Financial health is much like your own health. We all want to be Mr. or Mrs. Fitbod holding that canned tuna on the television screen, but come January, we are all asking ourselves… Where did we get that extra 5 Kg from?
Similarly, no matter how much we get paid, whether thats P10,000 per month or P100,000 per month, often times, come pay day, we Filipinos peek into our bank account and ask ourselves… Where did all the money go?
It’s nothing to be ashamed of. In a 2015 survey by Gallup, a whole two thirds of the world has no idea how to handle their own money. But, again, like our health, Filipinos are living longer and longer, and the money required for that, obviously becomes greater and greater.
So how do you make sure that you keep an eye on not just your health, but also your financial health, to make sure that you don’t just live longer, but you live well longer.
- Identify Goals & Create a Plan. Like anything, it’s important to write down a plan for your financial goals. It may change over the years, that’s life, but the underlying direction should remain consistent. So always visualize the outcome. Set some essential goals and the prioritize them, which ones are non-negotiable? Which one’s are nice but you could live without. Are you looking to accumulate wealth? Do you want to plan for your children to go to a prestigious college? Do you want to take care of your extended family? Figure out how you’re going to do that, make a plan for it, and, most importantly, execute it. Too often we come across clients who don’t take the planning stages seriously enough, and compromise leads to regret when it’s too late to remedy it.
- Start Out Slow. No-one gets fabulously wealthy overnight, and lottery winners who do, often lose most of it in less than 4 years. That’s because we are all flawed as human beings. Without the discipline to stick to a financial fitness plan, you risk working hard for no reason. So, instead of going full steam ahead and potentially causing more harm than good, ramp up slowly. For example, instead of living like a ramen hermit trying to save 50% of your pay in the first month, start out with just 10%. If you don’t notice much difference and you’re feeling good, save 20% of that the next month, and so on and so on. A great tip is to put that money into a place which is non-liquid, meaning, it’s difficult to withdraw without some serious thought going into it, an example might be to put that money into an index fund, or term deposits.
- Commit to it. Being financially healthy is as much about earning, and saving, as it is about your mental preparation. Be driven and focused. Consider the big picture. Have an investment or retirement plan, maximize your tax deductions. Pay things on time to avoid fees, and, next time your friend asks you to go to Liv Superclub and splurge on a VIP table, think carefully about whether this impacts your future financial freedom.
- Streamline and Optimize. Find ways to automate your savings. Money that is taken out of your paycheck and put directly into an investment, such as a property, or savings account, without you ever touching it means you’re much less likely to miss it. Also, don’t be afraid to look for financial advice from your friendly consultant. They will help you stick to your path and provide you with a measure of accountability. A great tip is to gamify your saving. Set yourself incremental goals and budget for rewards when you meet them! Your financial consultant can help you with that.
- Continually check on your Progress. Financial health is a long term goal. It can take years for investments and savings to pay off. That is why it is important to break that down into bite sized chunks and not just visualize the end goal, but also continually track your progress towards it. Look at your original plan every month, 6 months or every year. How are you tracking against it? Is there anything you need to change? Are your non-negotiable goals still on track? Are you still on track to fulfill your other goals? It’s very important to share this with your partner, are you both on the same page? Studies have shown, accountability from a significant other is the most important indicator on whether you are likely to experience financial freedom or not.
Start your journey towards financial health and freedom today by contacting us at Li & Hungerford Property Associates. We’ll consult with you and help you with the five steps above, connecting you with our network of transparent and safe investment options to achieve your financial goals.