Where to put your money? (Updated)
In the Philippines, 98% of the people live from paycheck to paycheck. We have become slaves to our paycheck. We let money dictate how we live our lives. It should be the other way around. Dictate what your money should be doing for you.
Where did we put our money?
Step 1: Pay off your debt – since we were debt free, we went to step 2
– pay off your credit card debt, student loan, auto loan. It would be great to start your marriage debt free! It removes the burden for you and your wife.
Step 2. We opened an emergency fund account.
An emergency fund is liquid money that you promise not to touch unless emergency arises like lost of a job, hospitalization and window shopping. Remove the last option! A basic emergency fund would cover your projected 3 months living expenses. So if you have a monthly living expense of P40,000 you must have at least P120,000 in the bank. Some people I know stored upto 6 months of living expense in their emergency fund.
3. We bought essential home appliances.
4. Bought some insurance. – Will be expounding this on my book coming out this November.
5. Made some investments – low risk and high risk investments.
I did make some dumb investment decisions again but have learned from financial coach Randell Tiongson. You can read his thoughts on this blog.
6. Building our emergency fund to one year.
7. Set up a retirement fund.
– mutual funds, stocks, or business investments are some of the options.
Principles I have practiced in my personal finance I have derived from Dave Ramsey’s Book The Total Money Makeover: A Proven Plan for Financial Fitness (3rd Edition Revised and Updated) and it has been a great ride for Thammie and I as we practice in faith to save up and build up our finances the past 7 years.
You can buy Dave Ramsey’s The Total Money Makeover: A Proven Plan for Financial Fitness (3rd Edition Revised and Updated) for only $9.50 at Amazon Kindle. This is a steal!!!! Original price is at $24.99.