As a young boy, my parents
taught me well on the importance of every centavo. They would always say,
“It’s not easy to earn a living.” True enough, although most people would tend
to deny it but the fact would forever be the same, money is important and it’s
not easily gained.
Being proud of my Chinese
bloodline, I always believe that it is innate for us to be thrifty with our
expenses. At first it was very easy to claim, however it’s very hard to put
into action.
Just last year, I was able to
attend a short learning snippet entitled, “Understanding your Personal
Finance.” The title itself was very catchy that during the session my ears,
heart and mind were very attentive to every word the facilitator was saying. My
knowledge on finance is very limited as I have no commerce background yet my
practice on saving and controlled spending was already in placed (sometimes
hehe). Accordingly managing finances does not only involve earning and
budgeting alone but involves a systematized process of dealing with your
earning, doing your budget, giving time to save and wisely spending every
allotment.
Now how do we manage our personal finance? Like any seminar
we attend APA would always be the answer – Assess, Plan then Act. Most of us dream
or envisions of managing their own finances, plans out how he/she may execute
their plan but tends to fail out on the part where you start implementing.
Personal Finance is the discipline of being able to manage
your financial well-being. When we say well-being we mean mental capacity of
managing our own finances. We start assessing the different types of financial
managers. Accordingly, there are four (4) common types of financial managers:
the 15/30 survivor, the great pretender, the uninformed and the master.
THE 15-30 SURVIVOR is the type of manager is has
enough finances to survive till the 15th and 30th of
every month or in short during pay days! The 15-30 survivor has no extra cash
for savings and no extra for responding to emergency cases involving the need
to produce money.
What is good about the 15-30 survivor is that
he/she is capable of surviving till the next pay date. However, if there would
be a delay in the release of salaries for sure there would surely be crisis.
THE GREAT PRETENDER is a very dangerous type of
financial manager, the great pretender is someone who overspends to maintain
his/her lifestyle. A great pretender lives beyond their means. From the title
alone, they pretend to project someone whom their not. Most Filipinos do this
just so they could hide their real state in life. But remember, it’s best to be
comfortable of being just ourselves rather than trying to please the world. No
worries! There is still hope! Awareness and acceptance are the key elements in
order for us to shift paradigms.
THE UNINFORMED manager is someone who has extra
funds but you do not know where to put it. (do you want me to give you my
account number for safe keeping? ) They are usually the people who are
fond of depositing their moneys in the bank and not investing it on other
things. Remember, you really do not earn in banks, the value of your money
depreciates every year.
THE MASTER manager is the one who
has the capacity
to Earn, Save, Invest and Spend.
In that learning session we were first asked to
identify which type of manager we were at present and what type of managers we
would like to become. We were asked to write it down on paper our goal in
managing our finances. We were even asked to place a feasible date so we may
measure our progress. Try doing it yourself, it’s quite fun!
“I am Jerrick and I want to be a Master Manager by January of 2016 with
a savings of 3, 000, 000.00 in my bank.”
After deciding, I invite you to write down your FINANCIAL
GOAL and post it somewhere visible that you can see every day.
We were introduced with tools to help us achieve
and do financial management such as a Statement of Cash Flow Tool and a Personal Finance Statement
Tool. I understand there are many
free samples of these in the web.
REMEMBER:
1.
Every
centavo counts!
2.
Control
in buying things you do not need. Always ask yourself, “Do I need this?”
3. Buy
things you need in bulk to avail bulk discounts.
4. Apply the 70-20-10 principle
Accordingly,
once we receive our hard-earned money we divide it:
70% of your money you spend
20% goes to savings
10% goes to Tithes
Confession: From the time I attended
this session, I did my best to apply these principles on how I manage my
finances. It is very hard and most of the times I still tend to go back to my
old ways but since I am determined I am able to pull myself through. I still
have a long way to walk but I am glad that I have greatly improved from my
previous self. I am proud to say, I am a practicing Financial Manager!
