“You can be young without money, but you can’t be old without it.”
– Tennessee Williams
“Pay yourself first.”— A phrase in personal finance we may have heard far too many times. Chances are we each have our own interpretation of what this really means. For some it is doing what we love to do, while for others it may mean saving or investing. Since this is the season when money is overflowing, I thought it is the perfect time to share some ideas on how to pay yourself first this holiday season.
Save for your uncertain self. In case you are a good saver, this is the best time to save the most. Set aside a significant portion for your current peace of mind. In case you are not a saver, this is the perfect time to start. You don’t have to wait for the New Year to start right. Starting now is starting right. Saving is your way of paying yourself for tomorrow, for your immediate future, for we don’t know what tomorrow may bring.
Protect your most valuable asset. In case you are not aware what your most valuable asset is, it is YOU.
Ensuring that you are protected from life’s uncertainties may be a good way to pay yourself. There are different ways to protect yourself – take care of your body, exercise, eat well and sleep early. Financially, insure yourself.
Whatever gives you the most income, insure that as well. Insure to ensure financial security when hit by life’s uncertainties. The cheapest life insurance (depending on age) can start at the P1,000 to P2,000 range per year.
Same goes for accident insurance. Health insurance plans are more expensive but can start for as low as P5,000 to P8,000 a year.
Invest for your future self. When we talk about investing, we talk about something farther down the line. Not now, not tomorrow, but something longer. Pay for your retirement, pay for the life you dream about. You may start by opening your own pooled fund account. It doesn’t have to be a large amount, as some banks and financial institutions allow you to start for just P1,000. Given that some are fearful of the political uncertainties here and abroad, it may be a good time to jump on the opportunity of starting now. As Warren Buffett famously said: “…be fearful when others are greedy and greedy only when others are fearful.”
Invest on your dream of owning a business someday. Many would probably list owning a business as one of their long-term goals. Well, the good news is, you pay yourself by owning one today. For P5,000, you can start buying shares of stocks of publicly listed companies. You can start off by picking some companies you believe in and treat this as your own business. One of the perks of buying shares in one of these companies is that you don’t have to worry about your new company’s day-to-day operations. Eventually though, you have to do some due diligence and research more about your selected company.
Spend for your playful self. Well, I put this last on my list because I don’t want this to be the first one on your mind. Not sure if it is effective, but in case it isn’t, then I’m telling you now. You can be playful, but try and do the ones on top of the list first. The only time spending can go wrong is if a) you are spending money you don’t have and b) you are spending everything. So for this, allocate a small portion for you to be playful and enjoy life’s simple pleasures.
December is the season when we are most generous. Hopefully, this year, when you make your holiday list, you won’t forget the name that deserves the most generosity—yours.
Jeremy Jessley Tan is a Registered Financial Planner of RFP Philippines. Learn more about personal financial planning at the 59th RFP program this January 2017. To inquire, e-mail firstname.lastname@example.org or text <name><e-mail><RFP> at 0917-9689774.