How to Budget for the Essentials

September 13, 2019

Budgeting is a process of creating a plan for your money so that you can prioritize your spending on more necessary things. This makes it easier for you to build your wealth and achieve your financial goals. No matter where you are in your financial journey, taking the first step will turn your finances around. If you don’t know how to begin, you can start by stacking all the receipts and categorizing them into groceries, restaurants, personal care, loans/credit card payments, utilities and/or education so you know how much you’re spending on each category.

In a survey from the Philippine Statistics Authority, it says that about 67.6 percent of employed persons in the Philippines are mostly from 15 to 34 age group or also known as the millennials.

Millennials’ spending habits are focused on comforts and conveniences such as coffee, milk tea, latest cellphones or gadgets, clothing, cab fare, groceries, hobbies or travel. It’s fine to spend on these things as long as you also know how to budget accordingly.

Tracking your income is the key. If you’re earning lesser than your expenses then, it’s either you find ways to increase your income to afford your wants or lower down your expenses. The initial step may be the hardest part but it’s doable as long as you put your mind to it, you’re healthy and have your regular job, and you know your goals.

To help you make the best use of your money, here are some points to consider when budgeting for the essentials.

Emergency Fund. This keeps you financially on track when an emergency comes up. Every person’s emergency fund depends on his or her income and lifestyle. It would be ideal to set aside at least 10% of your income or have a targeted amount that you want to achieve by the end of the year, let’s say, Php25,000. If you are single and a young professional, having this amount in your savings account could make all the difference. Consistency is key, so make sure that you will set aside a portion of your earnings to achieve your targeted amount every payday.

Home. Planning for your future should begin as soon as you receive your first paycheck. Continuous growth and being able to keep a regular and stable job can give you a lot of privileges including the possibility of owning your own home through Pag-ibig Fund.

Pagibig fund is a government-owned corporation that offers housing loan to its members payable for up to 30 years. All full-time private and government workers are eligible to become members.

Real estate businesses in the Philippines are becoming booming because of the increasing number Chinese investors, OFWs and business processing outsourcing and IT, so now is the right time to invest in a condo or residential property. Affordable house and lots range from Php3,000 to Php5,000 per month, depending on your preferred location. Just do your research and make comparisons about the property that you want to purchase.

Retirement. How do you imagine yourself 30-40 years from now? Retirement is something that you need to plan ahead for and think about seriously. The earlier you start preparing for it, the more comfortable and enjoyable your life would be in your 60’s.

Being a full-time regular employee in the Philippines, you are mandated by law to become a Social Security System or SSS member. You may visit their website for information on sss registration, sss number or how to get an sss id. SSS provides cash benefits for maternity, sickness and death. They also grant loans for personal or emergency purposes and gives you a monthly pension, from Php3,000 up to Php10,000 depending on the contributions you made, when you retire. So, the longer you stay employed, the higher the savings you create for your SSS pension plan. But you have to understand that relying on your pension alone wouldn’t be sufficient to support your basic needs including medicine that’s why it is vital to start saving as early as now.

Insurance. Stress is part of every person’s life and it can cause people to get ill or even hospitalized. Even though local full-time employees have Philhealth coverage, it can only cover up to a certain amount of your medical bill. Although most companies nowadays have health insurance or HMO for their employees, as one of their benefits. This only pay for consultation and hospitalization expenses which means that after you get discharged from a hospital and while recuperating at home, you still have bills to pay and medicines to buy which of course isn’t covered anymore.

That is why Paramount insurance designed a health product that eases your financial worries should you become ill and hospitalized. Hospital Income Benefit Plan is for individuals, couples or family with eligible age from 20 to 64 years old which provides daily cash assistance for regular and dread disease confinements plus another cash assistance for 30 days confinement or more. These cash benefits replace your lost income due to confinement and give you the freedom to decide where to spend them.

Hospital Income Benefit Plan is one of the best health insurance in the Philippines with a health insurance premium of as low as Php69 for an individual account aged 20 to 64 years old. You may visit Paramount Direct’s website if you wish to get a quote for couple or family coverage or click the apply button below.

Following a budget is an important part of having a secured financial future. Do it now!