Financial planning for life’s future needs

Dennis L. Berino DBA

Dennis L. Berino DBA

Earning income is great for it affords one the opportunity to purchase things that one needs and wants.

Basic needs would be for food, clothing, shelter and those with families have to provide as well for the education of the children. Medical and hospitalization costs can have a big dent on one’s income. Entertainment and travel expenses provide individuals time to relax and to enjoy the fruits of one’s labor. Luxury items may come in for those with higher levels of income, affording them the opportunity to spend for what we call aspirational products.

Others are concerned about generating capital for a future business opportunity. People in their 40s and 50s are also starting to think, not only about current expenses, but about expenses when they retire and do not have an active source of income anymore.

For the most part, most of the expenses are met through one’s current source of income. A good way to provide for the needs and wants of individuals is coming up with a financial plan for one’s needs in the future. Basic of course in the plan is the discipline of saving or putting aside a portion of one’s income, traditionally in a bank, to provide for future needs.

A bank deposit is a starting point in the savings activity of people. It protects hard-earned money and is a source of liquidity since it is fairly easy nowadays to withdraw from their bank accounts especially with 24/7 ATMs, cash cards and even direct payments to establishments from one’s bank accounts. The savings account can also be used as an emergency fund for life’s unforeseen events necessitating expenses.

If one, however, is starting up a family and would like to purchase a car or a house, two of the biggest ticket items individuals normally pay for, using a savings account, coupled with certain investment opportunities, may help that person realize his or her dream. Savings and time deposits normally offer limited interest rates now to grow one’s funds so individuals can look at government treasury notes and bills and corporate bonds for higher yields.

Banks and financial services companies also normally offer unit linked trust funds and mutual funds, which offer higher potential returns but of course, with certain elements of manageable risks. Investing in the stock market, not as common yet in the country but slowly gaining ground, is one investment vehicle with high opportunity for return. There are inherent risks in doing so but choosing an experienced and reputable fund manager or taking time to study how the stock market works if one will invest directly can mitigate the risks.

The important thing about the foregoing is imbibing the discipline of saving and investing for life’s different, sometimes challenging needs. A person who regularly saves and invests will not only have the opportunity to see his or her income grow but will be in a better position to meet needs in the future, whether they are expected or unforeseen.

Saving and investing do not only benefit the individual. Citizens’ money saved and invested in reputable financial organizations contribute to capital formation, which helps create new businesses, employment, goods and services and directly impact positively the country’s economic growth.

Save and invest, it’s great for your financial health!

The author teaches at the Decision Sciences and Innovation Department of the Ramon del V. Del Rosario College of Business of De La Salle University. He welcomes comments at The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.


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  1. Tricycle Driver on

    Bad advice. Savings and time deposits are not “investments”. What’s the rate of return on these “investments”? Dennis, who are your readers, the middle class? Do you survey them for their opinions on how well they do when they follow your advice?

    Do you follow your own advice, dude?

  2. Mr Berino, i think a fraction of filipinos needs education on long term savings. Why ?probably they don’t know how a mutual fund works especially the risk. most filipinos choose to put their money in the bank because its safe and liquid but they do not know the concept of inflation. when i was a financial consultant in the US, i always advice my clients to have at least an equivalent of 5 months net pay as their emergency fund and at least 10% short term savings and at least 10% of long term savings. I do not recommend ” PALUWAGAN’