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Saving for a Rainy Day: Ways To Save Money

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.

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As a mother and wife, I am responsible for all budgeting and financial
management.

One of them is to save money.

Saving money is a difficult task.

Especially if you're a housewife waiting for your husband's monthly salary.
You must be clever in managing household finances to see where your hard-earned money goes.

So I divided our monthly income into six envelopes and labeled each one as follows:

NEC (Necessities)

The money saved here is 50 % and used for household expenses.

It includes food, utilities, rent (if you rent), medicine, insurance, and emergency expenses (for example, if someone gets sick in the family and needs to go to the hospital).

Remember that your NEC money consumes a significant portion of your income.

You could reduce your expenses by saving money on groceries and electricity.

It's entirely up to you.

At the end of the month, you could transfer any remaining NEC funds to your other savings.

SIB (Savings/Investment/Business)

It is for your savings, future investments (such as buying a house or property), or a business you want to start.

I tried a mutual fund with a portion of the money, and it's a good investment.

What exactly 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 such as stocks, bonds, money market instruments, and other assets." Professional money managers operate the mutual fund, allocating the fund's assets and attempting to produce capital gains or income for the investors.

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A mutual fund is comparable to a time deposit or securing it in a bank, but it outperforms both because there is no withholding tax when you withdraw your money.

A mutual fund can offer higher interest rates than a savings account or time deposit.

FAMI, or First Metro Asset Management, Inc., manages my funds because I live in the Philippines. There are also other brokers available.

The stock market is another option for investing money.
A stock market is similar to an auction house where people can buy and sell stocks.

Trading refers to the buying and selling of stocks.

If you live in the Philippines, two stock brokerage firms can help you with this.

The first is Firstmetrosec, and the second is COL, formerly known as CitisecOnline.

I have mine with Firstmetrosec, which allows me to keep my mutual fund and stock market accounts in the same bank, Metrobank.

Reading financial magazines or participating in investment forums can help you figure out where to put your money.

Joining forums on Pinoy Money Talk taught me a lot about investing.

EDU (Education)

Saving money for your children's education is essential because they need it for their studies. It is beneficial to start saving for their college education while they are still young so that you will not have difficulty finding the funds when the time comes.

If you're lucky and your child or children are intelligent, you might be able to find some scholarships for them. In the Philippines, financial assistance such as ESC vouchers and SHS vouchers is available to those unable to send their children to a private school.

LTW (Long Term Wants)

Everyone desires something unique, even if it is costly. So this is for something you can't afford right away (for example, a trip to another country, a home in a gated community, or a brand new luxury car), and you need some time to save for it.

This money is for your long-term goal, which you will gradually save from your extra cash until you reach it.

PLAY (Treats)

It is true that "all work and no play makes John a dull boy," so you must "pay yourself" as you work hard (especially your spouse). The whole family will enjoy using the savings from this money to treat themselves to entertainment like movies or new clothing.

GIVE (Tithes and Charity)

Lastly, donate at least 10% of your income or some of your revenues to charity in church tithes.

I also believe in tithing and giving back because it is how life works, and the bible says that "whatever you give will return to you tenfold."

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

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