My 10 Tips on Financial Management

This blog is one of my Two + 9 Realizations at 29th!

1. Set Financial Goals. We learned from BPI's financial training the importance of writing down and setting a specific timeline for each of our goals that involve finances.
Example: A dream house should be at least 5 years to complete. It is not advisable to exceed more than that. So I completed a worksheet that has our age, target year of completion, goal and the action plan in line to achieve it.

2. Combine salary and all other sources of income. We used to have one account and it messed up our budget from time to time, so we decided to have 3 bank accounts: a joint account, my personal account and my husband's. The joint account is our monthly revolving fund, my account is for our Savings and my husband's is for emergency and travel funds.

3. Save up & Live within your means. It is important to use the money you earned today for the expenses of today. Never borrow from your future salary for what is due today.

4. Create a Budget and Monitor it. The monthly revolving fund (or a monthly budget) gives us a warning signal: stop, wait or go when we buy and pay bills. It is wise to set an amount for your monthly budget. (Ex. 10,000/month). Then train yourself and the family to never go over that.
I have a notebook to monitor our expenditures. I will take a photo of my working budget sheet later.

5. Envelope System.  We try to pay everything online but there are still things that we need to pay in cash. The envelope system is my personal petty cash system. You can visit my instagram @refinedwomanhood for photos and for more details about it.

6. Create Funds for specific goals. Here are some of the funds we are still building up:

• Emergency Fund - My boss' number 1 financial advise given was to have this fund good for 1+years. The many years the better. But you can start with at least a revolving fund good for 3-6 months. 
• Travel Fund - This will determine if we are capable of traveling. 
• Sinking Fund - A fund for a specific short-term goal. We keep this in a jar (Alakansya). We save 5 peso and 10 peso coins. We use this as our instant emergency fund or for buying Christmas gifts. 

7. Buy Insurance Plan. This will save us from poverty in case something really bad happens. This is also our retirement savings for now. Maybe after we pay for our insurance plans we can focus on saving and planning for our retirement. I chose Kaiser through IMG because it's not expensive compared to other insurance providers. It also comes with a Health Insurance good for a lifetime.

8. Open Saving accounts for Children through long-term investments. We planned not to spend a lot of money for birthday celebrations, gadgets, "luho" or items of clothing for our kids. I had a roommate at BYU-Hawaii who developed very well a habit of saving. She shared with me that her mother doubled the amount of money they were able to save in a month and deposited it to their individual bank account. This ignited their excitement for saving. Each of them started to set a monthly target amount to reach their yearly savings goal. I chose COL financial for Zephrine because it's easy to monitor online, reliable and most of all it's cheap.

9. Increase cash inflows (money coming in) and decrease cash outflows (payments). I learned this principle from my Finacial Management classes and from IMG. I am still looking for ways to increase our cash inflows. I guess online selling is one of the most famous ways to do it while at home or working. For now, we are investing slowly through my father-in-law's farm.
We cut our expenses by keeping our bills at certain levels/amount (ex. electric, gas, house rent and etc.) I can write a whole blog about this. But the main point is to get as much discount as you can. It's more fun to pay less than the original price.

10. Share your blessings by giving back. We give back through paying our tithings and generous fast offerings. We started paying them through BPI online and it's so much more convenient for us. I think another way we do it is when we celebrate our birthdays by choosing a group of people we would like to share our blessings with for each year. We are still not capable of putting up a big party. We can also give back by helping those in need and even the strangers around us.


BONUS TIPS. The tips take time to be perfectly part of our daily routines. I am still in the process as well.  Sometimes I disobey number 4  because of laziness and busyness but as they said, the way to perfection is constant and diligent practice.