NU12 #5 New Spending habits - Anthony G. Parungao

NU12 # 5 – New Spending Habits

by Anthony G. Parungao

SPEntrep S1

 Christmas season is in the air and additional spending will always be part of the equation and a traditional Filipino way of spending.  Most of us employed will be receiving our Christmas bonuses as early as November.    So how do we get money wise this spending season?  We as an individual, whether living independently, with our folks,  in a relationship, or as the head/budget minister of the family,  we always find it difficult to exercise and take control of our finances whether it's a need or a want.  

 Most of us define savings as Income minus expense is equal to savings, but it should be Income minus savings is equal to expense, following the first formula (latter) will not lead you to financial freedom.  It takes extra-ordinary discipline to keep a portion of your monthly income before spending whatever is left.  So make it a habit to set at least 20% of your monthly income and you'll be surprised at the end of the year how much you have saved for your future needs or wants.  It will take a while before you realize that it only takes no more than 80% to live within your active income.    "Your income must first be reduced by your savings needs.  What is left after is then available for living expenses".  I've read from the book of Francisco J. Colayco – author of Wealth within Your Reach that Savings is really an expense, It is, however, an expense that buys your future.

Set a limit on your expenses for this Christmas season.  We always hear that Christmas comes once a year and spending for your loved ones with extravagant gifts is a metric or gauge for ones status or success in life.  However, we can set limits or provide a budget allocation for the gifts we intend to buy so we do not exceed within our capacity.   Happiness is relative, we can never be really sure if expensive gifts will satisfy the receiver.  What is important is our genuine love and care that we show them and the meaningful moments together this Christmas.  "Life itself teaches us that sharing our blessings always brings back more blessings.  This is especially true when we do not expect anything in return for the good that we do."  Mr. Colayco emphasized that we must always share part of our wealth, whether it be in terms of money or talent or "genius".  As Ruth Smeltzer said " You have not lived a perfect day, even though you have earned your money, unless you have done something for someone who will never be able to repay you". 3

Anthony G. Parungao

SPEntrep S10