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When I first read about ‘financial freedom,’ it was the time that I had to learn how to improve my financial intelligence, primarily on how to create a budget and save more. (Ten years ago, I was earning so small that I couldn't even give my parents anything, not even a hundred pesos!)

I also believe that having some knowledge about money is very important especially for Overseas Filipinos like me. After all, we are on a foreign land, first and foremost, to earn money.

    Financial freedom... or comfort

    These two words, financial freedom, are a dream for many Filipinos. But I think not many Filipinos have heard of it, ironically.

    However, I find the word 'freedom' to be a bit illusive. I like the term 'comfort' better. But for the sake of this post, let's stick with 'freedom'.

    Freedom ---being able to do anything you want as you please. Who doesn't want to be free? Unfortunately, not so many Filipinos are interested in learning more about the ‘financial’ part. Many wants to be free but the thought of having to deal with finances (counting money, listing down expenses, remembering and paying debts!) is somewhat scary or even a taboo for some.

    Why learn about money

    Attaining financial freedom through financial literacy could mean that you are free from being unnecessarily stressed about money, especially in making decisions that involve your finances. Your knowledge about money makes it easier for you to decide anything related to money. It's also a mindset.

    It's not that you have reached the point that you have a lot of money, but you no longer let your finances control you; it's you having control over your money. It is a long journey and it doesn’t happen overnight.

    Setting goals to be financially comfortable

    There is no one-size-fits-all method to financial freedom or comfort. We all have different goals, needs, wants, and level of contentment.

    Some would involve fewer principles or steps. A set of guidelines might work for me and not for you, or doing one step first might be better for you. You have to study each step and see which ones apply for you and which ones to prioritize.

    Briefly, these are the most common financial goals that pave the path to be financially free:

    1. Monitor your finances

    2. Get out of debt

    3. Budget

    4. Create an Emergency Fund

    5. Regular savings for easy to reach cash

    6. Get Insurance

    7. Increase Cash Flow

    8. Investments and Retirement Fund

    9. Enjoy

    10. Share

    I arranged this according to experience or at least on how I think I should have done it. Again, there is no one right way to do it. Some would put debt elimination on the top as the first step but, practically, it would be impossible to pay any debt if you don’t know where your money is going.

    1. Monitor your finances

    In my first job in the Philippines, I was earning a salary that was just a little bit above the minimum wage. Worse, tax and other deductions made it even smaller.

    I reached the point that I had to write down literally every peso I spent. That’s how I started and developed my habit of monitoring my expenses. At the end of each day or when I had the chance to, I would write down every expense I had. Every single peso.

    I carried that habit as an OFW and developed a spreadsheet where I logged every single halala (the centavo equivalent of Philippine peso in Saudi riyals) and did it for years, religiously!

    Do this not to limit yourself or enforce strict spending habits right away. You have to really know where you're spending your money. Track or monitor your expenses on a weekly or monthly basis and see the pattern.

    2. Get out of debt

    Once you’re seeing your finances – how much you earn and how much you spend (on basic needs), identify all of your debts and prioritize saving certain amount every salary to pay off your debts. And from this point on, avoid having any form of debts, no matter how small.

    Set aside a small part of your income and dedicate it to paying any debt. Even if it means having no savings yet.

    There's a saying that you should pay yourself first by prioritizing saving. When you're paying your debts you are paying yourself first (only to another person) by liberating yourself from being enslaved by the person you owe money to.

    3. Budget

    How do you budget? After every cut-off or payday, prepare a budget based on your 'net' income.

    Some say that you should save first then spend the rest. It's a tricky advice especially when there's very little money to work with, or when you have debts to pay.

    Income - Expenses = Savings or Pay debts

    If you're already earning far more than your monthly expenses, saving first is a sound advice.

    Income - Savings = Expenses

    Write down your basic expenses. If you have been monitoring your expense as advised above, budgeting should be a lot easier now. You would now have a close estimate budget for your basic needs. Foods, transportation, and monthly utility bills are among the most important expenses in your budget.

    You have to discipline yourself not to include any form of 'wants' or recreation yet if you're paying debts. After writing down your basic needs, allocate the remaining for paying debts. You should clear them fast. (Hope you're seeing the emphasis I've given to clearing debts.)

    Once you’ve managed your finances by doing the above steps, you would now have the capability to determine if there are expenses you can reduce or totally eliminate. Also, you would know how much you can save, or better, if you already can set a fixed percentage of money to be saved monthly.

    4. Create an Emergency Fund

    Is this my savings? Uhm, technically yes, but it’s a special kind of savings.

    Emergency fund is a form of savings that you don’t spend other than emergencies like health, calamities, a pandemic like what the world is experiencing now, or if you lost your job (either planned or unplanned).

    How much? Some suggest to save 3 up to 6 months of your monthly expenses. So, if you spend around P20,000 a month, focus on building up P60,000 to P120,000 as your emergency fund.

    Remember: you are not supposed to touch this money. Deposit it in a bank where it will be easy to withdraw but don't put it on a time deposit, not even a paluwagan.

    If possible, keep a separate bank account for your Emergency Fund. 

    Many emergencies are unforeseeable and based on your circumstances, you can save simultaneously for an Emergency Fund and an easy to reach cash.

    5. Regular savings for easy to reach cash

    You may want to put 60% of your monthly savings (income minus expenses) to the Emergency Fund and 40% to your savings account. That way, you will complete your Emergency Fund goal faster while also having another reserved cash.

    Call this your regular savings which you can use for non-emergency expenses which are outside your monthly budget, or treat it as fund pool for minor, short-term goals, like, if you plan to buy a present for someone or an appliances you've been wanting to buy, or for a house renovation.

    6. Get insurance

    Once you’ve sorted out your budget and have completed your Emergency Fund, and are now building up your regular savings, it is now time to open and fund an insurance.

    Some insurance offer some form of investment but I personally find them a bit tricky to comprehend and aside from that, I find the commissions and charges too much. Insurance will protect you (and your beneficiaries) in case you are met with some unfortunate event like a serious sickness or untimely death.

    The primary types of insurance are protection (life), education, health, and retirement.

    I am just comfortable knowing I have some insurance, but to be honest, I don't think about it and I don't intend to use it.


    7. Increase Cash Flow

    Basically, cash flow means the money coming in and out of a business. But it also applies to personal finance.

    If this can be done earlier, the better. It simply means making the money coming into your pocket bigger and/or faster. How?

    Get a new higher paying job or by asking for a reasonable raise.

    Create other sources of income like a business or a sideline.

    Monetize your talent or a hobby.

    Reduce expenses (without impacting your lifestyle negatively).

    8. Investments and Retirement Fund

    The two main purpose of investing are (1) capital preservation and (2) growing money passively.

    Putting your money in a savings account or a time deposit will make your money shrink in value in the long run due to inflation. What this means is that your money loses value as years go by. What your money can buy today will not be able to many years from now.

    Investing your money for the long term has better chance of beating inflation than keeping it in a bank.

    Also, investing can become a source of additional income but that needs a lot of capital. People invest and trade (buy and sell) stocks or shares of companies and earn. Trading the stock market is not easy and requires a lot of studying.

    There are many other forms of investments such as UITF (Unit Investment Trust Funds), mutual funds, and the VUL (Valuable Universal Life Insurance) which is more of an insurance with investment aspect.

    Investments are meant to be funded as long as you can work actively and used for retirement. Though, if you met your retirement fund much earlier, then you can definitely take some profits off your portfolio and make it as a source of income too.

    Edit: When this post was first written I was already into trading but I wasn't yet profitable and was still finding my niche and system. In May of 2021, I enrolled in a trading course called the Technical Intensive by the ZFT which opened up a whole new chapter in my life. I learned a lot from that course, but it's just starting. I hope to write about this in the future. 

    9. Enjoy

    What you reap, you sow. You work hard not only to put your money in a keep. You must also enjoy the fruits of your labor.

    I believe in 'delayed gratification' but I also don't deprive myself from time to time of some pleasures. The key is to plan for it. Could be in a form of travel, a big purchase, or as simple as a weekend food trip. Whatever it is, be sure you save up for it and that the money won't come from your emergency fund.

    10. Share

    Last in the list but it doesn't mean that you will only start to share when you've completed the above goals. You give when you can as long as it doesn't affect your financial state negatively. Of course, it makes sense that you can't help others financially when you yourself are financially unstable.

    You may want to do tithes, donate to a charity regularly, or sponsor a child's study. Helping your old parents financially or funding a sibling's study is also a form of giving back.

    Don't expect anything in return. Share because you want to help.


    Money is just a tool but it enables a lot of things.

    As we go along the journey to financial freedom, we can also share the knowledge and experience we’ve had to others.

    Inspire or encourage others. But don’t rub it in as money is a sensitive topic to some people, especially now that many are facing difficulties and struggling to make ends meet. Also, we all have different timelines, circumstances, and goals in life.

    I am far away from attaining financial comfort, but I don’t see it as an end goal. I still make terrible financial decisions. These are just my guide to improve myself financially, and on how I can be helpful to others.

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