Setting Financial Goals

At 31, suddenly found myself alone in having to support my child. Not to mention the credit card debt and other financial commitments I had. My bank account is not ready. We lived pay check through pay check. I was afraid and unsure if I would be able to fulfill my financial needs with just a single income. Budget was cut into half. I needed to reassess how I handle my finances but did not know where to start. How?

Sometimes, when you ask enough, the universe answers you. I got an invite to attend the RI5E Towards Money for Life workshop with Aya Laraya of Pesos and Sense. It is a series of six monthly workshops that discuss proper money management for all life stages. The first topic last month was goal setting. Exactly where I'm at on my new financial journey. I got to ask myself again, where do I start?

In a 2012 Reader's Digest Article by Ryan Ong titled Wealth Wisdom of The Ages, he said "How you spend, save or invest your money should change with your needs." So what do I need? If you asked me last year, I'd say I need to save up for down payment for my own house, cut off my credit card, continue saving up for an emergency fund, my daughter's educational fund, and my retirement fund. This somehow fits the financial goals of my age bracket to grow my money, as stated on the article. But can I achieve them now?

Coach Aya left us with a couple of tasks - track your expenses religiously for at least a week, hopefully for a month; and write your short and long term goals. It took me a month to answer that hard question: what are my new financial goals?

Tracking my finances was easy. I used to have an excel file where at the start of the month, I will write my fixed expenses and tick them off as I pay them. But I never took note of the P8 jeepney fare, or the P20 I handed out to the kid knocking on my Uber ride. As pointed out during the workshop, those small change can accumulate to hundreds, or thousands even. After the workshop, I started tracking every cent I spend using a mobile App. I'm using Wally+ which is a free Android App. It helps me easily see an overview of my expenses, where I spend my money, and control my budget. At the end of the month, I was surprised by how much I spend on "wants" and upgrades (yes, that biggie meal from Wendy's) and other variable expenses. It got to as much as 20% of my income. Most of it was spent eating out and buying lunch at work.

When I looked at the expense summary, even before the month ended I could see that I had more cash flow than I feel I have. It got me thinking if last year's goals were really as farfetched as I thought they were. So I continued doing my workshop homework. Here's what I wrote:

Short term goals: Get my own car, help fund renovation for the family house, and pay off the credit card debt.

Long term goals: Save for educational/retirement fund, buy my own house, and get enough capital for our own cafe/bakery.

I'll discuss the details of how I came up with these goals in the next posts. But notice how similar they are with last year's goal? With less money coming in, where will I get the money for all these? Simple - from the savings I'm starting now. And yes, I did the math and it's doable, even with less cash inflow. The key word there is NOW. 

Because I am already tracking my expenses, I realized that I spend way less than before and I can even get those expenses lower. I am not sharing payments for house and utilities anymore. No more car payments and I go out less. Finally, I'm not overspending on my daughter's clothes either. My sisters make sure of that. My salary that I could barely stretch until the next payday now seems more.

In addition, I have decided to keep my brownie business and make it grow. I read somewhere that there are times when cutting down on your expenses will never be enough. Often, the best approach is to look for ways to increase that budget. Who would have thought I could earn as much as P2000 per week baking Brownies. I even had to opt out of some orders because I just don't have the energy and time to bake them with love anymore.

So what am I saying here? Most of the time, we get overwhelmed by changes and trials that we have and we end up giving up on our goals. But if we take time and look into where we really are, there will always be a way to keep those goals, achieve them, and even grow you money for more. There will always be money to spend, save, and invest. Track your expenses and compare it with what you earn. I bet you there will be more than enough for you to start achieving your goals. 
Start now. Start small. Start with a peso. Just start. 

As I go through this financial journey, I will share what I learn from the workshop and how I apply it to achieving my goals. Wish me great success please!




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