April 29, 2008

4 Steps to Financial Freedom: ACQUIRE

Posted in 4 Steps to Financial Freedom, saving tips at 4:26 am by kimsan23

Many of us open savings accounts in the hopes of being able to put some money away as life savings. This is where our 3rd step comes in:

STEP 3: ACQUIRE (money into your savings)

Don’t forget to save a fraction of any extra income you may earn. Many people stop at step two– then they start spending (I used to do that a lot)! Reserve a portion of your earning to be acquired into your bank account or time deposit.

Most of the time, people are not able to grow their savings because they always put savings last. Like I mentioned in a previous entry, list savings first and deposit a fixed amount within three days of receiving your salary or payout. This is what many personal finance experts call — PAYING YOURSELF. Always pay your self first before paying bills and allocating money to other expenses.

And how do you ensure that your bank account grows? You must have discipline. Below are some measures I took to ensure my own discipline:

  1. Set a FIXED AMOUNT for savings every payday regardless of other costs. – This helps me stay within my personal budget. I live within my means because of this practice.
  2. Open a passbook account with NO ATM access. – Most of these types of accounts only allow withdrawals at the branch where you opened the account. A good idea if you wanna exercise self control in withdrawing money.
  3. Open a bank account that has penalties for certain withdrawal cycles – I don’t have this type of bank account but my friend does and it works wonders for her.
  4. Lock savings in a time deposit or long term investment – Once you have enough for a time deposit, lock it up! This means that you have acquired enough money to put in several investments. Don’t put all of your money in one account. Learn to distribute.
  5. Open an account for movable savings – This is for savings you can touch if and when you’ll need the money. This way, you do not deprive yourself of money for things like travel, car/house maintenance or repairs, financial emergencies and the like. At the same time, you still get to maintain a budgeted life-savings account.

In my case, instead of adding any excess money to the next budget, I just put it into my moving savings account for future use.

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3 Comments »

  1. PinoyRak said,

    Hi there kimsan! You have a nice blog here, very informative and useful. 😀 I think you should buy a domain for your blog and host it if you’re really serious about making that one million mark. Just a word of advice though. See you around.

  2. kimsan23 said,

    Hi PinoyRak! I like your blog too! With regard to getting a domain, domains cost a bit so I need to weigh the investments vs. the ROI first. I am seriously considering it though. Thanks for the advice!

  3. Yeah I do suggest get your own domain. I recently got mine and a self-hosted wordpress blog. And I paid just 4K to a web developer with all the designs, the settings, the domain and hosting. =)


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