💵 Guide to SAVINGS for BEGINNERS (what, why, how) | Finance from Scratch 💰 #Finance

keep on save it it’s a pretty basic concept that some people struggle with but it’s one of the pillars in personal Finance you might think it’s not

a sexy as investing during your wealth stocks wow but it’s an important building block of financial literacy that everyone needs to learn in order to master managing their money and also because it will serve as a foundation that will set you up for financial success yo what’s up

friends welcome back to an episode of Finance from scratch where we learn Finance

Concepts from scratch guaranteed beginner bubble friendly if you’re new here what’s up managerco today we’re talking about Savings thank you foreign followed this discussion flow we’ll talk about the what the why and the how for this CashNews.co we’ll

discuss what is saving a definition and some important Concepts then we’ll talk about the why why should we save and then once we understand the what in the why let’s talk about taking action how do we actually start saving I’ll share some tips systems and actionable steps that

you can immediately do after watching this CashNews.co but before we start I want to say thanks to growtime for supporting this series and for making this CashNews.co possible go time is a trusted bank here in the Philippines by the Gojo main group they are the same group that’s behind Cebu

Pacific Japanese just snatched Robinson Smalls and Robinson’s land they’re fully licensed by the battle Center Pilipinas and pdic insured up to 500 000 pesos they’re legit one of my favorite bags just because of how easy they’ve made the process of signing up for a bank

account they have kiosks scattered all around the Philippines where you can create your account and print your debit card in less than five minutes they give High Interest Rates high as in about 80 times larger than your regular Savings account Plus for all of you

guys who love to travel they have an ongoing fly free for a year promo where you can win 5 round-trip tickets to both International and domestic destinations promo details are found in the description but we’ll talk more about it later and of course some important disclaimers I am not a

financial advisor I’m just super passionate about personal Finance and I love to share the things that I learned mostly from personal experience in the hopes that it

could help some of you guys understand these complex overwhelming yet important topics but still please don’t forget to do your own research this CashNews.co is not Financial advice form your own opinion so that you can properly decide what to do with the information you get from this

CashNews.co okay nataya G let’s get started first what is saving let’s start with addiction dictionary let’s start with the dictionary definition Savings refers to the money that the person has left over after they subtract out their consumer spending from their

disposable Income uh easy Boba friendly definition Savings is the money you set the site or half left over from any source of Income or inflow after spending in other words before you spent now it’s time for some important Concepts the first

one Savings versus investing there might be some people that interchange these two but they’re different from each other so let’s take some time to differentiate okay Savings we’ve already discussed the definition but Savings is

usually kept in the form of cash or cash equivalents think money in your wallet or money in the bank investing the money as a quick refresh is the act of committing money in order to earn a financial return it’s when you put your money into something the something being an investment vehicle

in order to generate Income or in other words using your money to make you more money so young Savings it involves setting money aside for future use I want to emphasize that my expectations either for your short-term financial goals like sinking funds Gadget

concert ticket Appliance or you’re preparing for unexpected situations perfect example emergency fund this means that for Savings we usually prioritize Liquidity is a low risk and easily accessible environment like a wallet Piggy Bank Savings

account Etc next question why not just save money why don’t you just stop here we’ve discussed this in a previous episode but there are two main reasons why we don’t just save number one we want to preserve the value of our money against Inflation and number two

we ideally want to make our money work for us okay investing investing differs from saving because it’s done with the intention to grow your wealth this means that there’s less expectations and instead the purpose of the money when you invest it is to grow it in order to achieve longer

term financial goals a common examples would be a retirement fund education fund but any fund that you’re trying to grow that you won’t really be touching for several years and you do this by placing it in investment vehicles like fixed Income security stocks equities

Real Estate Crypto Etc these are all riskier than where you would typically put Savings so which one’s better to do anyway save or invest it really

depends on your financial status your priorities and where you’re currently at with your financial Journey it also not neatly exclusive you can do both at the same time but there’s an ideal sequence especially if you’re starting from scratch so that’s save first before you

invest why because you you can’t invest anything if you don’t have leftover funds and it’s just good to have a safety net or like some level of a buffer so that you don’t financially yourself up if ever you suffer losses on your Investments it’s also

cyclical like for example you can build up your emergency fund first stop us start investing whether if you have new financial goals or not deplete you might have certain funds in the paradise mode then you can go back to saving next concept I want to discuss is saving straight so

Savings rate is the percentage of disposable personal Income that is kept rather than spent on consumption or obligations so from this definition we can derive a formula that’s Income minus expense which is the Savings over

your total Income thanks 100 but a million percent sure I wanted to talk about this because the concept of Savings rate can assist you with long-term planning and goals it’s much easier to talk in percentages like say for example I want to maintain a 50

Savings rate for someone who’s earning 50 000 pesos that’s 25 000 30 000 pesos that’s fifteen thousand a very common question how much should we save now what should be the target Savings rate short answer the more the better but of course we also

spend for needs and wants and it’s pretty unrealistic and depressing if you just keep saving the super Curry but about everything and you never let yourself enjoy the money that you have while there’s a lot of different things that we’re saving up for one of the common goal

denominators that we all hopefully have is retirement so as a guideline how much should you aim to save at least 15 of your Income to prepare for retirement Charles Schwab Naman makes a recommendation based on your age like for example if you’re getting started now in your

20s you should save at least 10 to 15 of your pre-tax Income 30 saves 15 to 20 percent early 40s 25 to 35 so if you’re able to do it then great and if not don’t feel so bad just save up what you can it’s really up to you just make incremental progress there are no

hard rules to man saving trade is also a core Concept in the fire movement I’m not going to discuss it with much details to go in a future CashNews.co now but essentially they use math to calculate equivalent working years before you can retire based on your Savings rate they

share this chart so what this means is converted 20 in Savings rate more then you should expect that you’ll be working for at least 37 years before you are able to save enough for retirement nothing 40 Savings rate more that’s 22 years of working

I’m personally aiming to maintain a Savings rate of at least 70 as much as possible because one of the goals that I want to achieve is to be in a position where I can retire early when I’m 30. and Young retire here is not like just completely stop working out but I want

to have the flexibility to be able to afford if I want to take a break or if I just want to enjoy do what I want you know just like the freedom that comes with it and then third reducing expenses and increasing Income essentially increasing your Savings rate I made

a CashNews.co about my personal Finance system where I explain my money railroad how money flows in this system Income going to Savings

investing then spending by structuring it this way it makes it clear that my ultimate goal is to increase how much money flows into my system and then decrease how much money leaves the system here on the top but as much as possible for spending and then here the middle whatever I invest it can go

back to Savings or an Income that’s the ideal goal at least for me and this mindset of maintaining or increasing my Savings rate will also help me combat lifestyle Inflation then you spend more better your

Savings rate is essentially going down next bucket why should we save I have three main arguments based on why I personally do it first is the lesson stress Financial stress Financial anxiety like life itself is already stressful so as much as possible I want to minimize it for

someone like me my Income’s a bit irregular on some months and on other months because there’s a lot of things that I’m doing and major freelancer type I don’t know about you guys but I want stability not chaos just like the Financial Security the

reliability the predictability and yes I have money set aside for this month and also next month in peace of mind I think it’s a great driving factor to be disciplined and saving having Savings also makes it easier to plan out both short-term and long-term goals if

you’re able to stabilize your financial situation in the short term then instead of worrying about things day to day week to week then you can stretch it out and start planning months to months quarter to quarter year to year Savings can also help you optimize for flexibility

like even if you don’t have a Savings goal at the moment that when time comes that you actually have a goal then you’re able to get the Head Start I say you already started saving today next I save because I want to Achieve Financial Freedom like not relying on your

Income or another person to cover all of your expenses no this is when your decisions are not solely tied or dictated by money like for example you’re in a job that you don’t really like or telling it’s starting to affect your health then you can leave because you

have a Savings set aside you can afford to take risk and lastly Savings is a raw material it’s a financial building block having Savings is a prerequisite before you level up in making more advanced personal

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance decision if you don’t have Savings then how can you invest Apple Savings can also afford you to be able to take risk or if you see an

opportunity or you want to start a business having Savings you can use it because as a form of Capital if you don’t have Savings then how can you take advantage of the opportunities when they come now we’ve come to the most exciting

part taking action how do we actually start saving Nicole I have a question when is it the best time to start as soon as possible don’t procrastinate where do you put Savings honestly you can place your Savings stash anywhere but hopefully it’s a

Savings account a Savings account is an interest-bearing deposit account held at a bank or other financial institution so you deposit your money in the bank they keep it safe for you and they kind of use your money to like lend it to other people make money off of

it and as a way to say thank you they give you interest on your Savings I want to talk about the difference between a regular Savings account and a high interest Savings account regular Savings accounts here in the Philippines give

an interest of about 0.0625 per annum okay remember that number personal Loans are back the interest rate starts at about 10 percent it goes as high as 24 30 plus percent housing Loan a month about six to ten percent car Loan five percent depending

on the term this is how much the bank is making money off of the money you deposit with them and this is how much they give you imagine the difference if you’re keeping your money in a regular Savings account Inflation bite your butt hopefully a portion of it

is also in a higher Savings account like Go Time so go time is a bank that can give you a high interest rate of five percent per annum it’s not a promo rate it used to be three percent but they raised it to five percent because of economic factors saving with go time is

simple there’s no extra missions or things that you need to do in order to get this rate everyone gets five percent per annum I’ve had a go time account since they launched and you know it’s one of my favorites because it’s easy straightforward to use and they’re fully

licensed and regulated by the Baka Central and Filipinas and pdic insured up to 500 000 pesos so security wise all good other features that it has is that you can earn go rewards points that you can convert to peso Savings free and cash in cash out you get three free Bank transfers

per week and you can go save accounts you can essentially separate your funds into five interest earning accounts so I personally keep my condo payment fund and want list here but you can also create a vacation fund or if you’re saving up for a new Gadget it’s a segregate they have an

ongoing fly free for a year promo there’s going to be 15 round trip tickets distributed between three winners both new and existing go time users can join this promo promo is until June 30 2023 and the winners will be announced on July 14th but I mean this is just a good bonus if you want to

sign up for a go time account you can download the app or go to the nearest kiosk usually they’re in Robinson superMarkets now here are some actionable steps that you can immediately do

after watching this CashNews.co first determine your why I think everyone has a general understanding that saving is good we all need to save but I think it helps if you can identify why it personally matters to you like it can serve as an anchor for discipline when you know why you’re

personally doing it so you know why can come in the form of a short term or long-term goal Baka you want to save up for a trip you’re saving up for a gadget a concert ticket personally the reason why I save is to work towards Financial Freedom I want to be able to do what I want to do without

worrying about money number two tracking every single pestle and then slowly segue to Budgeting like the ideal is to be able to develop a paying yourself first mindset this means that Savings is a non-negotiable high I know that I always have money that went to

Savings and went to Investments honestly life is hard no matter what you do there’s always some level of difficulty that you’ll face so I think the next best thing that you can do is just to choose your heart like yeah it’s hard to say but

it’s also hard to be stressed about your Finances so just choose which one you want number three intentional spending you know the same time is money when you want to

buy something always think about how much that costs in terms of how much time you had to work in order to afford that 100 best per audience when you’re buying something that’s worth 800 pesos it’s essentially equivalent to one working day is it worth it whatever you’re

buying an additional subset of intentional spending is buying things for life I don’t like buying cheapy pie things that was I have to replace it frequently because I prefer to save up to be able to buy a really good quality item that might be a bit more expensive and another way to practice

intentional spending is by making sinking funds so these are like mini funds that you actually like save up for instead of hoping for the best that you’ll have enough funds or enough Savings set aside sinking funds is really more of you taking control and starting allotting

for your goals intentionally like for example if you say I want to buy a phone you don’t just like hope for the best now in a few months time no you actually make a proactive effort to set aside 1 000 pesos per month so like one of the things that you can use to help you with this is you can

go save featured ego time you can create five go save accounts so one you can have an emergency fund or like a shoppie let’s add the sale of fun in principle is that you make it part of your monthly budget to intentionally allocate money for different things you want to save up for in a

future CashNews.co I will show what I specifically do because a lot of these are major big but it’s hard to imagine this is a super quick overview of course there’s just so many things that we can still talk about in future CashNews.cos share your thoughts and feedback in the comment

section below what do you think about this new series what other topics do you want me to cover are there things that you still want to add to this discussion making these CashNews.cos because I’m working on a lot of things but I hope you guys learned something new thank you guys so much for

watching I’ll see you in the next CashNews.co bye bye