Put yourself at ease by protecting those you love
10 January 2022
Your future is dictated by the choices you make today. No matter how seemingly small and trivial, every decision you choose now will reverberate in one way or another tomorrow. For example, how your finances will look ten years will rely upon your spending behavior in the present.
Consider your usage of a credit card. You may comfort yourself in thinking that you’re only shopping for non-expensive stuff and there’s nothing to be alarmed about. However, regardless of the individual prices of your purchases, they do still add up. Before you know it, you’ve incurred more debt than you can pay. And your future self will be looking at your past self with reprimanding eyes.
If you do not want that to happen, it pays to think about your financial security not later but now. Be mindful of every choice you make because they will have an impact on your financial future. Here are aspects of life you need to look into to make better financial choices.
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1. Where You Live
You have critical decisions to make here. Should you settle within a metropolis where the cost of living is higher compared to suburban communities or the provinces? If you decide to reside in the city, should you choose a house or apartment close to work, even if rent or mortgage is potentially pricier, or endure the long daily commute to and from the office?
This is where you summon the math wizard in you. Have a calculator and a pen and paper ready (or open up a modern finance tool like Excel or Google Sheets, if you need extra firepower). Compute the corresponding expenses for each option available to you. Of course, choose the route that allows you to save more and prepare for the future.
2. Whether You Buy or Rent a Home
Relevant to the first point, knowing whether to rent or buy a home is a big decision. As such, it must be approached with the utmost care. There are pros and cons to both options. Renting proves practical if you haven’t decided yet in terms of long-term plans. For instance, if you haven’t fully made up your mind where you wish to settle for good.
However, rent payments are merely expenses. That is, compared to paying a mortgage for a house you’ll eventually own and whose value will likely appreciate as the years go by. This makes it an investment worth pursuing. If you can afford the latter, it’s the better decision.
3. What Career You Pursue
Ideally, from the moment you left high school, you should have already started looking forward to your financial future. That would have steered you in the direction of a potentially lucrative degree. If it’s too late for that and you’re already part of the workforce, gauge your career’s likelihood to provide you financial growth. Shift careers if you have to and if there are promising leads at your disposal.
The career you pursue dictates your earning capacity. It will also have a direct impact on the social connections you make, which, in turn, will indirectly impact the opportunities you get to keep your finances in order.
4. Whom You Marry
Marrying someone with the same priorities as you do is a good start. Money is one of the biggest things couples fight about, so a couple on the same page regarding their financial plans is a good fit. Yes, love is not a sufficient reason for choosing a partner. You must also be in sync when it comes to life’s most practical and less romantic aspects, such as how to grow your savings.
5. Whether You Get Insured
It’s unfortunate that for many Filipinos, getting insurance is not a top priority. This should not be the case for you. Keep in mind that it’s quite costly to get sick in this country.
In an ideal world, you do not get an illness that requires extensive hospitalization. But what if it happens? Without health insurance, you’re left to your own devices. It won’t take long for whatever you have saved in the bank to be drained by medical expenses. That is why getting health insurance, or life insurance, for that matter, factors into financial literacy. The alternative scenario is simply too risky.
6. When You Start Saving
There’s no such thing as too early when it comes to your savings plan. And it’s never too late either. However, it’s worth noting that the earlier you start saving, the better.
Consider the concept called time value of money (TVM). It basically purports that the money you have now has more value than its same amount in the future thanks to money’s earning capacity today.
For example, if you invest your savings now, that investment will have yielded a considerable profit in a decade or two. That rule of thumb applies regardless of the type of investment, may it be bank products or real estate.
Smart Decisions Today for a Better Tomorrow
In every decision you make now, it’s crucial that all pros and cons are gauged with keen perception. However, do not allow your plans to be stalled. There’s a way to be cautious without being paralyzed by indecision.
To boost your confidence in deciding regarding financial matters, you may reach out to Bancassurance Sales Executives for a virtual appointment. Gain financial literacy now and reap its rewards later.
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