(Photo from AFP)
INQUIRER.net’s personal finance offering for the day has a quote that needs to be given the limelight as often as possible:
Some people reason out that with their meager income, they can’t afford to save. But the reality is, no one can afford not to save.
I realize that there are different successful strokes for different folks when it comes to savings. I am not anal with tracking expenses (just like All Financial Matters and he said it so nicely hehe) so jotting down each expense in a worksheet doesn’t work for me also. For others, that’s the only way they can save regularly.
The single most important tip I have heard so far on saving wisely is automating your savings. I was interviewing a newly wed couple last weekend and their eyes just lit up when I told them about automating savings.
It’s no big surprise why people like this tip. Budgeting is such a painful experience. Shopping on the other hand is bliss! So, the best way to save is not to let that money pass through your fingers. Automate your savings, and spend what remains the way you want to spend it! Simple, quick and easy.
How do you automate your savings? Let me count the ways.
- 1. Set up a separate bank account (passbook only) and write yourself a check for 12 months to the tune of whatever amount of savings you target monthly. Every payday works too. Treat this check as your most important “billing” for the month, second to tithes.2. Set up a separate bank account and program your payroll account to transfer a set amount to that separate bank account regularly, monthly. My checking account with Philippine Savings Bank has this feature. Many other banks already have this service also. If your bank doesn’t, maybe it’s time to switch!
3. Some mutual funds, unit investment trust funds, and variable unit-linked products also allow payroll deductions. This is another option.
For this to work, however, credit card debt and other high interest debt should be at a minimum. No use saving when you’re paying high interest on consumer debt.
Say this with me: no one can afford NOT to save.
Saving automatically will allow you to enjoy what you have. Shop, spend, eat with gusto, because you have already taken care of saving for tomorrow. Compare that with trying to track each little expense and scraping savings from the bottom. Nope, not for me. I like my steak eaten with a smile ☺
January 31st, 2008 at 9:38 am
ian, i don’t have a list of them but i know of a couple like philam and MFMCP. I realize a survey would be a good idea. Some VULs also allow automatic charges to your credit card. I like this because I get rewards, but this will only work for those who pay their credit cards in full monthly.
January 31st, 2008 at 6:36 am
Early last year, I was able to convince my husband to save money — finally!!! He’s just the type who would not let money last long in his hands and will spend it right away — for WANTS and not needs… But finally won over him and let him realize the wisdom of saving — saving for the rainy days, ikanga… anyway, we opened a separate savings account in a bank where it will be inconvenient to withdraw the money - para hindi kami ma-tempt magwithdraw…and started out saving $25 per week deducted from my husband’s payroll… and few months later, we increased it to $50 a week… these savings are what I call - perang hindi mo namamalayan, may malaking pera ka na pala at the end of the year…. yes I agree, it is better that the money you will save should not pass your hands — diretso na sa bangko and just let it grow!!!
January 31st, 2008 at 1:47 am
salve, you know what i think your readers may want to see on this savings thread?
a comparison sheet of the different savings options and rates offered by phillipine banks. so your readers can see for themselves where best to put away their pesos for a rainy day.
in case something like this already exists, then just ignore my post haha…
cheers,
oda
January 30th, 2008 at 11:11 am
i do this with my chinabank current account by transferring a specified amount at regular intervals set in my online banking account to another account. my regular payments to our cooperative also work this way. chinabank will send me SMS and email confirmation of my transactions
no more trips to the ATM to transfer funds
January 30th, 2008 at 10:20 am
hi, salve. you are sooooo right! in these times, we really can’t afford not to save.
it is true that when the cash is on hand, it’s very easy to buy and buy, and then start wondering where all the money went.
now, my husband, daughter and i automatically set aside 20% of gross earnings and deposit in passbook acct. - not easy to withdraw that way, in case some WANT appears in the mall. we also don’t spend our P5 coins and P200 bills. malaki din savings sa gano’n.
my sister, on the other hand, just dumps all the coins left at the end of each day and saves them.
every peso truly counts…