I have been unemployed for almost two months now and I am quite proud that I have kept myself afloat in terms of my personal needs because I have saved money, thank heavens!
I repeat, personal needs; because of course I still have unlimited access to food, water, electricity, and a free roof over my head courtesy of my parents. Again, thank heavens!
I am no expert in financial matters, in fact I am so bad in Math I panic when there is no calculator around. Fortunately for me, almost half a year prior to my resignation, I came across a book (literally came across, because I found it lying on a shoe rack at home) entitled My Maid Invests in the Stock Market by preacher/entrepreneur Bo Sanchez and that book literally changed my perception on money.
On that hot afternoon weekend, God must have made me find that very slim pocketbook to make me realize a lot of things. Firstly, He must have said; “Hey Peng! You’re in your mid-20’s, what is that you are doing?!” Secondly, “You are to live abundantly in your old years, but you have to prepare for it“. Or something like that.
That particular book taught me the importance of keeping a portion of my money for emergencies or for long-term investment. Also, I learned that it is never too early to start a retirement fund, though there is such thing as too late. And from the moment I’m done reading, I made a promise to myself to take money matters more seriously from that day on. Let me share the life-changing acts I did to save my face from having to ask money from my parents in this not-so-young age.
- SAVINGS, TITHE, BILLS FIRST, expenses second
When I was still a nurse, my take-home pay monthly is roughly Php 8,000 because I have loans and taxes of course, though I wish I can skip those. I usually had no plans whatsoever on how to spend my money: I just pay my due bills, eat out, buy clothes, and before I knew it, the next payday is one more week away and I have no money left. So I will borrow from my mother and the cycle will repeat come next month. Basically, I was one of those who live from paycheck to paycheck, with loans and no savings!
That book was really heaven sent as I learned that upon receiving the paycheck, savings, tithe and bills must be settled first and the remaining amount is the budget for the personal expenses. I remember having to sit for a couple of minutes and formulate a plan to spend my salary wisely, much like when I plan before writing. It usually goes like this…
|Php 8,000||Take-home pay|
|MINUS||Php 1,000||Internet bill|
|Php 1,000||Church contribution|
|Php 4,000||Personal Expenses|
My personal expenses budget therefore was Php 4,000 for 30 days. Yes, its surprisingly and heartbreakingly small but I extremely wanted to save so I did the unthinkable: I brought packed lunches, used the cheapest transportation, and kept track of every single peso leaving my wallet. It’s hard at first, but very fulfilling and grown up.
Disclaimer: You may have noticed that my “savings” allocation was not specified, and this is a mortal sin in budgeting. I didn’t know this when I started. After some time, I learned to do better money allocation and found a budget that works for me. (See related story below)
List all expenses down
To keep track of my money, I listed all my purchases no matter how small: street food merienda for Php 34, new phone tempered glass for Php 100, and even parking fee for Php 40. It looks really, really stupid, but very responsible at the same time. Some people use Excel spreadsheets to track their money, but I’m a bit of a 90’s kid, so I used index card and pen. I mean the concept is still the same so don’t judge me.
[Related Story: How Budgeting Money Improves My Life Every Day]
Plan for retirement
As I have said, it is never too early to retire, but it can be too late. I actually plan to retire by 40 years old. I’m serious! I’ll do that by nursing my investment in the stock market. A portion of what I have saved for the past year went to this venture while I still kept some for my wants/emergencies/travel needs.
I also had doubts of entering the stock market because this is one topic that was not taught in school and so sounds too intimidating. After my encounter with Bo Sanchez’s book, I attended seminars, read blogs and other related literature on investing. I still consider myself a newbie until now, but I believe I don’t need to be an expert in long-term investment.
A lot of people lose money in the stock market because they trade, meaning buy and sell in very little intervals depending on the movement of the prices; those people are short term investors. They take risks and are available all day to monitor how their stocks are doing. I, on the other hand, am a long-term investor, I just put my money in companies I believe will still be standing once I am 40 years old and then sleep peacefully at night. Come next month or when I have enough money to invest again, I will invest again on the same company or maybe one or two more strong companies, and wait for the next month. I do this irregardless of the price of the stock: this technique is called Peso-Cost Averaging. I do not particularly care if the market is down, because in 20 years, the companies are still afloat and centavos will not matter.
One does not have to be rich to start investing, I started with Php 5,000 and just added money whenever I can. For example when I received a bonus or I saved more than I have to.
I’m so excited to see how much my money will be for my retirement! It was really wonderful knowing that my future self will thank me for this. I plan to seek other investment options in the near future,but that would require another blog post. For now, I’ll just keep on supporting myself. I’m proud to have paid for necessary things such as throwing a resignation party (extremely necessary), new clothes for job-hunting, eyeglasses, car expenses, etc while I am 100% jobless and in peace.