PinoyMoneyTalk.com

An interesting question was posted in the Inquirer's "Take Charge of your Money" series:

I'm single, in my late 20s, and have a stable job. I want to pursue an MBA, buy a car and maybe a condominium unit, and have enough for my retirement. But with my salary (I earn only P20,000 a month), I don't know how I can set aside money for all these. What more if I get married. Any advice? – Gerard M.

The advice given was a bit generic (define your goals, set a time frame to achieve them, invest your money, etc.) but then again, the column was meant to be read by everyone and not just by the person who sent the question. In order for the advice to be really worthwhile, it has to be specific to the individual asking the question.

In any case, if I had a similar problem, here's what I'm gonna do.

1. Set goals and plan the time frame to achieve them.

The Inquirer is correct in this one. If I were in that situation, I would identify the specific goals I want to achieve first then determine a realistic time period I would reach those goals.

2. Start saving money.

It's basic but not everyone is doing it. Each month, I would budget my salary, automatically deducting 20% of it to put in a savings or time deposit account that I would not touch for a long time. If 20% would put too much constraints on my finances, I'd cut down on some unnecessary expenses first (like the weekly Starbucks coffee, the daily yosi, or the nightly taxi ride home) before lowering that 20% saving rate. Click here for some more tips to save money.

3. Earn more money.

Gone are the days when only one job would suffice to sustain one's living. Find other means of making money! In my case, I would start selling some of my old stuff. Or probably act as a prepaid load retailer to my friends. Or if I have extra time on my hands, I'd look for a part-time job whether online or offline. Here are ways how some Filipinos earn money online. For more tips regarding making money in the Philippines, drop by the PMT Forum.

4. Invest and grow the money.

Once the money I have saved in #2 has grown, I would start moving some, if not all, of them out of savings and time deposit accounts into relatively higher yielding investment programs, such as Bonds, Treasury Bills, Mutual Funds, or Unit Investment Trust Funds. Of course, I'd do research first before actually placing any money in them. Pinoy Money Talk's Investing Guide section is a good place to start. And the Banking, Insurance and Investments Board in the PMT Forum is also a good area to discuss investments with other like-minded individuals.

These four steps may be simple but not everyone is following them. Because if they are, we won't have people worrying about how to get by with their low salaries.

So if someone with a similar problem comes to you for advice, what would you tell that person? Post your opinions in the How to get by with just P20,000 monthly salary? thread in the forum.

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This entry was posted on Wednesday, August 8th, 2007 at 9:06 am and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.