For 20-somethings, 9 money resolutions to help you save

What money resolutions can you commit to actually doso you can save your financial future?

My fellow 20-somethings, here are just 9 of them, to start:

1. Spend at least 30 minutes to clearly visualize your financial goals for the year 2016.

After the fireworks show and when most of the people in your neighborhood have fallen asleep, sit down and reflect on the top three financial disappointments that you had last year. You can base your new money goals on last year’s regrets.

No emergency fund? Make starting one this year a priority.

Haven’t started investing yet? List “open an investment account with the minimum initial investment this year” as one of your goals. (READ: Where to invest in 2015

Splurged your money on branded shoes because your significant other broke up with you? Include controlling your impulse spending in your visualization (or find someone better for you?)

2. Set up regular automatic fund transfers/automatic investment for your Enjoyment Fund to be spent on your birthday.

In our book OMG! Where Did Your Sweldo Go?, I mentioned that we need to save up for our SELFIE (Security, Education, Livelihood, Fixed expenses, Insurance & Enjoyment).

During your birthday celebration, instead of racking up debt because you want to rent a hotel room for the weekend, or to treat your whole barkada to a buffet or to spend a week abroad with your partner, it’s better to spend money from your Enjoyment Fund.

This way, you get all the fun minus the consumer debt and headache that comes with unpaid credit card debt. (You can also do this for your holiday vacation.) 

3. Commit to paying your credit card bills in full and on time – every time.

 

Owning a credit card is like owning a car: it’s fun, the perks are awesome and it’s convenient to use – until you exceed your credit limit and you get your monthly credit card bill. (READ: Got your first credit card? Read this)

The only way for you to avoid drowning in debt is to pay off your full balance on time every single month. This will only work if you use your card for something that you can afford.

If you can’t afford it in cash, what makes you think that you can afford it via card? (READ: 4 secrets credit card companies don’t want you to know) 

4. Avoid fees as much as you can.

You need to withdraw money from Bank A but you don’t want to walk too far so you use an ATM machine from Bank B instead. Do you find yourself doing this? Beware of ATM fees.

You know that your account has insufficient funds but you issue a check anyway? Your overdraft fee or bounced-check fee is no spare change.

The DVD you rented and failed to return two weeks ago? The late return fee adds up. The more we procrastinate, the more money we lose!

5. Practice the “Elimination Diet” in your purchases.

List down 12 items in your budget that you realistically think you can try living without. For example, this January, scrap off “buying water bottles” for the whole month and bring your own tumbler instead. That’s P600 saved.

For February, how about eliminating your cable bill and watching online instead? Let’s be honest – you’re not at home enough for you to take advantage of cable. That’s P500 saved.

Just imagine how much you can save by eliminating one item every month!

6. Learn to say “no” to things that don’t matter and “yes” to things that do.

When you commit to doing things that you’re not really interested in, you do not only waste your efforts and your money – you waste your time, too. There’s also an opportunity cost in being a people-pleaser: your valuable time could have been spent on something that you enjoy with people you love.

Time is the new money. Don’t just give it away whenever someone asks for it.

Make time for your priorities. If you don’t, no one will.

7. Don’t lend money you can’t afford to lose.

When someone borrows money from you, carefully consider if they really need the money or not. If they don’t, then lovingly refuse. If they really do, then, in your mind, give – not lend – them an amount that you can realistically lose, and don’t expect them to pay you back.

8. Start a second source of your income.

Don’t just depend on your job to provide for your needs. Assuming that you lose your job and you use up all your emergency funds while job-hunting, what will happen to you then?

Our bills love us unconditionally. They’ll still come even if we have a job or not.

This year, aim to monetize your hobby while maintaining your job at the same time.

Be a freelance graphic artist or virtual assistant at oDesk or 199Jobs. Sell your photos on Shutterstock. Teach English online. Trade your unused stuff for money. Post in online forums at Postloop or answer legit surveys at Brand Institute. Simply start something worth your resources!

9. Fully understand why keeping your long-term savings in the bank is a bad idea.

Banks are great…for your emergency fund, your daily expenses and your short-term savings. But if you have money that you won’t be using in 5 years or so, it’s generally better for you to “invest” it rather than “save” it.

It’s because of annual inflation. Every year, the prices of goods and services increase. Last October 2014, inflation rate was 4.3%.

Your savings account or time deposit account gives you at most 2% increase.

The inflation rate has a 4.3% increase, so your money’s purchasing power decreases by 4.3%.

Think of it this way: when you open the faucet, you get 2% water, but at the same time, you lose 4.3% of the water you get. It doesn’t matter how big your pail is or how long the faucet is open – if you continue this cycle, you end up losing water, right? 

The best time to invest was yesteryear, 2015.

And because we can’t time-travel yet, the second best time is today, 2016.

Your future is simply a result of your actions today.

You don’t want to let your 65-year old self take the blame and suffer for your money mistakes when you were 25, do you? – Rappler.com

Lianne Martha Maiquez Laroya, RFP® is a licensed financial advisor who founded TheWiseLiving.com and YoungPinoyMillionaire.com, both websites dedicated to teach you about money management and investing without boring you to tears.  Get a copy of her book, OMG! Where Did Your Sweldo Go? here. Connect with Lianne on Twitter, @MsLianneLaroya