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I’ve been receiv­ing a lot of mes­sages ask­ing me to write how to invest in the stock mar­ket (in my case Philip­pine Stock Exchange), how to start, and what are the pro­ce­dures.

But with­out prop­er mind­set and guid­ance, invest­ing will be a gam­ble for some­one who does­n’t have the prop­er mind­set on why we do it. Thus, before I write some­thing about it, I will tell you first, how to save mon­ey.

Sav­ing mon­ey is impor­tant for some­one who wants to become an investor. I remem­ber a for­mer col­league who was so eager to invest. He admit­ted that he does­n’t have sav­ings as he spends it on buy­ing new gad­gets. He knows how to save mon­ey, and then he spends it. When he became an investor, he put all his mon­ey in the stock mar­ket, and then after hav­ing a prof­it on it, he will spend it again to pur­chase a more expen­sive gad­get.

Ilang taon na akong nag-tatra­ba­ho pero wala pa rin akong ipon.” (I’ve been work­ing for years, and yet I don’t have sav­ings) I remem­ber as he rants.

I know some of us have been com­plain­ing about it. That after years of work­ing so hard, we won­der why we don’t have sav­ings at all. Sav­ing mon­ey is dif­fi­cult until we learned why we do it.

Why saving money is important and why should I?

Sav­ing mon­ey is impor­tant just in case you will need the mon­ey. “Well, Dhenn I don’t think I need mon­ey. I have a cred­it card for that.”

Hav­ing a cred­it card is good as it gives you the pow­er to pur­chase when you don’t have the mon­ey. When I received my first cred­it card, it was Jan­u­ary 2014, and since I can­not afford a DSLR Cam­era, I pur­chased a Canon 1100D using my cred­it card. I asked then the salesla­dy if I can ask for a dis­count. She said that if I will pay it in cash, I will only pay 16,000 pesos (orig­i­nal SRP was 19,999.00)

That’s a whop­ping 20% dis­count that I could nev­er get in the bank.

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I learned a les­son that year; do not use your cred­it card to pur­chase some­thing expen­sive. If you can’t pay it in cash, it means you can­not afford it.

Sav­ing is not just impor­tant in case you need the mon­ey. You can save because you need an emer­gency fund for emer­gency sit­u­a­tions. You save for retire­ment, a down pay­ment for a house or car, for your future wed­ding, or edu­ca­tion. There are also a lot of ben­e­fits of sav­ing your mon­ey in which I will men­tion below:

Benefits of Saving Money

When I saved mon­ey with prop­er mind­set and guid­ance, it brought a lot of ben­e­fits in my life. I no longer save just to spend, but rather I save mon­ey to invest it lat­er.

For me the ben­e­fits are the fol­low­ing:

1. Increase in income, for a mon­ey not spent is mon­ey earned.

2. Stress-free life.

Accord­ing to a sur­vey made in Aus­tralia, 80% of the work­ing pop­u­la­tion expe­ri­enc­ing stress over mon­ey.

Why? Even though our employ­ers pushed us to have a work-life bal­ance, if we have a lot of finan­cial respon­si­bil­i­ties, we will work and get the pro­mo­tion instead.

Know­ing that you have saved mon­ey, cre­ates a healthy lifestyle as you need not wor­ry about it.

3. Spend with­out guilt.

Have you tried buy­ing an item with your cred­it card? You swipe and sign, there’s no emo­tion and a lot of think­ing involved. After that, you won­der why your bills are that high.

Unlike pay­ing in cash, you will think twice whether you need it. And every time you make large pur­chas­es, it’s painful, but worth it because you work hard for it.

Now you know why you should save and the ben­e­fits of it, I know you will ask how much should you save.

How much should I save?

My answer is; it depends. There are a lot of for­mu­las out there that you can Google it out. For­mu­las may not work for every­one else as we have dif­fer­ent lifestyles and dif­fer­ent back­grounds.

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As for the for­mu­la that works for me is this:

Expens­es = Income — Sav­ings

In this sim­pli­fied for­mu­la, you will minus your sav­ings from the income and the rest will be for your expens­es.

Then how can I deter­mine how much will I save? This per­cent­age works for me as well:

10% = Tithes

20% = Sav­ings

70% = Expens­es

Now the last ques­tion is, where should I save?

There’s a lot of medi­um you can use to save mon­ey and these are:

1. Pig­gy bank. But this is not wise these days because your mon­ey could be at risk.

2. Banks. Thru sav­ings account or time deposits. the safest, but has the low-inter­est rate.

3. UITFs or Mutu­al Funds with low risk. Don’t put your sav­ings to a high-risk medi­um.

4. Coop­er­a­tives.  Safe and most prof­itable of them all but also with risk. Research about the coop­er­a­tive first. Some part of my sav­ings is in AFPSLAI and some on my com­pa­ny’s coop­er­a­tive.

The returns are not that much high, but I earned 4,000 to 5,000 per year, and that is not bad rather than putting it in the bank.

Now at least you know how to save. Share this if it helps you. See you in the next series.

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I blog about my dis­cov­er­ies and learn­ings with per­son­al devel­op­ment, blog­ging, writ­ing, pub­lic speak­ing, and pub­lish­ing. I am a Jesus fol­low­er. Each month, I send out a newslet­ter with free tips on those top­ics.

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