– George Elliot
John’s income is P100,000 but spends P120,000 monthly. Jim earns half of what John makes but spends only P30,000 and saves P20,000 monthly. Who is richer? If the amount of money a person earns is the yardstick of wealth, then the man with the savings is richer.
After earning money, saving is the next important step on the long journey to great wealth. Saving is the practice of setting aside a portion of your current income to be spent or invested for the future. If you really want to get rich, you should learn how to save so you will have money to invest and make more money for you.
The savings formula is very simple – income minus expenses equals savings. But saving is a tough job to accomplish especially during these hard times. Do you know why most people are not successful at saving?
1) They save without a specific purpose. Without a special, specific purpose, you won’t have a strong motivation to save. Have a purpose for saving – have a goal! Know exactly what you will be spending on once you have saved up the amount. You will be a more effective saver if you know that the money will go to a specific purpose – maybe a cellular phone, a new car, your dream house, a world tour, whatever your heart desires!
2) They have no specific target amount. Know how much what you are saving up for costs so you’ll know how much to save. If the Jaguar or Mercedes Benz of your dreams costs P3 million, then that is your target amount. Knowing how much money you have to put together gives you a clear target. The clearer the target, the easier to hit.
3) They don’t set a deadline by which they would have saved the specific target amount. Money and time go hand in hand. After all, they say, "Time is gold; time is money." Have a savings timetable. Without a deadline, you would be drifting your way to savings limbo. If your rental payments are due at the end of the month, make your deadline a week before the due date.
One way to inhibit yourself from withdrawing is to open a non-ATM account. The inconvenience of going to the bank personally to fill up the withdrawal slip is enough reason to discourage you from taking out your money. Another way to resist the temptation of withdrawals is by opening a savings account at a bank far from where you usually live, work or play.
• The best time to start saving is right now. Make it a habit. The younger you are, the better.
• Pay yourself first before paying anyone else. Set aside at least 10 percent of all your earnings.
• Plan and save for your secure and satisfying retirement. Consider health insurance, SSS and other retirement plans.
• Realize that your savings will actually be lesser in value because of future inflation and devaluation.
• Plan and save for the education of your children.
• Participate in a forced savings plan. Have an amount automatically deducted from your paycheck. You won’t see the money, you won’t even miss it.
• Always find ways to save on things you buy. Consider cheaper alternatives.
• Conserve energy. Lower your electricity, water, gas and gasoline consumption.
• Avoid buying on credit. You’ll be amazed at the difference once the time factor and interest get into the picture.
• Check out garage and yard sales, auctions and flea markets. You might find great treasures and values!
• Keep your cell phone habits in check. Plan your long distance and overseas phone calls. Better yet, fax or e-mail.
• Practice car-pooling. It’s practical and more fun.
• Avoid wastage of any kind.
• Recycle and save Mother Earth.
• Use as much natural light and ventilation.
• Dining by candlelight is cheaper and more romantic.
• Have your appliances and car serviced regularly for optimum functioning efficiency.
• Fashion is a matter of look, not price.
• Keep a ready cash account for unforeseen expenses and emergencies.
• Save not only for the rainy days but for the beautiful days as well when you have to go out and enjoy the sun!
• Once you get into the habit of saving, it can actually be pleasurable to see your money grow!
On Friday, set your alarm clocks a little before 7 a.m., 1 p.m. or 7 p.m. (choose which time is most convenient for you). At those times, the whole world will be praying and to join, these you must do.
In front of a glass of water, declare aloud: "I love you water! I respect you water! I thank you water!" That’s all. You may do it anywhere (even without the glass of water) at the prescribed times. Then visualize the bodies of water in your area (e.g., the Pasig River, the pond or sea near you, etc.) and declare aloud: "I love you water of the Pasig River! I respect you water of the Pasig River! I thank you water of the Pasig River!" Let the children join in so their respect and gratitude for water will be instilled in them at a young age.
Remember that the declarations must be spoken aloud, not merely thought. I will be declaring my love, respect and thanks to water and the Pasig River at 1 p.m. I will also pray for the purification and great clarity of the Pasig and the Manila Bay. Please join me. This is the least we can do considering that the human body is 70 percent water. Truly, water is life! Thank you.