Finance 1.3.0: Planning for Financial Freedom

If you fail to plan, then you are planning to fail. That usual cliché says it all. Who would like to fail? I mean, who on his or her right mind want to fail? So, if you have no plans regarding your finance, it’s time to make one. Start with the long-term goal (let’s call it the VISION), then the short-term goal (let’s call it the MISSION). It will be easier to go on to details after these (let’s call these details the OBJECTIVES).

VISION: TO BE ABLE TO ATTAIN FINANCIAL FREEDOM. Some financial educators might argue that there is still financial abundance, but I guess my mentality is not there yet. Make the vision realistic and doable.

MISSION. As of this writing, I am considering four layers to accomplish – and this FINANCIAL CHRONICLE series will rely on this four layers. I learn the concept from different people, so I will just use the term I am comfortable with. These are (1) INCREASE FUNDS, (2) MANAGE DEBTS, (3) SAVE AND INVEST, and (4) HAVE FINANCIAL PROTECTION.

Since objectives are detailed steps, I will be covering these on separate sections – depending on my MISSIONS.

This Chronicle is made public, not just to relate my experiences, but also to receive criticisms from others. At least, if I still have dangerous mentality, it will be corrected and may help others as well. By the way, this is Sep.

Finance 1.2.0: Exposing the Bad Financial Decision

Bad financial decision roots from misinformation. We gather it through our society – be it in the family setting, the school, even the entire nation through culture and traditions. What can you observe from our society? Some financial educators mentioned what is called “poor mentality” where financial management is given the least importance. In my case, what are the contributing factors, then, to my bad financial decision? I will consider just three.

CONTENTMENT AS I VIEW IT BEFORE. Before, contentment means being happy with what you have. There is no need to work harder or smarter. Apply for a job, receive your salary and save if a penny remains. It is okay not to have sufficient funds for the future – you don’t have to worry for it. BE CONTENTED WITH WHAT YOU HAVE RIGHT NOW. What’s the danger? No funds in case of emergency.

MONEY IS NOT THAT IMPORTANT. I had this mentality that you can be happy with less money – at times, I still find it true. But, when there are more reasons to feel the otherwise, I know that money can do something. My belief on this also root from my experience that fortunate things happen when I need money. I managed to finish college through financial assistance – not from parents nor from relatives. Likewise, I survived three years after college even with very small amount on my bank account. Never did I realized before that learning about money is VERY, VERY IMPORTANT.

WORK FOR JUST WHAT YOU NEED. Relative to contentment, I also did not tried harder earning funds. I let many opportunities pass just because I thought I will not be needing much soon. I should have experience working in a retail industry, in banks, restaurant and others that should have improved my skills and add up to my value – and the value that I can provide others. But… yeah, I DID NOT.

The mistake, or mistakes?

I DID NOT START EARNING EARLY. Except for what I did when I am schooling – after graduating – I did not forced myself to earn. I did not exert effort to learn anymore. I thought I was smart enough to live the CONTENTED life I aspire. I should be financially free right now if I started early. Well, the next one is a must.

I DID NOT INVEST ON FINANCIAL LITERACY. My course touches some of it – making me feel stupid, tanga. Is it correct? Tanga means doing things in contrast to what you should know. I know about how interest works. I know how time and money can work together. But, I think, I did not learn because learning means changing behaviors – and my behavior towards money did not.

I LET MY FUND SLEEP (OR DEAD) ON SAVINGS ACCOUNT. Related to my being tanga, I just deposited the money that I am able to spare from expenses to be on my savings account. Aside from emergency expenses, inflation also eats up my savings – very, very fast. In the Philippines where I live, there is an estimated 3-5% inflation rate - this September and October 2018 it even reached 6.7%. The small savings went even smaller in value.

I RELIED ON MIRACLE. Just like what I narrated, I seem to have something to get what I need. So, I thought, it will be the same over and over. I thought, there is a financial hero coming in for a help – it could be that one who gave educational assistance or through hand-me downs from kind people. It was proven wrong when financial crisis kicks in, it was disastrous.

Looking back, I blame myself for not doing the good decision. Again, I am still clueless why I am still sane (or am I not?). Well, there are some cases I talk to myself. In some occasion, I wake up at 2AM and tears just… you-know-what, sometimes for no reason, most of the time finding out the reason makes it worse. Include those problems that are non-financial, then, yes, it’s easy to go insane. But, shifting my attention to the brighter side, if you consider it is, I think I know better now. It’s inevitable to think what could have been or what should I have done. But, I guess, it’s better to think about what to do, now – now that I made a bad decision. I remember that one person who told me to capitalize on that experience to be better.

I will be covering that on the next section. Here, on my Chronicles.

Finance 1.1.0: The Bad Financial Decision, Made Obvious

The steep decrease on August 2016 was obviously the disastrous event that happened to me, financially. However, I should take a clue from slow decrease from January 2016.

Sometimes, you will realize that something is bad if the result is bad, as well. That was just what happened.

Before my eighth year on my job as a five-month-period contractual employee, it was made known that contractual employees will not be renewed. Regularization is dependent on possessing a masters’ degree. I have difficulty filling in my time-table. The work environment became so toxic, I mean very busy, that I can’t bear – regular workload, extension activities, other clerical work and obtaining a masters’ degree. To worsen, a family member got critically ill. As a not-so-good, yet not-so-bad son, I have to help financially. Just like most people… yes, I was caught unprepared. The money I had saved almost disappeared in a snap – that’s not an exaggeration. It happened when we settle the hospital bill. It happens in just one night, since we wanted our family member to be discharged from the hospital to avoid higher hospital bill. Since it is a critical illness, the expenses did not stopped there. Is there any help? Our relatives, likewise, have their own expenses. They also get sick. Somehow, they handed some amount to help. So, I resort to applying for loans, try to sell some items and ask some people to let me resell their items. The experience clearly defined what being broke means. I contained all of those and I am not sure how I made it – I am not even sure of my sanity.

Did you finally spot the bad financial decision? If you are still clueless, I will cover it on the next section. Piece by piece. This is my financial Chronicle and I am Sep, by the way.

You may also read the mirror blog at @sepchronicles