Save, Invest, Spend

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Imagine this. You got your first paycheck in your new job in your hand. Of course let say you left you last job about 6 months ago and you struggled looking for this new one, how or what would you do with your very first fruits of your hard labor again?

It is common for Pinoys to celebrate. In offices they call it “padugo” , others call it “pabuenas”, and others simple call it “palibre”. But a few others will use it to pay their debt(yup 6 months of no work and your “utang” will pile up). And a few others would be to give it to their parents as at least help with the household expenses for the 6 months you were under their roof. It is hard to not have a job and be bum for so long. At first its okay since you tell yourself and others that you need a break. But as time rolls and as your savings dwindle you feel powerless.

The common Pinoy employee is not a saver but more of a spender. They would even look you with a bulging eye and tell you ” impossible akong mag-ipon sa kakapirangot kong suweldo.” But funny it is how come there are lots of Pinoy employees who sport their wide-screen smartphones with their stylish headsets/earphones and say they don’t have savings at all. Funny that when payday comes it is easy to go out and have a party all night long. And even more funny that they go shopping till they maxed out their credit card.

Lots of Pinoy have no savings and they blame that they have small salary but truth is as the saying goes “your spending is directly proportional to your salary”. That means no matter how small or big is your salary your spending will be as big as it is depending on your lifestyle. Often when Pinoys have increase their expenses also increase. Thus when once they just eat at the “turo-turo” because that is all they can afford now they eat lunch at a fast food chain on a daily basis since they can afford it now. And since they have bigger salary now, they go to their favorite mobile carrier and check out their latest postpaid plans and the phone that comes with it. Even if they don’t really need that much data or airtime they would get a higher plan just to get the good-looking smart phone.

Awhile ago I read in a newspaper that the Pinoys are now aware of the s called stock market and little by little young Pinoys are asking where to invest and how to invest. Overseas Pinoy workers are now asking what are good investment opportunities while they are working hard in other countries so that someday they get to go back home and enjoy the results of that long hard years working in another country far from love ones. But at the same time it is sad that still a very small portion of the Philippine population are investing in their own country. With that I thank all financial literacy and financial freedom advocates who continue to educate and guide the public about investment opportunities in the Philippines.

You might ask why SAVE, INVEST, SPEND?

As I have already mentioned many times I believe in the maxim “You can’t give what you don’t have.” That is why the very first step would always be to save. Saving should be a habit that one must practice no matter how small one can stash aside as savings. The more one should save when there is a chance to like having a bonus, having a salary raised, and having extra income from sidelines or part-time job or small business. Save as much as you can while you are young but at the same time make sure that you support your day-to-day needs in a simple life. If you save but to the point that you forget the needs of your physical body then it is pointless to save. Make sure that your needs are meet when you planned to save.

When you now have something now you can invest. As in my previous post I told a friend to make an inventory of all that you have and you owe. From their you can check if you truly have something extra to invest. People are sometimes just carried away with the beautiful idea of having stock shares under their name even in reality they are technically broke. They have debts to pay that have high interest, they have some needs to address but put aside since investing becomes priority because that is what is in, or simple they want to invest since they want to brag to their high school classmates that they are stockholders of Philippines companies. As you remember, our number one rule is to invest only your free cash. That is why before investing anything you first need to set up your emergency fund(which is preferably about 6 months of your salary or 6 months of your basic needs and monthly payments to make if you have some). We are encouraged to invest to fight inflation because saving is not enough. As time passes by the value fo your currency today will be lower in the coming years depending on how big inflation has gone.

Now why SPEND? Maybe you think it is to reward yourself for managing your finances well. Yes that is a part of it but I encourage you to spend after you save and invest so that you can help the Philippine economy growing and maintaining that good GDP growth. Spending is needed as much as we need to save to keep things going. Remember that retailers need money to buy their raw ingredients and labor to have another batch to sell. The more business grows the more people get employed and stay employed and the more they have chances to save and hopefully invest back in the country. I the street lingo “Para sa ekonomiya.” The Philippines enjoys such economic growth though it really hasn’t trickled yet to the lower classes of the society because we need more jobs for them to feed themselves and give them dignity of able to provide for themselves.  Philippines  young population also is the reason and with that comes spending opportunities but with that let us teach the young Pinoys to spend wisely. Let’s learn from the mistakes of other nations who have now gone bankrupt. It is okay to spend as long as it is within one’s budget and capacity and at the same time savings are set aside for future emergencies and if they have enough free cash to invest that is a lot better since such public funds invested in the economy will help it going and hopefully in the end the poor wouldn’t be dependent to government or NGO aid but rather from their very own hard work. When that happens then we as a nation has brought back the dignity to each Juan and Juana.

Remember: SAVE, INVEST, SPEND