It’s not how much you earn, But how much you save.
Tag Archive for savings
Do you have a stable source of cash every month aside from your job?
If you are like most of us, you probably don’t have cash-generating assets yet.
That’s okay, friend! If we keep on striving, we’ll acquire these additional sources of income on top of our earned income in the near future.
So while we still don’t have that much-coveted secondary source of income–from rental properties, franchise profit, stock dividends and the like–yet, we might just as well decide and strive to lower our living expenses and cut off unnecessary luxuries we may have.
Then, treat the amount of excess cash we had gleaned and accumulated as our: “Saved Income“.
Okay, I’m not sure if there’s such a financial term called “Saved Income”, but for the sake of posterity, let’s coin this term as:
The difference of the previous monthly living expenses budget less the actual cash spent in the current month.
Saved Income = Monthly Budget – Actual Expenses
Say, your budget last August was $1,000:
- Rent: $ 600
- Transpo: $ 100
- Food: $ 200
- Entertainment: $ 100
This September, you decided to move to a much cheaper room; cut off excessive parties, movies and gimik expenses and cook your own food instead of eating out.
At the end of the month, the actual amount of your living expenses will be:
- Rent: $ 350
- Transpo: $ 100
- Food: $ 100
- Entertainment: $ 50
- TOTAL: $ 600
To calculate your Saved Income:
= Monthly Budget – Actual Expenses
= $1,000 – $600
That’s equivalent to a 3-digit monthly income ( $400) or worth P 13,480 cash back at home.
$ 400! = P 13,480 !
Where can you earn that amount of money these days? (If you know where, don’t forget to drop me an email 😉 )
Again, I just coined this terminology and definition for this article so feel free to share your two cents on this, and I hope you get the drift.
There you have it! While waiting for the monetary fruits of our businesses, properties and investments of the future, let’s decide to earn that “Saved Income” as an alternative, this very day. Just as the old adage goes: “A penny saved is a penny earned.”
Remember, every Sing Dollar you save is equivalent to around P33 back home.
Not Bad right? 😉
Yan ang formula kung ilang prosyento ng iyong kita ang na-iimpok mo sa isang buwan. Tinatawag rin itong: “Average Propensity to Save“.
Si Buboy Batumbakal ay isang Sales Manager sa McDo na kumikita ng P 30,000 kada buwan.
Ang gastos nya sa renta, pagkain, pamasahe, gimik at kung saan pa ay P 10,000. Maingat siya sa kanyang mga gastos at umiiwas sya sa bisyo kaya’t buong-buo nyang naiipon ang natitirang P 20,000.
So kung kakalkulahin:
Savings Ratio = Savings / Income
= 20,000 / 30,000
Mga 2/3 ng kanyang kita ang kaya niyang naitatabi.
66.67% rin ito, isang malaki porsyento na masasabi nating marunong humawak ng pera ang isang tao… at minsan, kung gaano rin kakuripot ang mga ito! 😉
Tignan rin natin si pareng Juan Tiyaga:
Siya ay isang OFW na nagtratrabaho sa Singapore bilang isang office clerk. Kumikita siya ng S$ 3,000 kada buwan o P 99,000.
Para makatipid, nakihati siya sa tatlo pa niyang mga kasama sa isang room sa Woodlands kaya $200 o P 4,950 ang renta niya kasama na ang mga bills sa tubig, kuryente, at iba pa.
Hindi siya bumibili ng pagkain sa mga kainan o Kopitiam kundi namimili sila ng kanyang kasama at nagluluto sa bahay para pagkain nila kinabukasan. S$100 lang ang kontribusyon nila bawat isa.
Kahit mahilig sa mga computers at gadgets si Juan, pinagpasyahan niyang huwag kumuha ng iPhone 5 at kung anumang bagong gadgets, kahit pwede namang hulugan, kaya wala siyang extrang binabayaran buwan-buwan.
Ang total na gastos niya sa buong buwan ay umaabot lamang ng $500 o P 16,500 kaya naman nakakapagpadala siya ng $ 2,500 o P 82,500 kada buwan sa Pinas.
Kung titignan natin:
= 2,500 / 3,000
83.34% ! Wow!
Sa panahon natin ngayon eh saan ka pa makaka-IPON (hindi Kita) na tulad ni Juan Tiyaga na P 82,500 kada buwan.
Ikaw, ilan ang Savings Ratio mo?
For most employees in the Philippines, tomorrow is, once again, the much-awaited Sweldo Day! Yehey!
Remember to immediately transfer the amount of savings from that Payroll Account to your Emergency Fund, Long-Term Savings, or Investment Account as soon as you can… before it’s gone!
It is possible that you might overspend your money instead of sticking to the budget you set a month ago. Based on my–and everyone else’s–experience, this always happens causing us to use our cash on hand, credit cards or credit lines impulsively, which leads to our financial nightmare once the eye-popping, mouth-widening bills have arrived.
When our wallet is stuffed with excess 500 and 1,000 peso bills plus a plethora of credit cards… How can we resist the temptation then?
I simply can not… and most likely, so are you and the rest of the Filipinos. This is the Scary Risk you have to face and prepare for if your excess bank notes, which should be “saved” and protected from your squandering self, are left there in your pocket–easily accessible, easily lost.
So… Cut-Off the Risks now!
This is an important and urgent task for you to do every payday, especially if you already know yourself that you can not handle your finances well.
For OFWs, it is a good practice to remit your hard earned money as soon as you got your pay. If you keep this habit, I can personally assure you that you’ll reach your target savings for your beloved family in no time.
Working abroad is hard and lonely, with our loved ones missing us dearly. So let us do the right choice today, or go back home still deep in debt and with no sufficient savings, let alone owning an established secondary source of income that will augment our salary once we are back home.
It’s our money. It’s our choice. And it’s either our Financial Success or Regretful Failure. So please, don’t pass the burden to someone else.