In the recently concluded 2019 Financial Inclusion Survey, the Bangko Sentral ng Pilipinas found that Filipinos still have a long way to go in terms of financial literacy. More than half of Filipinos have no savings, and those who do, have no idea how to make the most of their funds. The bright side is that these findings have strengthened the push for financial education programs for Filipinos.
With so many Filipinos struggling to understand basic financial concepts, financial advisors serve as both personal finance educators and guides for their clients in preparing them for major financial events. Fortunately, they are ready, willing, and more than able.
Sun Life financial advisor Rallph Jhan Aaronne L. Monzon, 2020-2021 Macaulay Club Qualifier, shares some money saving habits that can lead to financial freedom.
For young professionals who are just starting on their journey to financial freedom, Monzon stresses the importance of these three habits: creating a monthly, quarterly, and annual budget; practicing delayed gratification; and ensuring that your lifestyle is commensurate to your income flow.
“We should spend within the income we earn or live within our means. It is easier said than done,” he says, “but to successfully achieve financial freedom earlier, we should not take immediate rewards by buying luxury things.”
Monzon explains that it is better to spend only on what we need and save or invest the rest. “After all,” he points out, “we are still young and the road ahead of us is long.”
On the other hand, for people who are already preparing for the end of their professional lives, Monzon stresses the need to build habits around the following: planning for estate taxes and maximizing government benefits (SSS, Philhealth and OSCA); rebalancing your investment portfolio to fit your risk profile; and writing your will.
“They have been working throughout their life. Before retiring, they should make sure that all expected expenses like estate taxes are well-planned. The best way is to cover through a life insurance policy,” he says.
“Since there will be no active income, would be retirees should manage and maximize the government benefits due them. They must shift their investment portfolios to be more risk averse and preserve the capital of their investment. And because they love their children and grandchildren, a will has to be prepared to avoid any conflict and misunderstanding among the heirs.”
Sun Life can help both young and older professionals prepare for a financially stable future by providing a financial plan detailing set milestones and targets, says Monzon. “Our Money for Life helps you create a personalized financial plan that suits every stage of your life by recommending appropriate investment funds and educating clients on finance and the market.”
Monzon follows his own advice. “I have been practicing tracking my income and expenses since my elementary days. It truly helps,” he says. “Literally every centavo that comes in and out is accounted for. To fully monitor my income and expenses, I have a worksheet to record them.”
And how does he manage to stick to a budget and live within one’s means? Monzon leaves us with this classic: “I don’t subscribe to peer pressure to fit in.”
Rallph Jhan Aaronne L. Monzon is an Executive Vice President of the 2020 – 2021 Macaulay Club.
For more information and inquiries, visit the Sun Life website at https://www.sunlife.com.ph/en/.
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