Friday, February 20, 2009

Do You Have Enough to Pay For Emergencies?

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How much do you have in your savings account? Half of your monthly salary? A quarter of your monthly salary? Do you have any savings at all?

If you cannot answer any of those questions outright with a loud confident yes, then you have a problem.

WHY YOU CAN'T SAVE

It's either you know how, but you can't, or you don't know how so you just can't. Right?

If you know how to save - meaning you KNOW how you can save, it's just that you THINK your expenses are just a bit bigger that you're actual income for the time-being, then all you have to do is adjust your self-discipline. To do this, you definitely need someone to help you. Not to save, but to remind you that you are saving. Let's say a friend or an officemate who'd remind you not to buy that cute little bangle or that nice shiny patent leather bag, or not to go to that coffee shop to get your favorite frappe because you ARE saving money.

If you DON'T know how to save, then you should continue reading down to the last word of this post.

EASY TIPS ON HOW TO SAVE

1. Get what you need, let go of what you want - In a salon, get a haircut, no need for you to avail of that hair spa thingy because it's "on sale". You need a caffeine shot? Go to the coffee shop, get an espresso, no whipped cream or extra syrup.

2. Give to Ceasar what is Ceasar's - Remit what you have to for taxes and everything. You don't want karma hounding you.

3. Prove the Lord's words - Malachi 3:10 said that you can "prove" that God wants to prove himself to you by saying, "Bring ye all the tithes into the storehouse, that there may be meat in mine house, and prove me now herewith, saith the LORD of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that [there shall] not [be room] enough [to receive it]." In simple terms, give your tithes back to the Lord and he will surely bring in more blessings - financially, physically, emotionally, everything! - more than what you can handle.

*Tithes - 10% of everything that comes in. If your total salary received for the payroll period is, let's say P 12,265.00, then you're tithes - the amount you need to give back to the Lord through your church, is P 1,226.50.

4. Save before everything else - The common mistake all of us make is "we'll put into savings what's left after we have taken care of all our bills, expenses, and other payables". Oooops! That's wrong actually. What you need to do is to set aside the amount you want to save before allocating for your expenses and payables.

For example, you want to save at least 20% (this is the percentage most financial advisers tell their clients, the least safest margin) of your total earnings for the period. So from the above figure of P 12,265.00, your savings should be P 2,453.00 - this amount you should set side immediately, put it somewhere safe (or you can open a separate bank account for your savings - a passbook account is more appropriate so you won't be tempted to withdraw any time) and forget about it!

5. Manage your bills wisely - Prioritize your bills. Pay up those that are not so lenient with their terms and that pertain to things you literally need and cannot do without, like your electrical & water bills! Next, budget for your daily expenses, such as food, basic needs and toiletries, and transportation/fare.

For bills with interest, like credit card bills, make sure you pay off the credit card with the highest interest rates. It's wiser than paying off the credit card with the higher balance but lower interest rate. Why? Because interests increase every month, your base does not. The higher interest rate, the faster your payables grow.

6. Discipline - As I've mentioned before, you really can't do this alone. You need a "conscience" to remind you and control your urges to spend, spend, spend!

7. Leave a comment - If you learned something from this, or at least think that this helped you, please leave a comment, I'd really appreciate it!




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