My Saving Goal: One Million in Five Years
I started to get serious with my saving plan during the first quarter of 2021. Though I have been a saver ever since but I had to prioritize my children’s needs over anything. I am also helping my Mom who is a senior and my sister who lost a job during the pandemic. I have been doing side hustles for additional income for quite some time. But the earnings that I get is only enough to finance our day-to-day needs.
2021 has been a great year for me even if the whole world is struggling because of Covid-19. This was the year when I got promoted twice in a year. Subsequently, my salary has increased and I was able to provide some of the things that we were just dreaming of having before. However, that was also the year when my son was hospitalized because of lung problem that he acquired due to the nature of his work and maybe because he was not too careful with his health.
The high hospital bill almost drained my savings. I just realized that having a Philhealth is not enough. We still need to get other medical insurance as a form of preparation when things like this happen.
Because of what happened, I became more decided on having a savings. I told myself that if I won’t force myself to save, I won’t be able achieve my goals. That’s when I recalled the financial advice that we should set aside a specific amount before we spend and not the other way around.
In April of 2021, I opened my MP2 or the Modified Pagibig. It’s a savings program offered by Pag-ibig, a government corporation in the Philippines that offers housing loan program and other short term loans to its members.
What exactly is MP2?
Since I am a member of Pagibig and have been a paying regular contribution since 2001, I am allowed to open a Modified Pagibig savings. This is a program that offers a higher dividend as compared to the interest being offered by the local banks in our area.
The program has been around for years but since I have no enough capacity before, I decided to set it aside. Instead, I go with the usual way of saving and some digital savings programs which I can withdraw my money once needed. The difference between MP2 and the regular savings account is that the money is locked for 5 years.
There is an option to have the contribution be deducted to our salary but I didn’t go for that option. I am depositing money whenever I have extra amount.
We may have different ways in order to reach our saving goals. Allow me to share with you my own strategies in order to expedite my saving:
This is the first thing that I did. I made a list of our monthly expenses such as rental, electricity, water, internet bills and make sure that we pay these things before anything else. Not having to pay for the penalty is also a good move to save.
Before going to the market or grocery, we see to it that we check the items we still have and not have so as not to avoid buying items we do not need.
Though we have our mandatory hospitalization program in our country, it is imperative that we set aside a certain portion of our salary into a savings account intended solely for emergency. Ideally, it should be equal to our five month salary.
No matter how small our earnings may be, a small amount every day will eventually become a big amount in a year’s time. Since I am earning some amount from my small business, I am regularly saving at least 2 Dollars every day to my CIMB GSave account. Once I accumulated enough amount, say $20, I would deposit it to my MP2 account. I also deposit some amount whenever I receive any extra fund such as bonuses or honorarium from speaking on various occasions.
I used to buy things whenever I saw something that attracts me. Be it a new bag, dress, shoes or accessories. I also eat out often with friends. But after I created a budget and listed my income and expenses, I decided to control my spending and avoid buying things out of impulse. Yes, I still buy things that I want but I need to take the money from my extra earnings. I also minimize eating out.
I am a great believer of the adage that we should have a multiple sources of income. We should not rely on one source if we really want to accomplish something. My online activities had helped me in terms of finances. Even before that my children were still studying, I could already rely on my online earnings for our daily expenses. Up to this time, I am still doing online activities apart my other offline side hustles and I keep on researching on how to increase my income.
I am aiming to save One Million Pesos before the end of the term of my MP2. However, with my current salary, computing the 10% for 5 years will not reach this amount. I am not sure yet if the dividend will be added as it will form part of the principal amount once compounded. But anyway, I will try my best to minimize my expenses by eliminating some practices that cause me to over spend. I will also continue my writing activities and other side gigs in order to gather more amount.
Suggested Reading: The Power of Compounding
However, if I won’t be able to reach my target amount at the end of the five-year term, Pagibig Fund allows the whole amount to be carried over to a new account. Perhaps, by then, I could already save that amount.
I am saving this amount as an additional fund for my retirement. I also want to enjoy my life during that time. Although I am also expecting retirement benefits from my current employment, it is still better if we have additional fund just the case maybe.
If for any reason, I may be promoted again next year for the higher rank, then I could have another salary adjustment which can be an additional fund.
The content of this post is based on my personal opinion and does not in any way represent the organization I am currently connected with. Moreover, I am not a financial expert and the information I am sharing with you is the product of my own research and ideas.