Financial Know-How: 4 Easy Steps To A Comfortable Tomorrow

It is not only biblical to save for the future or for a rainy day as exemplified by an ant in the Old Testament. I am sure, you and I have the burning desire to grow old without having to worry about our daily expenses. Agree?

Pilipinas Quising, a brethren who works for the Asian Development Bank shared the easy-to-follow steps in achieving a comfortable tomorrow. The journey towards it may be long and often challenging. But it will never be realized unless you decide to do it now and end your procrastination. Enjoy the wisdom I have learned and be financially blessed.

Photo by The Bright Spot

1. Plan

Planning entails creating three baskets from which you will use in certain times of your life categorized as: 

a. Protection basket. The emergency funds you will need in case you get sick or when you experience a calamity.

b. Life-goals basket. The money allotted to help you realize your dreams like a skill you need to learn in school, money to build your dream house and so on.

c. Retirement basket. Is the savings you will use once you decide to stop working.

2. Be thrifty

Our plans will never be feasible if we don't learn to be thrifty. Live within or under your budget. Choose a lifestyle that you can afford and sustain. The value of your purchases will always depreciate, so think many times before buying anything. Don't pretend to be someone you are not by keeping up with the Joneses. And in all your expenditures, allot a budget, including the amount you will need to save. A saving is considered an expenditure. Saving as early as now will be beneficial in the long run.

3. Save

Remember the Pareto Principle. In layman's term, the 80/20 rule. Save 20% and allocate the 80% to your expenses. A saving is considered an expenditure. Saving as early as now will be beneficial in the long run. The earlier you do it, the rewards will be more aplenty. But with the low interest rates the banks offer these days, it is disheartening to open a savings account or time deposit.

4. Invest

Doubling, tripling or earning 100% more from your initial investment is my connotation of this word. Be extremely cautious though before attempting to invest whether at the stock market, in a bank or in an insurance company; inquire, learn and understand. There are risks involved too. And time when making an investment should be your best buddy.

Useful sites about investment:
COL Financial Philippines and Philpad

Do you also dream of a comfortable tomorrow? What do you do to prepare for it?