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Money is a daily essential, necessary for survival and keeping up with standards of living. Every little action, decision, and purchase a person makes – has monetary value attached to it.

There are all sorts of anecdotes you can find on the internet, self-help books, or financial advice columns that point out to one thing; the virtue of Frugality delivers a long-term benefit to those who practice this habit.

Like they say, the rich man is quite often frugal because he understands the power of restraint, meanwhile, a poor man tends to lack discipline when it comes to finances because he seeks self-gratifying pleasure in spending.

Why is it important to save money?

In life, every person encounters a width of opportunities and problems, which must be prepared for.

As earning individuals, living from paycheck to paycheck, it is imperative to always improve the standards of financial literacy. Financial literacy deals so much with the discipline of restraint. Just the mere effort of thinking twice or thrice before spending on an impulsive purchase can save you money, and develop financial discipline in the long run.

Going back to the point above, here are some problems and opportunities you might encounter you’d be thankful you’ve saved money for.

1. Emergencies.

As an unpredictable problem, emergencies can manifest in all sorts of ways, be it as a worker losing his job or a sudden health issue within the family, medical and utility bills can be a daunting task to pay off. This is why establishing an emergency fund while you’re earning is essential for survival and averting debt.

2. Retirement.

Individuals who have started saving early for retirement have been reported to lead happier lives, with improved quality of living.

Saving up for retirement can be arranged with the help of your employer and your bank. There are retirement terms where each month is counted and compounded, so by the time retirement comes, you’ll have money to spend and invest.

Feeding a retirement fund is a positive opportunity where you can ask how much your present self is willing to give to your future self.

Also Read: PERA: How to Invest in Personal Equity & Retirement Account

3. Education.

Education presents itself as an opportunity for acquiring knowledge and getting acquainted with practitioners and professionals. Education allows yourself, or your children to get mentored and be surrounded by great people.

Being in the company of experts, a person can ask all questions, and volunteer for assignments.

As an investment, make the most of your money and tuition by forming professional relationships inside your university.

As an opportunity to save money, granted that you have the prerequisite skills and personality of an excellent pupil, apply for a scholarship and make the most of your stay in school.

A referral made by a professor can bring you places, forming friendships with children of business practitioners can also be fruitful in the long run.

4. Major investments.

Whether you’re thinking of buying a new car, finally settling down and buying a house, starting your own business (or franchise one), or whatever else you’re looking to spend a significant amount of money, you’re most likely going to need to save up to be able to afford it without wiping out all your current assets.

Opportunities for major investments only knock once. You’d be thankful you stopped yourself from spending your hard earned money on things that don’t return much.

When stock prices and cryptocurrency prices drop, it’s an opportunity to buy in. Think of all the opportunities an average person would miss because they didn’t start an investment expenditure fund.

There’s a saying, that in order to earn more, one must spend. With this saying, balance must always be maintained. When investing in a business, a property, or a capital expenditure pool, always bear in mind how much gains and losses you will be incurring.

Some businesses and investments fail because there are people who take losses for granted. They keep eyeing on gains.

In a nutshell, this is how financially literate people prepare for problems and opportunities:

Always have an emergency fund

Start a retirement fund

Identify opportunities within Education and make the most out of it

Start an investment fund, so you can spend on investments and earn more.

Read Next: 100+ Profitable Small Business Ideas in the Philippines

How much money should I save each month?

The short and simple answer: At least 20% of your monthly income should go to savings.

That’s the rule of thumb when it comes to setting aside a portion of your earnings per month. It’s based on the “50/30/20 rule” for spending and saving by U.S. Senator and Harvard bankruptcy expert Elizabeth Warren.

However, this one-size-fits-all approach may not work for everyone, as each person has unique goals, financial situation, and priorities.

You might find this other approach more suitable: determining how much to save monthly based on your financial goals. Taking these goals in mind, here’s how much you should save to reach them within your target timeline.

Goals How Much to Save Monthly Building an emergency fund Depends on how much you can save within a year to cover six to 12 months’ worth of your living expenses Retirement 10% to 15% of your income Short-term and medium-term goals (e.g., travel, wedding, car purchase, etc.) Set your target savings amount and deadline.Divide the amount by the number of months remaining before the deadline.The resulting amount is what you’ll need to save every month to meet your goal.

20 Money Saving Tips

The art of saving money can make or break your financial defenses. The difference between the quality of lives of an impulsive spender and a frugal saver is staggering.

Attaining, improving and maintaining the standards of living is one of the many rewards a frugal saver can enjoy. Debilitating debt, failed friendships and job instability are among what a chronically impulsive spender suffers from.

One of them knows the value of restraint. One of them asks twice before buying.

Below is a list of suggestions on how you can perfect the discipline of saving money.

1. Setting up your monthly financial goals

Goals are defined to be the objectives and desired results of a person’s ambition and effort. Take this time to reflect and think of the quality of financial goals you are setting upon yourself and your family. Ask yourself, “will this goal have a lasting effect on my life?”.

A month is made up of 4 weeks or 30 days. Now, look at your monthly paycheck and count your salary by the day, ask yourself, “how many of my paid days would this purchase take? Is it worth it?”, “how many of my paid workweeks is worth this purchase?”

Instead of counting your salary in units of digits commas and kind of currency, look at your salary in terms of time you have exerted working. This way, you can accurately identify the value of every working day.

By asking yourself, how much of myself, how much time in my existence have I worked for? You will think twice about giving up your restraint on spending. You will also be able to prioritize and find goals and objectives worth paying in terms of your time for.

By enhancing the questions you ask yourself before you initiate a purchase, you become more financially behaved.

And by now, you will have a clear-cut view of the bigger picture on how to perceive and what goals are worth pursuing, let’s..

Also read: Top Digital and Cashless E-Payment Systems in the Philippines

2. Start establishing your monthly budget

As this digital column has discussed earlier, you need emergency, investment and retirement funds. Also, now that you have known the worth of your salary in terms of time, this is the part where your funds get rationed.

Now that you’ve split your money into portions, treat it like you’ve put it in an indestructible piggy bank. Always stick to the purpose of each fund. Don’t hesitate to spend on necessities and utilities.

If you’re craving to go out for a movie, think of all the additional expenses that comes along a trip to the mall, ask yourself, is that part of the budget?

Now that we’ve established your monthly budget let’s start…

Related: 15 Budgeting Tips: How to Budget your Money

3. Cutting costs

The most straightforward way to cutting costs is to identify which purchases are avoidable. People incur unnecessary expenses when it comes to leisure.

Let’s say, a trip to the mall can cost you transportation and the rest of the trip could be a magnet for other miscellaneous expenses. The amount of distraction a mall can give will disorient your financial sensibilities.

Avoid going to the mall unless you’ve got to visit the hardware store or drugstore for home repairs and restocking medicine, respectively.

You can cut costs with some of your necessities as well. For example, a cup of coffee shouldn’t cost you $5. Skip the artisan grounds and stick to grocery powdered coffee.

If you fancy having dinner at a restaurant, learn some life skills and cook. Cooking at home costs less than dining out. The internet is full of demonstrations and recipes. Imagine the amount of culinary creativity you could learn from youtube.

Limiting your wardrobe can also help cut costs. With only a few essential clothes, you’re cutting down laundry expenses.

Going green when it comes to transportation, such as opting to walk as much as you can or ride a bicycle to school or work can save you enormous money.

You won’t have to pay for gas or spend as much for parking fees. Riding a bicycle or walking are also a good way of keeping fit.

Now that you’ve adjusted your lifestyle, you’re becoming more and more of a frugal saver, so it’s time to…

4. Automate your savings

Automating your savings would definitely reinforce your indestructible piggy bank, as mentioned in item number 2.

Setting up an automatic transfer ensures that your essential funds are fed every month with due diligence, with the help of your bank.

Check out: Best Savings Accounts from the Top Banks in the Philippines

5. Plan out major expenses

Personal major expenses usually occur during Christmas season and Easter. With all the festivities and gift giving going on, malls and stores will dish out sweet deals on appliances and other items.

This could be a very enticing, tempting time to spend. Don’t forget to be vigilant and always ask yourself twice before giving in. Allow yourself to process if a purchase would put a dent or a hole in your wallet.

Holidays and vacations are also major expenses at this point, especially if you’re spending time abroad. Always find good deals on lodging and airfares, as these two factors contribute the most when it comes to holiday expenses.

Thankfully, there are apps on Android that can help you find cheap flights and hotels such as

Skyscanner – all flights – This app allows you to compare flight rates from almost all airlines, including low cost ones. The app also features a function where you can share your flight details to your family and friends so you can coordinate your reunions and get togethers with ease.

Hipmunk hotel and flight search – includes a special filter called “agony”. The “agony” filter displays the duration of a flight. Not only does this app book you the cheapest flights, it also gives its customers the consideration of showing which flights are the least agonizing.

With bargain flights and hotel accomodation taken care of, you could continue being frugal in another country.

Now that you’ve extended your frugality overseas let’s try…

Traveling abroad? Also read: 79 Visa-Free Countries for Philippine Passport Holders

6. Taking on financial challenges

Financial challenges are meant to make saving money in a fun and clever way. Take for example, in the Philippines; a financial challenge has gone viral.

The challenge is simple; Filipinos stash away their 50 Peso bills (96 US cents) unconditionally, never to be used to purchase absolutely anything. Some Filipinos have saved up to PHP 14,000 (USD 268) in 6-8 months with this challenge (like our editor):

Also, another financial challenge is to uphold the 30-day rule. As discussed earlier in this column, count the value of your money through time exerted working.

The 30-day rule is simple: if you want something, restrain yourself from purchasing the said object for 30 days. Once the 30 days have passed, ask yourself if you still want it.

7. Give up expensive habits

In principle, anything that you take in excess becomes inevitably expensive. Giving up beer, alcohol and drinking more water will save you money. Swapping sodas for water saves you money.

In all essence, water saves you money. Cigarette smoking is a tough habit to quit, but the savings you rack up from abstaining makes up for all the agony.

The habit of watching a movie again and again in a movie theatre can also be an expensive habit.

Spending enormous amounts of time and money beating a game in the arcades is also expensive, just watch youtube playthroughs and walkthroughs to get your fix without having to spend so much on the arcade.

Throwing parties too much to the point of renting out bars and venues, may be gratifying for the social butterfly, but this can take a toll on your finances, opt to have intimate potluck get-togethers with a select few of your closest friends and family instead.

Avoid cheat days as much as possible. Cheat days such as all-night pizza binges may be a comforting idea for a stressed-out worker, but this comes out as an unnecessary, avoidable expense.

Recommended Reading: How to Become Rich: 12 Expert Tips on Wealth Creation

8. Make the best out of coupons

Making the most out of coupons can save you money in the forms of rebates and discounts. There are websites such as coupons.com that offer printable coupons for your next purchase.

9. Never save your credit card details on your smartphone or computer

Online shopping will tempt or even trick you into buying something you don’t usually need.

One way to alleviate bad financial decisions is to delete your credit card details on your computer and smartphone so that there’s no way the autofill would secure the purchase.

Related: How to get a credit card in the Philippines

10. Never go grocery shopping hungry

Grocery shopping should be a breeze to the frugal shopper. The frugal shopper sticks to the list. However, things can get a little complicated if you go grocery shopping on an empty stomach.

The body would trick the mind into buying more stuff you don’t need. One way to solve this and save money is to eat first before going shopping.

Also Read: How to Manage your Finances like the Top 1%

11. Get out of debt

It’s difficult to be consistent in saving money when you’re neck-deep in debt. Tackle your debts first—allot a portion of your income for paying them down.

Once you’ve managed to bring down your debts at a manageable level, you can already start prioritizing your savings.

12. Keep a spending journal

Journaling is a technique popular among those who are trying to lose weight, as it helps them keep track of what they eat and be more conscious of their diet.

This can also be an effective method for anyone struggling to make saving a habit.

Use a journal to write down every peso that goes in and out. By helping you monitor your spending, journaling can also help you discover any bad spending habits and unnecessary expenses.

This makes it easy for you to keep your eye on your savings goals.

Aside from recording your spending, money journaling also aids in creating a realistic budget because it shows all your actual expenses.

13. Choose the right savings and investment tools for your goals

Where you put your savings is just as important as how much money you save. The key to saving effectively is using the right savings tool according to your goals.

For building your emergency fund and other short-term goals, put your money in liquid instruments such as savings accounts, time deposits, and money market funds.

These tools allow you easy access to your funds when you need them.

For long-term goals such as retirement and funding college tuition, go for investment products that enable you to grow your money faster over time.

You can invest in mutual funds, stocks, unit investment trust funds (UITFs), exchange-traded funds (ETFs), and other long-term investment vehicles.

Recommended Reading: Saving vs. Investing

14. Get your family involved

Make saving a team effort in your family. Especially if you’re the breadwinner, it’s hard to save money when your parents, spouse, or kids don’t control their spending.

If the adult members of the household tend to overspend, sit down with them to have a serious discussion about your family finances. Help them understand how they can help meet your savings target by living frugally.

As for children, it’s never too early to teach them the value of saving. Start by getting them their own piggy banks. This simple approach can instill in them the habit of saving early.

15. Politely decline relatives and friends who ask to borrow money

Family and friends who often ask you to lend them money can make it difficult for you to build your own savings.

Rather than give in to every request, have the courage to say no. But do it with respect (because you don’t want to cut your ties with your loved ones).

16. Limit social media browsing and TV watching

TV and social media provide free entertainment, but most of the time, exposure to these media isn’t helping people financially.

Simply by browsing your feeds or watching your favorite Koreanovela, you’ll see ads that tempt you to spend on something that’s nice but you don’t really need.

17. Take the time to decide before purchasing anything expensive

Most of the time, impulsive buying happens because people don’t pause to think about whether the purchase is important or not.

Everyone knows splurging all the time is a bad money habit. But then you give in to the temptation and then regret your purchase later.

To avoid buying on impulse, give yourself time—about 24 hours to 30 days—to decide on a large-ticket purchase. More often than not, the urge to buy will pass after a certain period.

18. Create a list before shopping and stick to it

A shopping list helps you stay focused on what you need to buy and avoid spending on non-essentials.

Before you head out to the mall or supermarket, don’t forget to list down what you’re supposed to buy.

19. Use the envelope budget system

In this digital age, budgeting apps are helpful and convenient to use.

But nothing beats the old-fashioned style of budgeting with cash and envelopes. It’s because this saving method allows you to visualize the money you’re allotting for different spending categories and how much is left.

It’s best to use an accordion envelope book that makes it easy to separate money for different types of expenses. Don’t forget to store it in a secure place!

20. Avoid falling into the lifestyle inflation trap

When you get a raise, bonus, promotion, new side business, or anything that increases your income, there’s the temptation to increase your spending as well.

This behavioral tendency is called lifestyle creep or lifestyle inflation.

The only way to avoid lifestyle creep is to keep focused on your savings and goals rather than how much your income has increased. While you deserve to treat yourself every now and then, do it in moderation.

Remember: as your income goes up, so must your savings—not your spending.



Money Apps & Tools to Help you Save More

With the advent of technology and apps, the smartphone has become man’s best friend.

To utilize your smartphone to help you become a frugal, wise spender, here are several apps that can keep track of your expenses, highlighting savings, and altogether, save you so much of your hard-earned money:

Mint is an app that can track your spending, as well as notify you of unusual and fraudulent charges on your credit card or bank account. Mint can be personalized according to your financial data so that you can minimize spending and maximize your savings.

2. Unsplurge

Remember the 30-day rule discussed earlier? This app works through postponed satisfaction. Unsplurge works by budgeting an amount for something that you want; be it a gadget, a vacation or a property. Unsplurge works by budgeting last month’s money and teaches you to wait and think before you splurge on yourself.

This app is all about cooperation and being on the same page, because Good Budget syncs your account with your spouse. The advantage of this app is it lets you work on a budget as a team.

Truebill helps you save money because it uses a unique algorithm which gets rid of paid subscriptions you don’t use.

In conclusion: All these tips and suggested apps would be meaningless if there’s a lack of intent and discipline when it comes to saving money.

The art of saving money may come off as a chore for starters, but the goal here is to make this habit into your second nature.

By turning this habit into a natural skill, you’re helping yourself and your loved ones in the long run. Financial maturity is just around the corner!