These moneysaving strategies have been proven to work the world over. But not a lot of Filipinos are applying these in their budgeting and spending habits.
There are countless reasons you cannot keep a single centavo from going into a purchase. Lifestyle upgrades, living in the moment, and crippling debts are just some of them. Or maybe you set aside a portion of your money today and spend it tomorrow? Talk about being consistently inconsistent.
The truth is that a lot of us know for a fact that saving is an essential for survival, but, really, only a few people put their money where their mouth is.
If you are a novice at the art of saving money, here are some methods you might want to try to start building your wealth for the long term.
Pareto Principle: The 80-20 Rule
Dubbed as “The Balanced Money Formula,” the 80-20 Rule on money is the slow and sure way to save without compromising too much of your lifestyle.
20% of your net income goes to savings
80% goes to expenses (50% on needs and 30% on wants)
*If you have a P20,000 net income, for instance, you can spend P16,000 and save P4,000.
365 Days Peso Challenge
Take the guesswork out of saving. For this one, all you’ll need is a calendar and a reminder. This concept is pretty simple: save the amount depending on the nth number of day you’re on, and get realistic results.
Day 1 = P1 peso
Day 2 = P2 pesos
Day 3 = P3 pesos
Day 4 = P4 pesos
Day 5 = P5 pesos
…and so on
*1+2+3+4+ = …365 days will get you a total amount of P66,795 at the end of the year.
The budgeting method that best suits millennials. Not only does it cover spending and saving, it also makes room for debts and loans.
70% goes to cost of living
20% goes to savings (10% for retirement/insurance; 5% emergency fund; 5% for travel goals/tech purchases)
12-Month Saving Challenge
In this saving method, you gradually taking a percentage off your monthly net income starting from one percent. This way, you can start saving even a small amount and adjust your expenses and lifestyle accordingly.
January 1% x P25,000 = P250
February 2% x P25,000 = P500
March 3% x P25,000 = P750
April 4% x P25,000 = P1,000
May 5% x P25,000 = P1,250
June 6% x P25,000 = P1,500
July 7% x P25,000 = P1,750
August 8% x P25,000 = P2,000
September 9% x P25,000 = P2,250
October 10% x P25,000 = P2,500
November 11% x P25,000 = 2,750
December 12% x P25,000 = P3,000
Li Ka-Shing’s Secret Formula to Wealth
Imagine how a school dropout turned himself into the richest man in Asia. Li Ka-Shing shares his technique using the power of five allocations covering both saving and growing money.
30% on living expenses
20% on expanding your network
15% on investing in yourself and learning (buying books, attending seminars etc.)
10% on travel