Kicking of 2018, Go Negosyo sa Radyo hosts Sen. Bam Aquino & DJ Cheska San Diego-Bobadilla were joined by regular guest and Go Negosyo Angelpreneur Mr. Armand Bengco for an episode tackling a most relevant topic during cusp of a brand new year — resolutions!
At the beginning of each year, many people all over the world are filled with the optimism and drive to change and grow in order to better themselves. Oftentimes, new year resolutions fall under the physical (I will lose weight this year!), professional (I will get a promotion!), social (I will make an effort to meet new people!), spiritual (I will pray more!) health (I will stop smoking!), and relationships (I will not be single!). But Mr. Bengco insists that financial resolutions are equally, if not, more important as they immediately affect us and our well-being. Other resolutions take a long time while financial resolutions have immediate results or consequences that compound throughout the year.
Thus, Mr. Bengco asks us: what will you stop, start, and continue (SSC) in terms of managing your finances?
To guide many of us financially confused citizens of the Philippines, Mr. Bengco gave us his five personal financial resolutions that can get us on the road to a most prosperous 2018:
1. Follow your money
Mr. Bengco says that tracking your money is essential to knowing how to save, spend and invest! An important step during the new year is to PLAN and write down your goals. According to Mr. Bengco, if you don’t write them down, they are simply dreams and not plans.
For the first 100 days of the year, continue your regular spending and saving habits BUT get into the more important habit of RECORDING YOUR ACTIVITIES. After which, you may label your expenses weekly and see which ones fall under the following categories: must have, better to have, like to have.
In the first few months, recording and labelling your expenses will give you a clearer picture on what you are prioritizing this gives way for the second financial resolution. (If you hate writing, there are many apps available today that make tracking your expenses easier!)
2. Reduce or eliminate expenses
Once you begin recording how you are spending your money, you may also start seeing how you are overspending. An example Mr. Bengco gave is on coffee. Many Filipinos are spending regularly on expensive coffee joints such as Starbucks. And one can argue that they NEED coffee to properly function. However, do they really NEED to spend in expensive places such as Startbucks or Coffee Bean to get their coffee fix?
One such way to reduce your expenses given this example is to put a limit on how much you spend for something. In Mr. Bengco’s case, his family decided to lessen their consumption of Starbucks coffee from 5,000- 8,000 pesos a month to only 2,000 pesos a month. Furthermore, they found alternatives to expensive coffee such as seeking out local and equally good coffee joints and investing on devices that allows them to make their own great coffee at home.
This example shows us that we do not have to completely sacrifice our “like to have” in order to reduce our expenses and save money.
Go Negosyo sa Radyo hosts Sen. Bam Aquino & DJ Cheska San Diego-Bobadilla with Go Negosyo angelpreneur Armand Bengco.
3. Be active in the financial world
Being active in the financial world opens up a lot of financial opportunities for Filipinos. In Mr. Bengco’s words we must get into the “winning experiences.” For example, setting up your OWN bank account wherein you may put in your savings, allows your money to earn interest versus allowing it sit in a payroll account where no interest is earned. A better winning experience is learning where and how to invest your money. Although saving your money in banks allows it to earn interest, the growth is rather small and and slow. By learning how to invest, money you set aside to SAVE can compound and grow exponentially over the time. However, one must be involved in their investments so as to manage risks well.
4. Set PTT (Purpose, Target, Timeline)
Aligned with the third resolution, Mr. Bengco posits that Filipinos must also learn how to set their Purpose, Target and Timeline. In the case of investing, Filipinos should first set their purpose, create a target, and establish a timeline. For example, if you are investing 1,000 monthly in a mutual fund so you can earn 400,000 in 10 years, track whether the fund is actually getting you to reach that goal. If not, adjust and find where else to put your money in.
In the case of paying off debts, Mr. Bengco also proposes the same formula. Filipinos often have multiple streams of loans they have to pay-off, thus Mr. Bengco says planning is also essential. For example, if you have six debts, pay-off first the one you can finish faster irregardless of the interest. In this way, you lessen the number of debts you had, and the institution that gave you the loan you were able to pay-off may be able to give you another loan that can help you pay-off your other debts!
5. Get into the wonders of sharing
This final resolution may have to do less with technical formulas of how to save, invest and spend and more on returns that truly matter in the long run. Mr. Bengco borrowed words which said “no one is too rich not to care, no one is too rich not to share,” meaning even if we are cash strapped, there is always an opportunity to help our community. There are three ways one may share and that is through time, talent and treasure. And what Mr. Bengco has found is that when you serve your community well, your community will reward you naturally with profit. In other words, sharing is a form of giving that will only makes us richer in a multitude of ways