Money Mondays with Chinkee Tan

Ano ang gagawin mo sa perang kinita mo? Learn all about the best ways to manage your money and finances with Chinkee Tan!

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Photo by Ben White on Unsplash

Christmas Day is just a few days before the end of the year. Since this is the last big holiday of the year, we give our all, especially with our feasting and gift-giving. Kaliwa’t kanang gastos as if there is no tomorrow. But the reality is, there is a tomorrow and 2020 is fast approaching.

Most Filipinos have the mindset of living in the now. Therefore, most of us have only short-term goals and not aiming for the long shot. This is obvious on how we celebrate Christmas. Grabe tayo gumastos sa handaan na sa Noche Buena na lang halos nailalaan ang 13th month pay. Oftentimes, we forget the concept of tomorrow and the preparation that comes with it. “Bahala na,” as many of us say.

Why do we need to financially prepare for the next year as early as Christmas?

Because life goes on and expenses go on, too

Because next year is another 12 months of non-stop expenses

(Yet) Because next year is another 12 more months of opportunity to create wealth!

To be financially prepared for the next year ngayon pa lang December, let us avoid the following common financial mistakes during this holiday season.

Recap from previous weeks’ articles:

Financial mistake 1. No ipon for the holidays

Financial mistake 2. No plan for the 13th month pay/bonus

Financial mistake 3. Not prioritizing the needs

Financial mistake 4. Fiesta sa mesa, fiesta sa utang

Financial mistake 5. Ulirang anak award

Financial mistake 6. Ninang/ninong of the year

Financial mistake 7. Appliances/gadgets

Financial mistake 8. Fashion / rebonding/rubber shoes

Financial mistake 9. Unplanned travel

Financial mistake 10. Not allocating money to pay off debts

Christmas season is the time when we have surplus of money. May regular salary na, may 13th month pay pa, plus minsan may bonus pa. Idagdag mo pa ang cash prize na napanalunan mo noong binuwis mo ang buhay mo sa Dance Presentation n’yo sa Christmas Party.

Marami talagang blessings kapag Pasko pero marami ring gastusan. What we often do is we spend first before we allocate on the more important things—those that would give us a more financially stable future. Isa na dun ang pag-save for your freedom fund. Ito ang fund mo to free yourself from the enslaving debt.

Why do we need to clear out our debt first? Becoming financially successful ay parang pagmo-move on from your heartbreaks. Hindi ka makakausad at hindi mo mae-enjoy ang bagong pag-ibig kung meron ka pang excess baggage o unfinished business.

Kahit na malaki ang kinikita mo ngayon pero meron ka pang utang, you cannot fully enjoy your earnings. First, dahil sa mga makukulit na paniningil. Second, dahil mababawasan ang malaki mong pera dahil sa pagbabayad ng interes.

Here’s the good thing if you clear out your debt. Sa umpisa ka lang mauubusan ng pera sa pagbabayad. I-sacrifice mo muna ang whole month’s salary mo to free yourself from utang. Yes, at first, masakit kasi sa utang lang napunta ang sweldo mo, but once you have settled all your debts—all  your excess baggage, you can finally enjoy the fullness of your money. The best part of freeing yourself from debt is that priceless reward which is peace of mind. Wala nang mangungulit sa ‘yo. Wala ka nang aalalahanin. You can soundly sleep at night and wake up ready to create more wealth.

Financial mistake 11. Not building the emergency fund

Sa totoo lang, relatively mahirap buuin ang emergency fund because this behavior is against what we are used to. ‘Di ba mas importante sa atin ang urgent matters or yung malapit na ang deadline like pagkain ngayong araw o linggo, allowance for the month, pang-tuition ng anak for the semester. We are so overwhelmed by these nagging urgent expenses that we often disregard our preparation for the future.

Emergency fund is necessary to be built now because you will never know what will happen tomorrow. God forbid na may masamang mangyari sa ‘yo o sa pamilya mo, pero you always need to be ready for these unfortunate circumstances. If you do not have an emergency fund, masakit na nga sa loob ang nangyari, masakit pa sa bulsa dahil wala kang magamit para sa lahat ng gastos.

To help you build a better emergency fund, here are some tips:

  1. Build your emergency fund after you clear out all your debt. Before you invest, free and secure yourself first.
  2. Your emergency fund must be liquid, meaning you can access it whenever. Do not put it in time deposit or in any instrument that will incur penalty once you withdraw it prematurely. Emergency has known no time. Your money must be accessible.
  3. Inform a trusted family member or a friend about your fund. When that emergency happens, you will have someone who knows how to access your fund to cover and secure your family.
  4. Treat the emergency fund as an expense. Kapag nilagay mo na sa bangko, yun na yun. Don’t even think of withdrawing it, unless for real emergencies such as sickness, accidents, or deaths.
  5. Grow it slowly, but steadily. Kahit tig-500 lang per pay day, magtabi ka. Over time, you can grow your emergency fund. Also check with your bank if they have a product that will secure or grow your emergency fund. I know that there is a commercial bank in the country na tatapatan ang nasa savings account mo in case of mortality.

Financial mistake 12. No financial plan for the year

Hindi lang sa New Year’s Day may New Year’s Resolution. Dapat as early as Christmas, nagse-set ka na ng financial goals para alam mo na rin how hard you will work on achieving your goals. Planning will help you direct your time and energy on endeavors that will get you closer to achieving your goals. Planning also will prevent you from embarking on endeavors that really are distractions.

Reminder, next year will be another 12 months of gastusin. Pero ang exciting sa 2020 ay it is another year full of chances to build greater wealth. Here are some tips for making your financial plan:

  1. In your journal, put honestly how much you make in a month.
  2. Then honestly list down all your fixed expenses (i.e. allowance, bills, etc.)
  3. Set realistic goals for your finances. Also identify a time frame.

Example:

Freedom Fund – 100% debt-free by March 2020

Emergency Fund – Php 50,000 by June 2020

Investment Fund – Php 25,000 by July 2020;

Additional income of Php 5,000 per month

Once you have identified your goals, you can now also identify all the action steps you need to take to fulfill all those goals. Ngayon alam mo na kung paano ka magta-trabaho para matupad ang mga pangarap mo.

Na-miss mo ba ang first three parts ng series natin? Clink on the links below: 

Part 1

Part 2

Part 3

THINK. REFLECT. APPLY.

  1. Which among these points do you need to work on more?
  2. Are you working on freeing yourself from all debts?
  3. How’s your emergency fund?
  4. What financial goals are you setting for 2020?

Do you want to retire before 50? If you want, please join us at our online course on HOW TO RETIRE AT 50, please check it out at chinktv.com

Chinkee Tan

An actor turned businessman, Chinkee Tan once became part of the 80s group Hawi Boys of actor Randy Santiago. In 1994, he decided to quit showbiz and enter into the world of business. He got involved in the industries of Sales, Publishing and Consultancy. Now, Chinkee is known as the anchor of his Sunday radio program on 92.3 NewsFM, Chink Positive, an author of 10 best selling books, a social media influencer, a wealth coach, and one of the country’s most sought after motivational speakers.