My fiancée posted in her blog, Moneylifeblood, an interview of Suze Orman. Suze was in the Philippines for the second time and she has a guest appearance in Karen Davila’s show. You can check out the video and the key notes my fiancée listed from this interview by clicking here.
After watching the video twice(yes and from time to time I still watch it because of the great lessons this 40 minutes of interview has) I told my fiance while chatting over Facebook that I see myself there talking. If you have been reading my blog specially my debt-free series you might have already read what Suze said. It is kinda uplifting that Suze like me has the same take on handling finances. And with this I would like to bring it to you again those things just like as Suze pointed out in this show. Since that 40 minutes of interview is full of great lessons I would be focusing on major points only and will be breaking this into several post in this blog.
The first topic will be about why Pinoys have no savings.
In the interview Suze said that when she comes to Pinoys she meets,whether in the studios or in the streets, she ask them if they have savings and they would answer they don’t have.The fact is Pinoys have this culture of spending and the worse part is we don’t just spend but we spend in excess. Some may call it impulsive buying while others to give it a softer impact they are buying at a bargain thus they tend to buy in excess.Buying extra is not bad at all, it actually depends on the purpose and what you buy(check my post on this topic by clicking here to learn more).
Also with that many look at savings as money to spend.
Often times when you get to save money the very first thought that come to your mind is the latest gadget, clothes, shoes, bags, or movie you wanted to get. Our minds are actually programmed to not to save and spend any savings to those wants we never get a hand when back before we don’t have the money to buy it. We have made an auto-reminder when we see savings that back then we wanted this and thus when we see free money we can now get it.
One thing also is that we have this scarcity mentality. It is one of the greatest marketing tool sellers employ. You would always see this in all shopping malls, in all stores, and even online. They promote items then you get a discount but only if you buy within the next hour or so or a mall wide sale until midnight etc. Most Pinoys would jump into this even they don’t have the money and thus end up buying on credit just to avail of the limited offers even if they really don’t need such.
So with all that, how much should we be saving in order to achieve financial freedom?
Well I really can’t tell you how much because I don’t know how much debt you are in or how much are your needs but as Suze said start at 10% minimum right away. Did you catch that line? Besides saving 10% you got to set aside 10% first before spending. The key to really saving is setting savings first and whatever is left work on it and not the other way around. That way you won’t see anything left to be spent on unnecessary things that ends up in the trash anyways.
Make it a habit to set aside 10% first from whatever earnings you get so that you won’t see excess money which your mind automatically see as money to spend.