basic financial goals

Each of us would have a unique plan that would be aligned with our own personal financial goals.

Determine the reason why you want these goals. For whom do you intend to do this goal? Doing your financial goal is a responsibility and obligation that you owe to yourself and your family.

For yourself, you’ll need to plan for retirement. The fund should take the place of the income you’ll no longer get from your present job; or as an entrepreneur, your health might not be perfect anymore to maximize your resources.

But living too long would require you to set a bigger fund, and that inflation goes on and on. Your social- security benefit, as you know, cannot really help you solve your retirement needs.

For your family, you’ll need to provide basic necessities, new home project, travel, emergency funds for medical bills or saving to protect you from sudden loss of income.

For your children, you’ll need to provide the best education for them, and prepare for the unavoidable 10- percent to 15-percent tuition increase. Today’s current P100,000 annual tuition with 10-percent annual increase in  cost of a one-year-old child entering college at age 16 and getting a five-year course would mean:

Total tuition for one child age 1 today is P2,548,000.

Learn how to save a specific amount

Most of the time you may ask yourself, “How can I save money when I can barely make ends meet?”

Knowing how much to save will make you realize if you’re on deficit or not.

List your savings as part of your expense in your budget plan, or, shall we say, “pay yourself first”—this common idea will be your first step to really achieve your saving program.

You can also have an automatic salary deduction saving program which you can arrange with your employer.

Cutting unnecessary expenses

Cut unnecessary expenses by packing your own lunch for work, avoiding excessive texting or cell-phone calls, drinking 3-in-1 coffee against patronizing coffee shops and other things that you can work on to create savings ideally at least 10 percent of your income.

Create an emergency fund amounting to at least six months of your average monthly expense. I would recommend that you should not use your regular savings for emergencies. Remember that you are saving because you have a specific goal aligned to it.

When your regular savings is finally set, then allow your savings to use compound interest. The earlier you start to save, the greater the result of your saving through compounded interest. Compound interest is the interest earned on reinvested interest plus the original amount invested.

Another advice: Don’t put your savings below the inflation rate, and spread your investments.

Creating an income to achieve your financial goal

To those who say they can’t afford to save, then your only option is to create another income for yourself. Remember that suffering is optional.

You may ask yourself the following questions in your journey to financial freedom:

* What are my concerns in reaching my goals?

* How committed am I in getting the things I want?

* When would I want to attain my specific financial goals?

* How would I like to achieve them?

You may also want to add value to these goals:

* I am able to fulfill my responsibility for myself and for the financial security of my family.

* I am a loving father and husband (mother or wife).

* I can do it.

* I have peace of mind.

* I love myself and my family.

The only way to succeed is to have a clear picture of your short- and long-term financial goals and commit 100 percent of yourself to doing them. Justifying reasons of not getting them only shows your lack of faith in your own power.

Remember, though, that the journey of a thousand miles begins with a single step. But I leave you this question: Would you take your first one now?

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Macaspac is a financial consultant and has been dealing with personal financial planning and risk-management services. He gives financial training and consultations to entrepreneurs and employees, as well. You can visit his personal web site for financial advice at www.grand-holdings.com. Macaspac is the lead consultant of Grand Holdings Financials and Risk Management Services, and he is also affiliated with the Pioneer Group. You can e-mail him at engrmac@grand-holdings.com.

Join the 11th RFP Program (July 5 to August 23, 2008). Visit www.rfp-philippines.com or inquire at info@rfp-philippines.com/Tel. 634-2204.

If the news reports are accurate, President Arroyo will meet with Manuel Lopez, Manila Electric Co. (Meralco) chairman and CEO, tomorrow in Bohol amid the raging controversy over high electricity rates.

Each of us would have a unique plan that would be aligned with our own personal financial goals.

Determine the reason why you want these goals. For whom do you intend to do this goal? Doing your financial goal is a responsibility and obligation that you owe to yourself and your family.

Most promdis love their home provinces and hometowns. They keep on longing to go back to their lupang tinubuan. Memories of childhood and early youth grow more beautiful and precious with the years.

Through the Looking Glass: Sideshows and spurned solutions

This sideshow starring a state pension fund and the Manila Electric Co. (Meralco) is not about lowering rates and instilling competent management. At least not if the standards imposed on Caesar’s wife were applied.

Coast-to-Coast: Power and rice; why Bello?

That reduced power rates, stable rice prices and, yes, increased government revenues are on top of the Arroyo administration’s agenda serves to underscore the fact that it is bent on resolving the real, hard issues affecting our people, unlike some legislators and their self-styled “pro-people” cohorts who cannot seem to accept that the nation has moved on and has had enough of their contrived “search for truth” crusade centered on the NBN-ZTE inquiry.

The Entrepreneur: Beating the oil crisis

I DISCUSSED in two previous columns the opportunities arising from the food crisis, particularly in developing agriculture as an engine of economic growth. I don’t know how many people have noticed it, but there’s a pleasant change going on in the culture of doing business.

Reflections from the Mirror: ‘Pari delicto’?

Before, it was a bold, “If you like it, you buy it!” Now it’s an entirely different tune, like they won’t give up the Manila Electric Co. (Meralco) without a fight.