Are you set-up for financial success for 2023?
By Claudine Villareal
(Philippine-based)
(Continued from Page 2)
Now, if you can stack up a year’s worth of salary, that would be excellent. During the pandemic, unemployment in the Philippines increased dramatically and persisted for over six months—in some cases, for over a year. It's best to have more than to be caught off guard by life.
Having an emergency fund teaches you the discipline needed to amass future wealth. Since everyone has an emotional attachment to money, discipline is necessary. When was the last time you made an impulsive purchase?
When was the last time you bought something and never really used it, and now it's accumulating dust?
How about this: when was the last time your fund went low, and you felt emotionally stressed?
When was the last time you and your partner had an argument because of money?
Can money make you feel depressed?
How about empowered?
See what I mean? We need to comprehend how money impacts us emotionally, how we respond to it, and how it influences us. Understanding ourselves can provide us with the knowledge we need to be self-disciplined to reach our first million.
Let me tell you a story to illustrate this better. I had a conversation with someone. This person approached me for help since she saw no progress in her finances. So I asked her about her savings, and she said, "No, I'm not saving up." I asked her, "Why?" She stated that she feels obligated to help her friends and relatives back home if she has the money. She can’t handle the pressure since she can’t say no to them. So her emotional response to the situation is not to accumulate money. At least when someone asked for help, she could honestly say, "I don’t have the money to help."
Finally, more than anything else, developing an emergency fund requires you to adopt the proper attitude. You'll become more conscious of how much you are actually spending against how much you are making as you painstakingly build your EF. At this phase, you’ll be more accountable for where your money goes since you have a target amount in mind. It's important to have the ability to keep track of your income, expenses, and budget. A ship can eventually capsize from a little leak.
Set up your lifebuoy
We are working hard for ourselves and our families. We make whatever sacrifice we can for them. Yet how frequently have you seen or read about people setting up donation drives to aid the sick? Simple health or medical insurance could have helped to prevent this unfortunate situation.
Make sure you speak with someone who can assist you in getting insurance if you already have the means to support yourself. You simply cannot afford to go without one; if you are in the hospital for a few days for a few procedures, the cost of your hospital stay will outweigh the cost of your insurance premium. As of this writing, the inflation rate in the Philippines is at 8%, and did you know that medical inflation is always higher than general inflation?
No one knows what can happen in the future. One of the big lessons brought by the pandemic is that everyone’s life is fragile. Whether you are young or old, rich or poor, it doesn’t matter. Your life can be taken from you at any time. We should accept this as a fact, and you need to set up your financial buoy proactively. Rep. Salceda said during one of his interviews that "Filipinos are just one sickness away from poverty." That is sad, but yes, that is true. It’s the unpreparedness that will knock us out.
Think about this: if you are the breadwinner of the family, you are the asset of your household; your contribution to your household income is the chunk. If all of a sudden, life throws you a curveball, you get critically ill, and you don’t have health insurance, who would replace the income that’s now gone since you’ve been ill? You've gone from being an asset to a liability to your family. The family is now hurting emotionally and financially. Serious sickness can sink your entire family into bankruptcy. So why take this chance when you can set aside a small portion of your income and get yourself an income replacement in the form of health insurance?
Once you have your emergency fund and health insurance in place, you are now good. You’ve built a solid foundation. You can worry less because you’ve set up the necessary steps to take care of the worst-case scenarios. This should prime you to be ready to take opportunities along the way. Now it’s time to jump to the second phase, the creation of an investment portfolio.
Contact Details:
Claudine Villareal
AFP
Email: claudinemanzvillareal@gmail.com
Cellphone: +63 917 3147 457
Facebook: ClaudeVillareal01
https://www.facebook.com /claude.villareal.16