When it comes to managing our finances, as with all things, we are taught, the earlier the better. In fact, in the Philippines, several banking and insurance companies have taken the initiative to spread financial education to grade school students.
Financial literacy seminars teaching the basics of saving and investing are also becoming widespread, targeting young professionals who are just starting to earn their own income. But how about people who are older or are farther into their careers who have not yet gotten around to getting their finances in order? Is it too late for them to start?
I sat down with Ron Gutierrez, a friend who is a financial advisor, a couple of months ago. I told him that I felt that I was too far behind in terms of saving and investing. At that time, I was still losing a large part of my paycheck to mindless spending and other luho (luxuries), of which I had a hard time letting go.
Early in my career, I did my part in educating myself financially and building my savings. I attended financial literacy seminars, basic stock investing seminars, and even tried joining multi-level marketing companies to earn extra. However, all these efforts are nothing without proper application and consistency. And before I knew it, I was 28, and still mostly living from paycheck to paycheck.
I wondered, is it too late for me to get a grip on my finances? Is there really such a thing as “too late” when it comes to sorting out one’s finances? Gutierrez had this to say, “In my opinion, it is never too late. Di man investment growth, there’s the peace of mind that comes with sorting things out for you and sa mga maiiwan mo.
(Even if you won’t enjoy that much growth in investments, at least you’ll have peace of mind knowing that you’ve sorted out things for yourself and for those you’ll leave behind).”
He does believe, though, that older people, particularly those in their 50s, have to consider a different approach to investing. “The [only]difficult thing is that when you get older, you would no longer have as much time to work with. Older people like those in their 50s would require a different investment strategy.”
Some of the investments he suggests for those who have joined the investing game quite late are stocks with higher dividend payouts, bonds, and rental properties. He said although these investments do not guarantee return or safety, these are better choices for older people than aiming for growth.
However, as with anything you’ll invest time and money on, it’s important that you don’t just rely on the opinions of others. You have to educate yourself as well. Gutierrez suggests, “As with any investment, the possibility of losing everything is always there. One of the important things is to try to understand what it is you’re investing in.”
So don’t be afraid to read more materials about the particular investment you are looking into, ask people who have made similar investments how it has worked out for them, and get more opinions from other experts. This way, you’ll be able to make a more informed decision.
Before making any investment, you must have enough savings first. Most experts suggest maintaining an emergency fund, which is equivalent to at least six months of your salary. For those living from paycheck to paycheck, how does one begin to save? Likewise, for those in debt, how does one find a way out?
“The first step is acknowledging you have a problem,” Gutierrez said. After which, he suggests tracking your expenses. Although it seems simplistic, listing down your expenses can actually be a very useful exercise. It makes you aware of your spending habits and the things on which you are spending excessively. Once you’ve got those things figured out, then you can make the necessary lifestyle adjustments so that you can allot more money for savings.
Although earlier is better when it comes to certain things in life, one can’t really put a deadline on learning. And that includes learning how to take better control of your finances, and perhaps building a better future for you and your family.
Katrina C. Guevarra is a content writer for MoneyMax.ph, the Philippines’ leading comparison website for insurance, credit cards, and loans. We want to help you save money through free and fair financial information, so please tweet us: @MoneyMaxPH, like us on Facebook: MoneyMax.ph, and email your comments to firstname.lastname@example.org. For more information, visit our website: www.MoneyMax.ph