gospel’.
According to my mentor and favorite author, Bo Sanchez, how you handle money is a reflection of your soul. Do you agree? Yes, I do. For some of us, we tend to spend everything the moment we receive our salary with the thinking of “di bale na maubos ang pera, ang importante ng-enjoy naman kami ngayon.” I believe there is nothing wrong if we enjoy the fruits of our labor because we deserve it. But we really have to prepare for the most expensive stage of our lives–money for our old age.
Because of the medical breakthroughs, life expectancy of a person continues to grow. People are living longer nowadays. Living too long can be a blessing or a burden. It depends on two things: how healthy you are physically and financially. We definitely don’t want to live until a hundred if we’re sick. And definitely don’t want to live a hundred if we don’t have money or become a burden to our family. We have to be healthy in both areas. Right?
Here’s how to be healthy in our finances.
Four Steps to Control Our Cash
Step 1: Stop Borrowing
If you remember the Steps to Financial Peace which I learned from attending the seminar of one of the Financial experts in the country today, Mr. Randell Tiongson which I got for free (Yey!) Here’s the link: http://www.styleyourfinance.com/2011/09/financial-journey-begins-with-steps-to.html that taught us if we can’t afford to buy something (like gadgets, clothes and the like) now, don’t buy it. Because if you borrow beyond your means, you may also be saying yes to worry, sleepless nights and marital fights. Credit cards are good but only for emergency purposes. And be sure, to settle the full amount on due date so you won’t be paying for the interest and late charges. You might find this link helpful about Debt Management: http://www.styleyourfinance.com/search/label/Debt%20Management.
Step 2: Protect your Assets
I always believe that the greatest asset a person can have is himself, his life. So he must protect it if uncertainties like critical illness and death occur. Remember my story why I got my own Insurance two years ago? One morning in 2010, on home, when I was still an international coffee shop located along Commonwealth Avenue, I was about to cross on the other side (since at that time no foot bridge there yet) when a bus approaching quickly towards me and I was so scared. But thanked God my was telling me to stop moving and so I am saved. I really won’t forget this life-threatening experience that gave goosebumps on my entire body. Lots of questions entered my mind after that incident. Like, “What would happen to my family if I left with only little money for them?” and “Who will pay for the final expenses and where can they get funds from?” I’m thankful I have my protection plans and a savings and investment plan like the VUL (Insurance with Investments). Do you want to know more about the savings and investment plan? Click the link to understand more about the Sun Life MaxiLink Prime: http://www.styleyourfinance.com/2011/09/sun-lifes-maxilink-prime-insurance-with.html.
Step 3: Live on 70% of your Income
I know some of you are wondering if this is possible especially now Summer season is fast approaching. But do you know if you cut back on buying some not-so-essential items, and invest it in an investment vehicle that grows at 12% a year, you’ll be earning millions? You think it’s just a few pesos today–so why not spend it? But when you do, you’re also throwing away your earnings. If you quit smoking, you would earn P6 million. If you cut back on coffee, you could save yourself P10 million. Here’s the fact, you’re throwing away millions! Obviously, you have to watch your big ticket purchases. That’s where a lot of people lose money. But don’t let this happen to you.
Step 4: Invest 20% (or more) of your Income
The moment you receive your income or profit, automatically set aside 10% for your tithe to God. For me, I give my tithes to the Light of Jesus Community and the Feast. For the 20% of your income, 10% should be allocated to your Emergency fund. This is very important. You need this when the house roof leaks and needs repair. For medication and hospitalization purposes. You need some cash in the bank. So put 10% of your income into an emergency fund, and make it reach at least three to six months of your monthly income as a rule of thumb. Once it reaches this amount, you can invest 10% (or more) in paper assets like Stocks and Mutual Funds. If you already have your Financial Advisor, you may ask them if you want to invest in Mutual Funds. But if you don’t have one, I’m willing to help you. Just shoot an email to [email protected]
We really have to know where our money goes.
*Some of the informations are from the Kerygma Magazine February 2012 issue.