Spend less, save more

11 October 2013


Grow your hard-earned money

by Al Sabado

Earning income is not just about receiving money to spend, but also saving funds to keep and grow. So regardless how much or how little you earn, aim to observe prudence in spending. This way you don't only make both ends meet, you also have funds for necessary expenditures and investments. How do you do that? You may start with the following list.

1. Upon receipt of payment or income, don't touch it yet. Save a portion of income or payment, before spending any amount on purchases. Others set aside a percentage (between 30% and 50%) of their gross income for savings, then the rest for expenditures.

2. Set a monthly budget and stick to the grocery list. Looking back, I remember my childhood when my father was unemployed. Mama would go to work while Papa would take care of us (we're five) and the household chores. That went on for five years until Papa found a decent employment abroad as a supervisor in a construction company. But ever since, Mama diligently budgeted whatever money we had. She'd also keep a record book, similar to the account books I now keep as a self-employed income earner; hers was just a consolidated budgetary record, which she maintained all the more when Papa went abroad to work. It was also from Mama that I learned the importance of making a grocery or marketing list of essentials, to keep me from spending beyond the budget. So if an item is not on the list, it's not going in the grocery push cart—that simple!

If you're a busy parent and you can't make a grocery list, get your kids to do it for you. This way kids understand the responsibility of making wise purchases. You can also discuss the list with your kids so you avoid unnecessary arguments with them at the supermarket.

3. Avoid using your credit card or borrowing money. Items 1 and 2 are helpful to avoid using the credit card or borrowing money from other people. If possible, don't bring your credit card when you do your shopping; or if you're disciplined to just live within your means, then you may bring and use it without exceeding the budget. On the other hand, why borrow money from others if you have savings? Think about it.

4. Consider ways to grow that hard-earned money. Now, that's no easy business, especially at this time when prices for almost every commodity and service go up without prior notice. What do you do? You'll probably agree with me when I say, "Spend less and save more." So you think of opportunities where you can do just that and even grow the money you save not only for the rainy days, but also for the sunny days—call that perks for the self-employed income earners (a.k.a freelancers).

I'd like to stress that none of these options can be an absolute choice to help you save or grow your savings. Sure, you do have smart ways of handling finances while money is available. But hold on lightly to these things (i.e., the moola we earn), for "[r]iches profit not in the day of wrath: but righteousness delivereth from death" (Proverbs 11:4).

Bank account savings. It makes me wonder sometimes why some people keep huge amount of their money in their homes. Please refrain from doing that. Save your money in the bank, for your safety; although, we know that banks offer minimal savings interest rates. To offer higher interest rates, banks have explored and introduced financial products in which money savers can invest and realize better opportunities for growing their savings.

Social benefits. Sometime ago, news about SSS executives and employees being given millions of cash bonuses irked many SSS members. Senior citizens also hoped to receive an increase in monthly pension, but to no avail. So why continue contributing to SSS, Pag-IBIG, and PhilHealth? Other than the law mandating income earners to seek membership in these institutions, I believe they will still be helpful in time of need, regardless of the bad news. Besides, member contributions earn dividends, particularly those with Pag-IBIG Fund (see also savings opportunity with Pag-IBIG's MP2 voluntary five-year savings).

Insurance, plus investment. I've heard people invest in life insurance, and their experience while seeing their financial investments grow encouraged many others to at least avail the basic insurance package, just to try it out too. If you're interested to hear more about insurance packages, you may get in touch with my SunLife Financial advisor, Ms Gemma Trinidad-de San Jose via email.

Informed trading. My perspective about stocks trading has changed. And the passage from the Holy Bible that convinced me to engage in this investment opportunity is from the parable of the talents, as it is written in Matthew 25:14-29. I am yet to learn much about it though. But I am convinced the trading business is something legitimate to look into if your intention is to invest and grow your hard-earned money wisely, and in return, provide sufficiently for your families and many people in need. So may I suggest you invest in trading if (a) you have extra cash, say a few thousands, and (b) you know what you're doing. For more info on this investment opportunity, you may read my post about it: Online trading is NOT gambling, but a legitimate investment and source of income.

These opportunities to save up are just a few options to mention, I'm sure. But whatever options you choose, may your trust be in the Lord Jesus Christ—above all and always.

Wealth gotten by vanity 
shall be diminished: 
but he that gathereth by labour 
shall increase.
Proverbs 13:11

Updated April 2015