Investing in the far off future is a difficult concept to grasp for many, since it’s hard enough to pay current bills. But here are a few ideas on how to get started.
A portion of your income. Investing in the far off future is a difficult concept to grasp for many Filipinos (this writer included), since it’s hard enough to pay current bills. In the household of Melissa Ramos, a freelance editor and mom, “A portion of our income is already earmarked for insurance payments. So whatever is left over from that amount, that's the money we work with for our day-to-day spending.”
Mark your calendar. Practice self-discipline. For Lizza Gutierrez, an art director who got her financials in order after a hospitalization served as a wake-up call, investing in a retirement fund became top priority. “I pay a quarterly premium, and the payment dates are marked in my calendar so I make sure to save up enough money for this. There are times when I have to say no to my wants; it’s not easy, but I have to sacrifice and practice self-discipline.”
It all adds up. Reynold Gan, head of a top insurance firm offers the following saving tips: “Be conscious about your expenses. List down all the money you spend on a daily basis. You will be surprised how much money goes to needless things, like P100 coffees or P200 taxi rides when the MRT will suffice. The savings made from consciously cutting down on needless expenses can now be directed toward the retirement fund.”
Settle debts. Joey Lacson, a self-employed speech and language pathologist, who started investing for his retirement when he was just starting his career, stresses that one must settle all outstanding debts, and prioritize those with high interest rates, before investing. “Then, try to set aside 10 to 20% of your gross for investment. I myself tend to fall short of this at times as expenses always seem to pop up out of nowhere—house repairs, karate lessons and tournaments for the kids, staff loans—but this [percentage] is what I aim for.”
Make it automatic. Easier said than done, right? If you want to sit back and watch your retirement account grow automatically, Gan advises, “For people who have difficulty saving and investing consciously, some companies offer tie-ups with credit cards and banks wherein the client can enroll his/her retirement account to a credit card or bank account, and the contributions can be charged to the card or deducted automatically from the account. Saving P1,000 or P2,000 a month for retirement is comfortable for employees earning P15,000 a month. This is just equal to a night out with friends or a pair of shoes.” With some planning and discipline, you can start securing your future now.
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