In the most recent WHO data on total life expectancy, Philippines has 68.5 years. If you are fifty years old now, you still have about 18 years to save money. That’s a fair amount of time to still consider building a savings plan.
Time and again you read and hear that it is better to save early to earn more from your money. While that is a fact, it must not deter you from saving money even if you are already fifty. Remember that any amount you save will give your life significance. You still have money to spend when you reach that ripe age.
The amount you save in the future is not very much but at least, you can still make contributions, or have something to share with anything you would want to take part of in the future or buy something valuable that you want to have.
First and foremost, you need to have resources to save. How else can you do it without them? At this point, where your resources come from does not really matter (except, of course, they have to be hard-earned and legit). In short, whether you are still working, or your children is providing for you and giving you money, those are resources as categorized.
How are you going to do it? That is the question.
Change your mindset
Admit it or not, it is a challenge if you are already fifty. As Oscar Wilde said, “I am not young enough to know everything.” But saving money is not rocket science. What you need to do is to change your mindset. Do not entertain ideas that you cannot do it anymore because you are not that young anymore.
If you think it’s better to spend the money because you are getting older anyway, rebuke yourself for having such mindset. You have to get into that mindset that age is not a deterrent to pursuing a financial goal. Remember that money saved is money earned (from a 17th-century proverb – A penny spar’d is twice got.)
Do not be afraid to fail or be affected unreasonably by previous failures. Most people always want sure things to happen. Failures restrict them to go beyond what they can do or think outside the box. Do not be like them. Instead, go against such common and negative mindset.
Define your goal
Any plan starts with an objective or a goal. Remember the S.M.A.R.T principle discussed in the previous article How to Attain Your Lifestyle Goals thru Your Financial Goals? Your objective (or objectives, if you have more than one) must be specific, measurable, achievable, realistic, and time-bound.
Speaking of which, take this example:
Objective: Save one hundred thousand pesos in 15 years for my grandchild’s college education.
- It is specific because you know what you are saving for.
- It is measurable because you have a targeted amount for a number of years.
- It is achievable because you are still employed and can afford to set aside 20% of your net income.
- It is realistic because you can manage your day-to-day life even if you save 20% of your net income.
- It is time-bound because you know when you can reach the targeted amount of hundred thousand pesos.
Find the right options to save money
There are many ways to save money as there are many options to use to save money. Find them and pick what is best for you.
- Automatic savings – if you are still working in a company, you can ask help from the concerned department in deducting an amount from your pay slip that will go directly to your savings account. This is a very effective way to save money because you will only use the money you see.
- Savings account – if it is not possible to apply the automatic savings, you can choose to open a savings account. This requires discipline to apportion an amount to savings and deposit them to your savings account. You can choose short-term goals if you consider ease in converting your savings to cash and safety for your money.
- Stock investments – if there is an extra money, you can decide investing in the stock market to make extra more money. This is a risky opportunity so it is best that you do it with caution, that is, you need be knowledgeable first on how to invest in the stock market. Also, you should not use this option for long-term goals because results are unpredictable.
- Government Securities – this is also a type of investment through treasury bonds and bills. These are risk-free and sure-thing investments as claimed. If you decide to invest in these government securities, you have to know first that these are not tax-free.
Monitor and measure your progress
Part of your savings plan is the monitoring and measurement of your progress. Once done in choosing the right option for your financial goals, you need to check and measure your savings. This is one way of checking if you are meeting the requirements of your goal.
You may choose to have someone – your partner in life, for example – know these financial goals and share the development. At this point, you are not the only one monitoring and measuring your progress. They can help in reminding if you are going off track. Their shared expectations will be your performance indicator so that you will not fail.
As you are religiously following your savings plan, take the time off to reward yourself for doing a great job and being able to stick to your plans. It would not hurt to treat yourself once in awhile to continually motivate yourself.
Are you still having doubts to build a savings plan because you are already fifty? You should know what you want and you can do it. Set aside money that you can use later in the future. Stick to your savings plan even if you are fifty years of age already. It is not what matters.
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