Charlette is an investment addict and loves to invest her money in mutual funds and the stock market aside from just saving in the bank.
As a Mom and a wife, I do all the budgeting, and I manage our finances. One of them is saving money. Saving money is not an easy task. Especially if you're a housewife just waiting for the monthly salary of your husband. You must be wise in managing the household finances so that you will know where the hard-earned money goes. So what I did is I divided our monthly income into six envelopes and labeled each with the following:
This money is for the necessary expenses in the house. It Includes the grocery, utility bills, house rent (if you're renting), medicine, insurance, and emergency expenses (For example, if someone gets sick in the family and needs to go to the hospital). Remember, your NEC money eats a large portion of your income. So 50% might go in here. You could lessen the expenses by saving in some areas like grocery and usage of electricity. It's really up to you. At the end of the month, you could turn what's left of your NEC money into your other savings.
As it states, this is for your savings, future investments (like buying a house or property), or a business that you would like to build. This money is for building some assets. A good investment I tried is a mutual fund.
What is a mutual fund? According to Investopedia, "A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Professional money managers operate the mutual fund. They allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus."
Having a mutual fund is like a time deposit or securing it in a bank, only much better than a time deposit and savings account since there is no withholding tax when you withdraw your money. A mutual fund also can earn higher interest, unlike a time deposit or a savings account. Since I am in the Philippines, I have my money manage by a fund manager at FAMI or First Metro Asset Management Incorporated.
Another way of investing money is through the stock market. A stock market is like an auction house where one can buy or sell stocks that they bought. The buying and selling of stocks are called trading. If you are in the Philippines, two stock brokerage firms are good at this. One is Firstmetrosec, and the other is COL or formerly known as CitisecOnline. I have mine with Firstmetrosec so that both my mutual fund and stock market accounts are in just one bank, the Metrobank.
You can also do your research about where to invest your money by reading financial magazines or joining investment forums. I learned a lot from reading Pinoy Money Talk.
Saving a portion for your children's education is a must since they needed to study. It helps to have savings early for their college education while they are still young so that you will not have trouble finding where to get the money needed when the time comes.
If you're lucky and your child is smart, then you can opt to find some scholarships for him/her. In the Philippines, there is also some financial assistance like ESC voucher and SHS voucher to aid those who are incapable of sending their children to a private school.
LTW (Long Term Wants)
Everybody wants something special even if it's expensive. So this is for something that you cannot buy right away (for example traveling to another country, a property in an exclusive subdivision, or a brand new luxury car that you are eying), and you need some time to save for it.
This money is for your long-term goal, and you can save slowly from all the extra money you receive until you reach your goal.
As you are working hard (especially your spouse), you must also "pay yourself." As the saying goes, "All work and NO play makes John a dull boy." This money is rewarding the whole family like maybe watching movies, buying new clothes, etc.
GIVE (Tithes and Charity)
Lastly, you should also spare some of what you are earning to charity. When you hear mass you should also give 10 % of what you are earning through giving tithes. I also believe in tithing and giving back because they say: "Whatever you are giving will come back to you in tenfolds." That is the way life works.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2009 Charlette