The only rule I follow in budgeting

Adulting is hard. Let’s face it. We were never taught how to live life when we get out of our ermat’s homes. But for filipinos, we aren’t really expected to leave. Because even if we marry, often times we still live with our parents. I would live with my mom and dad when i get kids. That is why when we DO get out, our finances sometimes go out of hand. Let me know if this applies to you.

So, the only rule i follow in budgeting is 50-40-10.

50% goes to savings

Yes, 50% goes to my savings. And i have another passbook account, same bank account as my primary account. And i thought it was ridiculous to open another account for another purpose. But it’s the best decision ever. When my salary comes, i immediately transfer it to my passbook account.

You know what’s the best thing about it? You don’t get to feel that YOU still have funds left. Note that i opted to not have an ATM card so that i won’t be tempted to withdraw funds from it. So far wala pa baya sad. We always regularly check our primary account, right? So when i deposit 50% of my salary to my other account, what’s left in my primary account is only the amount i can spend for the month.

If you plan to have your savings built, open a separate account today. It works.

My philosophy really is to pay myself first. I am young, but then if you don’t start today, no matter how big your salary becomes in the future, and you haven’t built the habit to save today on a small salary, do you think you will be able to on a much bigger salary?

Excuses like you don’t have enough for savings are excuses. I think that it doesn’t matter how much you put into this category, what matters is that you put something into this category. Open another account and put 10% of your income in it every month. You know, Bo Sanchez has this book: the turtle always wins.

I once talked with a friend who was so kuripot, and was keen on saving – like every filipino. But when she asked me what was she saving up for in the first place, i thought there are a lot of things to save up for: Retirement, Emergency Fund, Opportunity Fund, Business Fund, Investment Fund, when you get kids, you need a College Fund. The list is very long.

What is an opportunity fund? Like for example, you find. a really good piece of land, but you don’t have money for downpayment, that is an opportunity lost. Matod pa sa The richest man in babylon, the Godess of Good Luck favors the man in action.

But the primary reason i am saving up now, is to build up my emergency fund and investment fund. I am already done with my emergency fund, and it is within my passbook. But the excess funds i place in my passbook account, i transfer to my investment fund.

40% goes to needs / expenses

10% goes to me

Which goes to gym, dine outs, date nights, cinema.

It’s alright to be cool. But i think it’s time we look at having savings as cooler.

Remember to create reasonable and SMART goals though. Based on what you earn and on your personal rule. So if you prioritize your future first, your goals, of course you’ll get there sooner. If not, it’s okay – the turtle always wins.