The frugal and the successful have their favorite quotes and
principles to live by, but one oft-quoted line is,
“It’s not how much you earn that matters, it’s how much you save that counts.”
Indeed, even if you earn Php 50,000 a month, but if, by the
time you retire, you will have nothing to show for it, your Php 50,000 a month
was a complete waste of a perfectly good salary.
Thus, as early as your first months into your career, you
should have a plan on how to make the most out of what you earn.
One great tip we came across recently was an expansion of
the principle of “Pay[ing] yourself first”:
I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you.
This
is a quote from the book The Richest Man in Babylon, by George S.Clason, found on theblog by Bible Money Matters. It’s a sensible concept that has made an
unskilled, not-too-talented man the richest man in Babylon.
A part of all you earn is yours to keep. It should be not less than a tenth no matter how little you earn. It can be as much more as you can afford. Pay yourself first. Do not buy from the clothes-maker and the sandal-maker more than you can pay out of the rest and still have enough for food and charity and penance to the gods.Each time I was paid I took one from each ten pieces of copper and hid it away. And strange as it may seem, I was no shorter of funds, than before.
The last sentence should encourage those who think that
there could be a budget deficit if they take out a tenth of their income
diligently. For those who need to live on Php 100 a day, that’s just Php 10
less. What is 10 pesos worth? A glass of sago’t gulaman from a street vendor?
Jeepney fare? The lowest denomination of load that you can buy?
If you’re working with Php 1,000, what is Php 100? A meal in
Jollibee? Php 100 in cellphone load? An MRT stored value card? Surely you can
do without Php 100. If you squirrel it away first and foremost, you won’t miss
it.
Get Rich Slowly also recommends doing exactly that. He cites
his wife as an example of a success story in the principle of paying oneself
first.
And to quote the key to making the “Pay yourself first”
lifestyle work:
My wife is a perfect case study. She started by having 8% of her pre-tax income set aside in her employer’s retirement plan. As her salary increased, she increased the amount she saved, routing it to various retirement accounts. Because she never saw the money in her paycheck, she never missed it. Now she saves 24% of her income, and she receives a 6% employer match! How did she do this? By paying herself first.
As they say, “Out of sight, out of mind.”
So, are you ready to put this principle to work?
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Photo Credits: Money Top 10
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