We have a job that earns us a decent salary. However, most of the time, it doesn’t make it until the next payday. What’s causing this? Would this be the case forever? Saving money is not as easy as you think; on the other hand, it’s not that difficult as well. It might be a bit challenging especially if you’re under pressure but these are good scenarios if you’re looking to have a bright and a successful financial future. You’ve gotten all personal saving tips but it’s still not enough. Where am I possibly going wrong?

Should I invest or should I save?

This has been a question thousands of people go through everyday. To answer this question, based on a financial advisor, the amount you spend on investing should be out of the budget that you have – even your emergency fund. So, it is imperative to know that before you invest, you need to ensure that you have a tight cash flow. If that’s not the case, then you need to start doubling your income (at least) in order for you to have ample budget for you to invest.

In previous posts, we’ve made sure to let you know what small businesses you can start. These businesses are not the businesses that would require you hundreds and thousands of pesos to start. These businesses are simple, easy-to-execute, and you can do them in the comfort of your own homes.

Given that my income is enough for myself, what are the best personal saving tips I can have?

No matter how difficult your current financial situation is as of the moment, you can turn that into an opportunity with the right amount of gut, discipline, sacrifice, and of course positivity.

Read: What Businesses Can Families Of OFWs Here In The Philippines Start In Less Than Php20, 000?

1. What are your financial goals?

First things first, discover what your financial goals are and set a standard. You can’t just go and say you want to save; you need motivation, you need to drive yourself up in order to reach that certain standard. You need to start with your current financial needs. Once you get the hang of it, start to slowly think of your financial future – start securing it.

Your financial goals can both be short-term and long-term. Although we can’t deny the fact that we sometimes lose focus, getting back in shape is the way to turn it all around. Discover what your goals and needs are and exceed whatever you expect from yourself.

2. Be in control of your finances

We are slaves of money and fortune and therefore, it’s easy to say that they control us. Once you’ve found what your needs and goals are, observe now how you’re managing your finances. Do you even consider saving an amount that would make you last until the next paycheck? Do you prioritize your expenses? Do you buy stuff you don’t really need?

A simple tip is to list down your expenses together with your take-home pay. List down the things you spend money on on a regular basis. Then, weigh it if it’s really something you should be spending money or not. If your decision is the latter, cut it down from the expenses and compute for how much remaining money you will have.

In the event that your income is not really enough for your lifestyle, boost your income by working smart and by getting different sources of income.

Read: 8 Best Business Ideas for Stay-at-Home People

3. Grow your savings and start to plan on your investments

From here, it’s just you. By doing the first two steps, you will be able to save on a regular basis. At this point, you should be able to accumulate a fund somehow for yourself. You have the choice to save it more or to invest it. In this regard, it is highly advisable that you take the risk and invest it.

Read: Saving vs. Investing

But as we’ve mentioned above, before you decide on investing, make sure that you have funds for your everyday life and for your emergency fund. You can’t test the water with both feet; try it first and if you think that that type of investment is for you, go and take the leap. Once you start on investing, set an asset allocation that would be tailor-fit for you. Ask yourself these questions:

  • How much of my savings should be in my investments?
  • Would I be able to make this money grow more through different investments?
  • How much should I invest in bonds or fixed income instruments?
  • Do I have the capacity to continue on with this type of investment?
  • How much should I budget for rental property?

Once you’re comfortable in making these investments, it’s time to diversify. Having a single investment won’t make you rich or successful; although it can be enough to accommodate to your financial needs, you won’t be able to enjoy the life that you want. So, you need to take more risks and to start investing more.

4. Assess your plan every now and then – make it flexible

Always remember that thriving for some goal is one good way of ensuring that you’re on the right track. Different things can happen and it can lessen your motivations – on the flipside, it can heighten it. In the event that it changes, just be flexible. Do not stress yourself or put yourself in too much pressure.

Say for example if your monthly income increased, you need to be flexible enough to put more into your investments to yield larger rates of profit. These types of things are what makes a successful person successful.

Read: Businesses you can start under Php10, 000

Discipline is the key to winning investments. If you ever get into a situation, do not withdraw your investments yet. This is why it is recommended to set aside at least three (3) times your expenses plus an emergency fund. This is for you to engage in more investments to make yourself more knowledgeable about it and grow.

I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty six times I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed – Michael Jordan

Do not be afraid to take risks. As a matter of fact, risks shall be your playground as everything you do incurs risk. If you want to invest – there are risks of losing money involved. If you want to save – the risk of not being able to properly execute it is there. In the world of investments, saving money, discipline, and controlling your finances are key. You can’t just let temporary things take over your whole financial capabilities. You need to learn to let things go and let things grow. If a certain investment is not for you – leave it behind and find a new one.

Since right now, there are a lot of scams that promise good yields of profit, people are being succumbed into it. If you’ve ever been scammed, don’t let it consume you. Let it be your motivation for you to learn more and to strive more.

Henry Ong, RFP, is president of Business Sense Financial Advisors. Email Henry for business advice [email protected] or follow him on Twitter @henryong888.

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