education

26
Sep
2022
Top 5 Things to Save Up for That Are Totally Worth It

Top 5 Things to Save Up for That Are Totally Worth It

Reading Time: 3 minutes

Saving money can sometimes be difficult if you don’t have a specific financial goal in mind. Aside from building your emergency fund, here are 5 top things to save up for that are totally worth the effort.

1. Retirement Fund

We often forget that we need to save up for our retirement. This is because our regular expenses make up most of our budget. However, we need to keep in mind that we eventually need to get out of the rat race and retire from work. So saving for our retirement fund is a long-term savings plan that gives us peace of mind that we can still live comfortably even after our working years. This can be in the form of an insurance fund that pays for your pension, as well as a pension plan from a government social security program that you pay regularly in your time as an employee.

2. Property

Having your own place to rest, indulge in your hobbies and spend time with your loved ones is always a good goal to save up for. Usually, you save up for the downpayment first, then for the monthly mortgage. This could be a condo unit that makes it more convenient to go to work in the city; or a piece of real estate, land that you will eventually build a house on for your family to settle in. If you can’t afford or it is not practical to have property at the moment; then saving up for a long-term rental is also a good plan. Eventually, you will save up for property that you will earn from by having other people rent it.

3. Education

Learning should be a life-long goal and it should be something that you need to invest in. Education is vital for personal growth. If you do not challenge yourself, you will not grow. Saving up for education includes subscriptions to gym memberships and/or a nutritionist or meal delivery service to keep yourself healthy. It could also be tuition or subscription to online courses to improve your knowledge and skills in your field of work. Or you may save up for learning more about your hobby and buying the materials for it so you can start a side hustle and eventually turn it into a business.

4. Used Car

Your own transportation is always a useful goal to save up for. It not only makes going around convenient; it also means you can spend more time with your family members, even if it is on the road. A used car is a practical choice as it is less expensive than a new one. Just make sure that it is still fit enough for use for a long time and that the papers are all in order. Of course, if you are able to save up for a new car, then do so. The feeling of having to spend on a luxury item through your own hard work is always a priceless experience.

5. Experiences

As we work hard for our family and loved ones, we must not forget to enjoy life in the process. That is why we need to save up for experiences or allocate fun money in our monthly budget. This is a short-term savings plan that allows us to reward ourselves for our hard work. It is also an opportunity to enjoy time with the people who we are working hard for. This can be as simple as dinner with friends or loved ones, a road trip or a relaxing weekend getaway; or even a week-long vacation to rest and recharge. Making good memories with your favorite people is always a rewarding experience.

These are some of the things you can save up for; for both long-term and short-term goals. You can have other goals on your list too. The only requirement is that they will contribute to making your life better and your future brighter.

Feature Image: Original Photo by cottonbro on Pexels.

Posted by H.J. Rangas in Financial, 0 comments
16
Mar
2021
Money Lessons You Wish You Learned in School Part 2

Money Lessons You Wish You Learned in School Part 2

Reading Time: 4 minutes

How are you doing with your finances? Do you consider yourself financially stable? If you do, then good for you. If not, you are not alone. Most people are having problems with money because only a few are financially literate. Most of us have to learn financial lessons the hard way. Just imagine all the things that you could have done differently if only you know a thing or two on personal finance. Here are some more money lessons you wish you had learned in school Part 2 (click here to read part 1):

1. Basic Investing Skills

A lot of people are scared of investing. This is just natural; after all, who would not be scared of losing their hard-earned money. You probably heard stories of people losing all their money through bad investments.

However, savings alone are never enough. You need to invest your money too. This is where your knowledge on Investment Basics will come in handy.

True, investing involves risk but it is also a great way to increase your wealth. You can minimize investment risks through financial literacy. Familiarize yourself with the different investment vehicles available out there. For beginners, you can learn about bonds, funds and stocks. Depending on our risk tolerance, you can try for the more advance type of investing such as cryptocurrencies, foreign exchange and stock options trading. It is only through  Investing will you be able to slowly build your passive income.

2. The Power of Compound Interest

Out of all the items listed here, compound interest is one topic that was surely discussed in school. Unfortunately, since a lot of people hate math, compound interest is nothing more than a numerical value calculated from a math problem. You probably forgot the formula on how to compute it by now. Big mistake!

Compound interest is probably the most important concept of personal finance.  If used to your advantage, it can give you vast wealth. However, it is a double-edged sword. It can either make you or break you. If it works against you, it can lead to your financial downfall. Do you know of people who are buried in credit card debt? That is a clear example of compound interest working against them.

Compound interest is the eighth wonder of the world. He who understand it, earns it…He who doesn’t pays it.

– Albert Einstein

3. Time Value of Money

The time value of money is one the most important concept for investors. It simply state that the value of your money today is worth more than your money tomorrow. To put it simply, it means it is better to have your money with you now than at a later date.

This concept involves time. Time is literally money. The sooner you earn or have money in your hand, the faster you can have money work for you. If this concept was discussed in school, making decisions in life would have been a lot easier.

For example, a buyer wants to buy your property at the prevailing market price. You declined the offer hoping that somebody else with a bigger offer will approach you later on. There is no assurance when the next buyer will come. What if the next buyer comes after a year or two? Is it still worth the wait?

Another example is let’s say the luxury bag that you have always wanted to have is on sale. You decided to buy it to take advantage of the sale. You use your credit card for the purchase. Unfortunately, you were only able to fully pay the item after a few months. With the interests incurred during those amounts, you ended up paying more for the bag.

The time value of money is also at work in investing. The younger you start investing, the more money you will have in the future. This also applies to other things such as your health. Choosing the right food and exercising today will keep you healthy. This will save you money on medical expenses later in your life. In practical terms, don’t put off what you can do today for tomorrow.

4. Building Good Credit

Do you pay your bills on time? Establishing a good credit is probably one of the most important things that you can do in your life. A good credit history will make your life a lot easier. Whether you are buying a house or a car, applying for a loan or a credit card or even getting a job; a good credit score will come in handy.

A credit report is an explanation of your credit history. It shows if you have an existing loan, if you are applying for one and your balance. It also shows your capacity to pay and whether or not you are paying your bills on time.

This is very important in your financial life. A good credit history will make it easier for you to get a loan.  It can also qualify you for a higher credit limit and lower interest rates.

5. How Credit Card and Interest Rates Work

Do you understand how credit card and interest rates work? Do you even know how to read your credit card statement? So many people do not understand how credit card and other consumer loans work. As a result, they end up with an enormous credit card debt.

Credit card can be good or bad depending on how you use them. Credit card is a financial tool that you can use as leverage. However, it is never a good idea to use credit cards to purchase goods that you cannot afford in the first place.

The bottom line is that financial literacy can help us make better monetary decisions in our lives. It will help us achieve financial freedom and avoid bad debts.

Teaching personal finance in school can help our children have a better future.

First published in Pinoy Smart Living on 09.18.2019

Photo by Julia M Cameron from Pexels

Posted by A.L. Jonas in Financial, 0 comments
31
Oct
2020
Traveling Will Expand Your World

Traveling Will Expand Your World

Reading Time: 2 minutes

Traveling will expand your world. It’s not just because you are going to a particular destination. Going on a journey is an educational experience. It may be an intimidating experience at first but it is worth it. You get to learn new things and appreciate new ways of thinking. It helps you discover more about yourself as you discover what’s beyond your comfort zone.

When you go home after your travel you are a changed person. Traveling opens your mind and heart to the different ways that people, places and things interact. You learn to see things with different eyes and even appreciate different points of view. Traveling teaches you that new things don’t need to be scary. When you travel, you learn to leave your familiar comforts behind.

In the process, you gain more appreciation for the things that you usually take for granted. Your travel helps you expand not only your horizons but your perspective of things as well. Traveling will expand your world, especially your imagination. It will let you see and experience a whole new world.

Traveling may be hard for some people. If you’re the type who’d rather stay in your comfort zone, then it will be hard to leave for somewhere unknown. But if you want to make a major change in your life; it is one of the best educational experience you can get to expand your view of the world. Traveling will help you learn about yourself more deeply. It will show you different ways of how you can interact with people. Traveling will help you create new memories as well as value history. It will help you appreciate the now as well as the past. You learn to become excited for the future as well. These are just some of the ways that traveling can help you become a better person to yourself, to your family, to your friends and to your community.

Deciding to travel is a matter of courage. Don’t be scared to learn something new about yourself and the world outside your comfort zone. Traveling will expand your world if you allow yourself to do so.

Updated. First Published on Pinoy Smart Living 05.03.2019.
Feature Image: Original Photo by Nicola Nuttall on Unsplash.

Posted by H.J. Rangas in Environmental, 0 comments
11
Mar
2020
The Money Jar Budgeting System

The Money Jar Budgeting System

Reading Time: 6 minutes

Do you want to grow your wealth? Then, the money jar budgeting system is for you. It is a system that helps you control your spending habits yet at the same time lets you grow your future wealth.

Most people dream of winning the lottery. However, did you know that according to several studies, 70% of lottery winners ended up broke within 5 years of winning? Similar studies also showed that the higher the amount of winnings, the higher the probability of getting bankrupt. 

Most lottery winners found themselves in even worse financial situation than before they became rich. So, where did it all go wrong? Lottery winners used the money they won to finance a bigger lifestyle. In short, they start to level up and increase their standards of living. They start to squander on depreciating assets such as luxury cars and extravagant vacations. They also start giving away so much money. This phenomenon is what you call a lifestyle creep.

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People who started receiving a large amount of money has the tendency to squander on extravagant lifestyle and depreciating assets like luxury cars.
Image Credit: LIFESTYLE CREEP

A lifestyle creep is a financial phenomenon wherein people suddenly find themselves with excess income and they are not prepared for it. They have no idea how to handle the excess money that they have. Suddenly, life seems more exciting and expensive. What used to be luxuries became necessities. Their spending increases as they begin to eat at fancy restaurants, own the latest gadgets, drive a brand new car and take more expensive vacations. The new spending habits then slowly develops into a lifestyle. It is creepy because the negative spending habits develop gradually and it is undetectable unless it is already a huge problem.  

Lifestyle creep is highly contagious. You can easily be influenced by the people around you, heightened by social media brought about by FOMO or fear of missing out. 

Unfortunately, it is experienced not just by lottery winners but also by people who received retirement and inheritance money, people who had just been promoted and those people who received an increase in salary. You have seen this happen to people around you and even possibly to yourself. 

Sadly, most people are not even aware that they are already victims of lifestyle creep. 

Does it mean that you have to continue living in the same standard as you were before even with an increase in income? Well, not really.

You can make lifestyle adjustments with an increase in income but there is a limit to it.

How to know the extent of allowable adjustments in lifestyle? The key is to have a spending plan or a budgeting technique. If you want to be wealthy, you need to set some financial goals. You need to make short-term sacrifices and stick to your money management system. You need to practice delayed gratification and opt to put your hard-earned income on investments first before spending them on liabilities. 

THE MONEY JAR SYSTEM

The money budgeting technique described below is actually a modified version of the Money Jar System, which was first introduced by T. Harv Eker, businessman and author of The Secrets of A Millionaire Mind. It is also an expanded version of the Abundance Formula (100=10-20-70) of best-selling author, entrepreneur and preacher Bo Sanchez.

The purpose of a budget system is for you to develop spending habits within your means and at the same time to lead you to future wealth and financial abundance.

It is called the Money Jar system because you can literally start by getting 6 jars and labeling them. In this budgeting technique, you need to divide your earned income into six (6) accounts:

1.  Give Account – 10%

As soon as you receive your income, your first expense should go to this account. You probably think that this is insane. Why do you need to give when you have barely enough to cover your expenses?

The purpose of giving is to put God FIRST in your life.

You need to acknowledge the fact that your gifts and talents all came from God. Giving or tithing is your way of saying thank you to God. More blessings will come your way if you learn to share your blessings. 

Do not give the excuse that you are going to start giving once your income increases. Giving is a state of mind. If you cannot let go of your 1,000 if you are earning 10,000, you will not be able to let go of your 100,000 if you are already earning 1 million. 

Why 10%? Several verses in the Bible talk about giving a tenth of your produce back to God.

Make an offering of 10%, a tithe, of all the produce which grows in your field year after year. – Deuteronomy 14:22

The give account can go to:

  •   Your church or spiritual community
  •   Your favorite charitable organisation
  •   A person in need
  •   As presents to relatives and friends on occasions

2.  Financial Freedom Account – 10%

Don’t you just want to wake up one morning wherein there is no need for you to go to work? You work only by choice and not because of necessity. Well, this account is your key.  It is your investment account. It is the most important account for the wealthy.


Financial freedom is the ability to live the lifestyle that you desire without having to work or rely on anyone else for money. – T. Harv Eker

Remember the story of the goose that lays the golden eggs? Well, this fund is your goose. Kill this fund and you kill your source of golden eggs. Do not commit the same mistake as the farmer. You shall NEVER EVER EVER spend this account.

Youtube Video from Anon Animation Ryhmes for Kids
 

Your financial freedom account can go to:

  • Stocks, Bonds or Funds
  • Business Investments
  • Real Estate Investments
  • Insurance

If you have debts, use this account to pay off all our debts first before you start investing. 

3.  Long Term Savings Account – 10%

This account is allotted for long term spending. This fund has the most flexibility because you can use it for anything in the future just in case you need it. It is your rainy day account or your emergency fund. It plays a major role in ensuring your long term financial success. Having money available when you need it can be a life saver.

Sample usage for your Long Term Savings Account:

  • Down payment for a house or a car
  • Your dream vacation
  • Hospital Expense
  • Tuition Fee Increase
  • House Repair
  • Your child’s birthday party

It is highly recommended that you set up a different savings account for this one. Set the account in such a way that it will be hard for you to withdraw money. For example, instead of an ATM account, open a passbook account. You can avail of an automatic save-up account being offered by banks.

4.  Education Account – 10%

You are your most valuable asset. You need to invest in yourself for you to grow. The more educated you are, the more career options you have. Read books. Attend seminars. Develop your gifts and talents.

It was said that this is one of the difference between the wealthy and poor. The poor people have big TVs while the rich have big libraries. That is because wealthy people put emphasis on continuous learning. In fact, about 88% of the wealthy read for at least 30 minutes each day for personal growth or for career development as opposed to only 2% of the poor.

Success is something that you attract, by the person you become. – Jim Rohn

5.  Play Account – 10%

This will probably be your favorite account – the FUN account. It is an account to spend however you want. Use this fund to pamper yourself. Get a massage. Eat at a plush restaurant. Go to a weekend getaway.  Watch a movie or a concert. Buy that latest gadget. You are allowed to shop until you blow this money away. A small indulgence can have a big psychological impact on your money morale.

So, if you want that expensive bag, sports car or luxury vacation, save up for it or increase your income first until it can fit in your 10% budget.

6.  Necessities Account – 50%

This account is for your everyday expenses. Included in this account are your bills, electricity, food, rent or mortgage, transportation, utilities, etc. If you cannot survive on 50%, that means you are living beyond your means. That is a clear signal that you need to simplify your lifestyle.

Follow this system and you will find yourself gradually increasing your wealth. It is going to be hard the first few years but it is all worth it.

First published in Pinoy Smart Living on 01.15.2019

Feature Image by Posted by A.L. Jonas in Financial, 0 comments

05
Feb
2020
Wealth Rules from the Richest Man in Babylon

Wealth Rules from the Richest Man in Babylon

Reading Time: 4 minutes

You have been working very hard all your life. Yet, you found yourself in the same financial situation over and over again. Your income is barely enough to cover your basic needs. You are trapped in the rat race and you often wonder, what is it that you have been doing wrong? How come there are some people who are getting richer and richer by the day while you who have been working very hard are getting nowhere? The answers to your questions can be found in the wealth rules from the richest man in Babylon.

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George Samuel Clason, author of the finance book The Richest Man in Babylon gave 7 financial advice to those who found themselves in the above-mentioned situation through one of the parables set in Ancient Babylon.

Wealth Rules of the Richest Man In Babylon

In the parable, the king summoned the richest man in Babylon, Arked and asked him why he became so wealthy. The King wanted to know the secret to acquiring wealth. At that time despite the years of prosperity in the kingdom, many people were struggling financially. It was the king’s desire to make Babylon a city of many wealthy men.

Here is a list of Arkad’s 7 Cures to a Lean Purse:

1. Save 10% of your Income

Saving 10% of your income is the first step towards wealth. Do this each time you earn. It may not be much at first but it will grow over time if you do this on a regular basis.

For example, suppose you and your friend are both earning 10,000 a month. Your friend started saving 10% of his income while you continue to spend all of your income. Obviously, after a year, your friend will already have 12,000 worth of savings while you will have none.

Wealth, like a tree, grows from a tiny seed. The sooner you plant that seed, the sooner shall the tree grows.

2. Control your Spending

The second cure is to control your spending. You might ask how is this possible when your income is not even enough to cover the necessary expenses?

Arkad insisted that it is possible. The key is to differentiate the necessary with the desires. Have a budget and stick to it. You can save money on the little things like cutting down on your expensive coffee habits and your cable subscriptions.  You can save on water and electricity in your home. Stretching your food budget is also one way to save on expenses. The point is there are lots of ways if you are willing.

3. Invest

As soon as you have built up your savings, the next thing to do is to multiply that by investing. You will not be able to grow your wealth by merely saving your money. You need to invest your money too.

A man’s wealth is not in the coins he carries in his purse; it is the income he builds, the golden stream that continually flows into his purse and keeps it always bulging…an income that continues to come whether I work or travel.

An income that continues to flow whether you work or travel pertains to passive income.  Passive income should be the goal of everyone. Only through investing will you be able to let money work for you.

4. Guard your Investments

There are many investment opportunities out there. The key is to choose your investments properly and learn to protect them. Choose something that you are familiar with. Don’t invest in something that you know nothing of. Learn about your investment. Consult mentors or experts in that particular field. Just because you know somebody who got rich in that particular endeavour, it does not mean that you will too.

Also, don’t be fooled with the get rich quick schemes being offered to you. Remember that if it is too good to be true, it probably is. The basic rule of investment is that the higher the risk, the higher the return. The lower the risk, the lower the return.

5. Own your Home

Make your home a profitable investment. Instead of making somebody else rich through your monthly rentals, why not make your monthly payments become equity. It will reduce your cost of living in the long run. You would have also acquired a valuable home.

Moreover, Arkad believes that many blessings will come to a man who owns his house. After all, your home is the place where your family will live. It is the place where your children will grow and a place for you to rest. It is a place of happiness and memories for your family.

6. Prepare for Retirement

Every man should prepare for retirement. When you retire, your ability to earn income will diminish. You will no longer be able to work just like when you were young. It is also during retirement years where your health will most likely deteriorate. Thus, you should be ready before that time comes.

7. Increase your Ability to Learn

If you want to increase your income, don’t chase the money. Instead, increase your ability to learn. Study again. Read books. Attend seminars. Learn from mentors. Be more skilful. By improving yourself, you make yourself more valuable. Then success will ultimately follow.


The more wisdom we know, the more we may earn. That man who seeks to learn more of his craft shall be richly rewarded.

Want to learn more about the Wealth Rules of Ancient Babylon? Click here to watch video.

*Quotes from The Richest Man in Babylon.

Feature Image by Lisa Fotios from Pexels Images.

Posted by A.L. Jonas in Financial, 0 comments