Saturday, March 13, 2010

GENERAL RULE : SAVING IS IMPORTANT

Posted by pucca at 5:46 PM



Remember the good old days when Mom and Dad would remind us to drop a coin or two in our piggy banks?


Gone are those days right?




 
     Today, we are in a continious and viscious cycle of borrowing money and then working our way to be able to pay for our debts. This should not be the case. After receiving our salaries,we pay our bills, watch a movie, buy stuffs, dine out and save whatever is left. This should not be the case.
     Remember how the Egyptians survived the seven long years of drought? God told, Jose, Abraham's son and adviser of the Pharaoh, to save 20 percent of their harvest. The Egyptians followed and cautiously saved one fitfh of their harvest for seven years. Those seven years proved to be the most bountiful years in Egypt and its neighboring countries, but still, Egypt was very tolerant in following Jose's advice. After the seven years of bountiful harvest, drought came. People around Egypt managed to survive for the first year of drought. But the great drought was bound to last for seven years. Famine was already killing people, but ot in Egypt. Egypt was consuming their saved harvest. Egypt managed to survive the seven year drought and had also managed to sell and trade food with other neighboring countries.
     We should follow this rule, after receiving our salaries, we should take away 10-20% from it and live with what is left. But how can we survive with the remaining 80%? We should find other sources of income and we can start living simply. We should atleast save six time our monthly salaries for our emergeny fund. The recession is still around the corner, so we can never be confident with our jobs. We may get sick, relocate or may have unplanned expenses. It is but better to have an emergency fund for this reasons. After providing an emergency fund, we should start saving for our retirement fund.
     I'm young, I won't be retiring anytime soon. Take this example. Say you retire at 50. You would be spending atleast $5 for food, $10 for medications and supplements, another $10 for water and electricity and another $5 for unplanned and unexpected expenses everyday of the ramaining days of your life. Say you live until the glorious age of 75. Thirty dollars per day multiplied by 365 days multiplied by 25 years would be equal to $240,900 or 10,840,500 Philippine peso. How and where would you get this amount of money? That's why we really need to save for our retirement fund, unless you would and could could still work to earn a living at that age.

Did you guys get the picture?

Savings are really important. So start saving now.

 

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