Learn the Right Formula to Save.

How long have you been working? How much have you saved then? Do you even think of saving? Do you realize that if you save 1000 every month, you will have 12,000 in a year, 60,000 in 5 years and 120,000 in 10 years?

                     

Oh my, I am in my 20s when I was thinking of those things. I also thought of the time when I am no longer capable to work. I have to retire. When I retire, I don't earn monthly salaries anymore. With no money, how can I buy food, clothes, medicine, and other necessities? I don't want to be a burden to my family.

This reality hit me and I'm glad it hit me hard because it made me realized that I have to save money as early as now, while I still have a fit body and mind to work.

I might not be the only one thinking about these things. So now, I’m thankful for Bo Sanchez's book, “My Maid Invests in Stock Market… and Why You Should Too” (Download The Book Here), I have something to share with you regarding saving.

Discovery of the “Saving” Formula

Is this formula familiar to you?

Salary - Expenses = Savings

I believe most of us followed this or follow this, still. This means that your SAVINGS will be derived from what’s left in your salary after deducting all your bills and other expenses.

What's wrong with the above formula? Well, if you are planning to secure your savings every month, then there’s something wrong with this formula. There's a possibility that all your salary will be spent to your expenses and as a result, you will have NOTHING to save.

Let’s compare the formula above with this one,

Salary – Tithes – Savings = Expenses

This formula means that when you get your Salary, you immediately deduct your savings and tithes (give it to the Church that nourishes you). You live by the remaining amount for your expenses and you have a sure amount for your savings. Isn’t that great?

70-20-10 Rule

Now the question is “How much will be allotted for tithes, savings and expenses?” That’s what the 70-20-10 stands for. According to the Bible, we should give 10% for our tithing (that’s a minimum, not really restricted to 10% only). For the savings, 20% is a good number and the 70% remaining is what you use for your everyday expenses (until that next salary payout). In this manner, you are able to save 20% of your salary each month.

Benefits of 70-20-10 Rule

This formula seems simple. At times it can be tough to follow, however, following this entails a lot of benefits. Based from my experience, here they are:

1. I've learned to manage my daily expenditures.

Strictly living by my 70% budget for expenses, I knew how to differentiate what’s a necessity and   what’s not.

2. I become more disciplined.

Even if I wanted to go to malls because of sales and promos, when I think I have 70% only to spend I disregard the thought.

      3. I have savings I never thought I would have in my 20s.

After 2 years of faithfully setting aside 20% of my monthly salary, and investing it in Stocks with Bo Sanchez’s guidance in Truly Rich Club, my savings grew to almost 55%. (Know more about the Club or Join the club here) I didn't imagine that this is the result of maintaining the 70-20-10 formula.

      4. I am now able to give 10% tithes.

This is something I am happily giving. It gives me a sense of fulfillment that I am able to give back to God a portion of what He has given me.

The 70-20-10 rule taught me a lot in facing my financial challenges. It taught me not to worry but instead to act. When budget gets tight, adjust (no gimmicks for the time being, avoid buying expensive clothes, and take my eyes off from those cool gadgets. Hehe) I am positive I will succeed in my financial aspects if I continue this discipline. 70-20-10 is my “Saving” formula. And I hope, it will be your "Saving" Formula too.

Let's all prosper!

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