Do you still remember the time when you were trying to learn how
to read and write? You started with the alphabet, right? That is
a form of basic knowledge right there. When we talk about basic
knowledge, it is the first set of information in the process of
learning and discovering new things. In budgeting and saving
money, knowing the basics is also essential and crucial.
Understanding basic financial concepts will help you make better
financial decisions whether it’s about saving, investing,
borrowing, and even more.
Basics of Budgeting and Saving
Let us walk you through the steps of creating a plan for your
personal finances by reading this article.
Let us now begin your journey on being financially literate!
First and foremost, acknowledging the importance of saving money
is important. Keep in mind that this money is the fruit of your
hard work and perseverance that is why you should think more
than twice about how and where to spend it. Some of the reasons
why saving money is an important thing to do: it helps to
protect you from being caught by emergency expenses; it could
also help you with your future expenses and achieve your goals.
Learn the Juan, Two, Three:
1. Needs vs wants. Determining the needs and wants may be hard
at first, but this will help you a lot in being financially
stable. Always consider which are necessities where you should
spend your money. For example, every payday, learn to prioritize
buying the essentials such as food, medicines, transportation
allowance, rent fees, and the like. Next, set aside an amount
for your savings – make this a habit every month. A 10-20% of
your total monthly income could be a good start to put on your
savings. Try to write down your monthly expenses and categorize
them into needs or wants. You can observe that the things that
are listed on wants serve only for temporary convenience, or
pleasures that are not essentials and could be acquired when you
have extra money.
2. Make a budget plan. It is so much easier to monitor your
monthly expenses when you track them. List down all the
expenses, and the total of your savings every month. This will
serve as your monthly guide to help you manage your money along
the way. A budget plan can be adjusted anytime you need to
change or modify your expenses.
Month of April 2021 | |||
Total earning: PHP 15,000 | |||
ITEM | BUDGET | EXPENSES | SAVINGS |
3. Have a SMART financial goal. Knowing the objectives and
purpose of why you are saving could help you to be motivated to
keep going until you reach your financial goal and stability.
Specific: What are the things you want to buy or do in the future? | Example: Wedding |
Measurable: How much is your target savings? | Total: Php 200,000 (Php12,000 - savings per month) |
Attainable: Where your savings would come from? | Salary and Part-time job |
Realistic: Why do you need to save money? | To provide a decent and simple wedding for my partner. |
Time-bound: When do you plan to start saving your money and complete it? Provide exact target date. | Start date: Jun 2021 Completion date: Dec 2022 |
These questions might help you in setting your financial goal: -
What are the things you want to buy in the future? - Why do you
need to save money? - How much is your target savings? - How can
you save money? - When do you plan to start saving your money in
the future?
To complete your financial goal, remember that it must be
Specific, Measurable, Attainable, Realistic, and Time-bound
(SMART).
Saving money may seem to be challenging for a lot of Filipinos
because there are still more than 51M who are unbanked to date,
according to the 2019 BSP Financial Inclusion Survey. This may
be a challenging task to do, but we can always try until we can
fully learn what will work for us. Aside from the Juan, Two,
Threes, there are different ways of saving your hard-earned
money. Choose one that will fit your monthly income and
expenses, and your lifestyle, too.
Open a savings account. Savings accounts are interest-bearing
deposit account that will be held by a bank or any financial
institution. Usually, a savings account has maintaining balance,
though this is a good option if you want to park your cash for a
while and get it anytime for your short-term needs.
Here are the reminders for opening a savings account: - Choose
and go to your preferred bank - Prepare a government-issued ID
(accepted IDs: Postal ID, Passport, Driver’s License, Voter’s
ID, PRC ID, Senior Citizen ID, School ID (for minors), SSS ID) -
Fill out a form - Prepare your desired initial deposit
Use the money saving feature of your e-wallet. There are some
institutions that are not affiliated with banks that also offer
savings features. Here are some:
GSave
– On the GCash app, click the icon ‘Save Money’ – Register your
GSave account, and fill out personal information – A prompt will
show ‘GSave Registration Success’ – You will be redirected to
the GSave dashboard – An SMS will be sent to you from GCash
confirming that you have opened a GSave account
Cebuana Lhuillier Micro Savings
– Go to any branch and fill out the Client Customer Information
File Sheet and bring the following: – 1 government-issued ID –
PHP 50 as an initial deposit – PHP 150 card fee (for clients w/o
24k card), PHP 75 for card upgrade
Digital savings. A digital savings account is a paperless and
fast way of opening an account using a digital platform. This is
the most common account that people are getting themselves into
nowadays because of its convenience and more secure way of
banking. You can access and monitor your account online anytime,
anywhere. These options might be intimidating to you but
don’t worry, in the next article we will learn the different
features of these tools and even how set them up in your
smartphones. To know more about the status of financial
inclusion in the country particularly in the aspect of saving,
check out this Bangko Sentral ng Pilipinas’ Financial Inclusion
Survey thru this link. Links
[https://gflec.org/wp-content/uploads/2015/11/3313-Finlit_Report_FINAL-5.11.16.pdf?x56258](https://gflec.org/wp-content/uploads/2015/11/3313-Finlit_Report_FINAL-5.11.16.pdf?x56258)