I met my wife, Hilda, when I was in my early twenties. She was happy-go-lucky, even some would consider her to be spoiled. Because I saw her that way, I had this inkling that we would have a hard time agreeing on finances if we ended up being together as a couple.
However, marrying her was a different story. Even at a young age (we were both 27 at the time), we were very mature when understanding the value of our hard-earned money. With her prodding and support, we could secure a house in the south, near our places of work. At 33, we were already fully paid with our house and are now working on our second mortgage.
Our ingredients
All of what we’ve accomplished so far resulted from plans and lessons learned during this ongoing journey. Here are some of the many ways that enabled us to jump through the hurdles of our finances in our 30s and will undoubtedly serve as our guide for the road ahead.
Save on high gain
Early on, I tried to convince my wife to start saving money thru savings cooperative for military personnel and their dependents because, unlike commercial banks, dividends plus interest rates can reach around 8 percent on average per annum. Now, our initial investment has more than doubled.
No credit card rule
I’m not saying having one is bad, but it worked for us because we did not have the temptation to spend when we had none. Or you can look at it differently, like use it only when you need it and not for your wants. And if you need one, make sure you pay up on time.
Be free from bondage
Nowadays, owning your own house and having a car is essential, but it would mean getting loans if you don’t have the funds to pay in full. For our case, we tried to pay up our house and car mortgages as soon as possible by using savings mostly from yearly bonuses. We’ve paid these debts in the middle of their respective terms instead of enduring the whole duration of the plan. Doing so was always a relief!
That feeling of being free from financial obligations. Shackles off!
Secure your savings
We knew we needed to be prepared for the unexpected, so we availed of health and disability insurance, which would allow us to have a buffer to protect our savings in cases of emergencies. And for good measure, we picked an investment-linked type of insurance that would also provide us with a secondary source retirement fund in the future.
Educate yourself
Several avenues are available for us to grow our savings or generate funds. During the first few years of my career in the semiconductor industry, I failed to recognize the importance of employee stock options that were part of my benefit. That was one of my regrets because I stayed hesitant about the unknown instead of understanding it.
The same can be said about our investment-linked insurance because our decision was quite late, limiting our opportunity to gain more on our portfolio. Looking back, I now believe that doing nothing was worse than failing.
Spend your extras
Our friends know us to be a couple that loves to travel, and it hasn’t changed a bit. We also frequently go on quick getaways and food trips whenever there are gaps in our busy schedules since we work in a fast-paced and demanding manufacturing setting. We sustain our travel-seeking urge by saving as much as we can to have enough funds on top of our planned savings, which we call the extras, which are the primary source for all our wants.
What it takes
More than the recipe, if there is one thing that was very instrumental on our road to financial security, I’d say it is discipline. We had plans, and we stuck with them. We have never stopped saving up to now. If there were doubts, we tried to understand the risks and gains beforehand. Doing so gives us the confidence to decide on any venture.
My wife and I believe that it is never too late to start saving both for the sunny and rainy days of our lives. Our ingredients may not work for everyone because fiscal approaches can be affected by several aspects of living, and the routes to economic stability can also be fluid. But there is no denying, Now is always the best time to be financially literate.
The author is an MBA student at the Ramon V. del Rosario College of Business, DLSU. He can be reached at larry_biocarles@dlsu.edu.ph
The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.