Category Archives: Wealthy Mindset

Three Tips on Savings That Might Save Your Future from Money Burden

savings tips
Photo credit: Wikimedia (Common)

Many people want to save, but only few really save. All of us dream to have a secured future where we don’t worry too much about money. A future where we can travel to places we want to visit or relax in a resort somewhere for a couple of days. Some of us save to prepare for the uncertainty or we say for emergency. Some save for the education of their children, build their own houses and to finance their retirement. There are many reasons for us to save. However, not of all of us do save. In fact, we spend more than what we save. We borrow so much money that we find ourselves buried in a mountain of debt. Remember the formula:

Income-Savings = Expenses

Unfortunately, most people do not follow it. Instead, unconsciously they use this

Income-Expenses = Savings

The former formula guarantees wealth. The latter guarantees poverty.

I remember a story told by a friend to me about a husband who was planning to divorce his newlywed wife whom he discovered shortly after the wedding had a debt of more than a million on her credit card. The girl had been using her credit card to the limit that she didn’t notice the increasing interest. She had been paying at a minimum, and she had no savings at all. Her behavior about money put her marriage on a very shaky ground even before she approached the altar. This is a true to life story which tells us the importance of savings and avoiding debt in our life. We don’t want to happen this to us so in this post I’d like to share three tips to save for your future.

  1. Set aside a portion of your income and put it in an account where you can’t see it. How much should you save? It depends. But a good start would be 5 percent. Every payday, get the 5 percent and put it on a separate fund before you start paying your bills. Do this for the next three months. Then increase it to 10 percent if you think you can afford it.
  2. Live below your means. We have often hear this, but I need to remind you because the latest smart phones are on their way to the market. Be patient. Before buying something that’s a bit expensive, list down all its benefits and wait a month before buying to give you more time to think it over if this is necessary or not. Oftentimes, we get carried by too much excitement that results to impulse buying. Don’t envy others who have more things than you. Be grateful for what you have right now.
  3. Be constant. As you start savings, you sometimes feel tired. That’s a normal reaction when you do something repeatedly. But, continue savings until the point when you are the one who is excited to put more money in your savings. It is rewarding to see your savings growing.

But, it doesn’t stop at savings. Saving is only a start to develop the habit. We also need to invest our savings. I will talk more on this in my future post.

If you have more tips to add, please feel free to write in the comment section.

By the way, you might also want to read the six steps to financial freedom.

Wealth? What it is really?

wealth

I’m currently reading a very interesting book entitled “The Millionaire’s Next Door”. I was fascinated with the title that I had to find a way to have a copy of this. After reading a few chapters, my view of the concept of wealth dramatically changed. I thought I’m wealthy when I have millions in my bank account; or when  I live in a very expensive house in an upscale neighborhood within the city, or drive the latest brand of BMW or wears a P200, 000.00 worth of watch. To my dismay, this is not so. In the book, the authors Stanley and Vanko made a study of who really the real millionaires.

During their research, they interviews thousands of millionaires around the United States. After many months of visiting these so-called millionaires next door, they discovered that the real millionaires are not really what we perceive to be. Eighty percent (80%) of the real millionaires don’t live in a high class subdivision. They don’t wear  branded apparels and accessories. They don’t buy the latest I-phone model or travel in a presidential suites. Some of them have been driving a car made ten years ago. The real millionaires in America are not the Hollywood personalities or the CEOs of a large and successful companies.

Who is the Millionaire Next Door?

Maybe the neighbor  you fail to greet everyday is a millionaire or that man wearing an old shirt and a pair of jeans or it could be the person you meet daily. The real millionaires in the United State are ordinary people who live an ordinary life. Some of them are farmers, firemen, businessmen, and employees. They have accumulated so much wealth that even if they don’t work for the rest of their lives they will survive. And this is the meaning of wealth I want you to instill in your mind.

Wealth is measured by how many years you will live if income ceases coming in. Will you survive for the 20 to 30 years after you retire with the lifestyle you always wanted. If a person has monthly lifestyle expense of 30,000 pesos and his investment can sustain him until he died, is he wealthy? Or the other person whose lifestyle costs 200,000 pesos a month but can survive only for five years, is he wealthy?

For you, what is wealth?