Awful? Ngayon pa lang at 23?
It's never too late to save.
I started saving just last year. I'm over 30 already. I first learned of this stuff of saving, investing and financial freedom when I was around 29 though. It took me a while because I didn't have a stable job already and I had to establish my income in freelancing.
So where should your monthly 3k (or more) go? Tama ang sabi ng iba rito, allot budget for savings first then spend the expenses. Kung kaya mo pang magtira sa expenses, then that's even better. Try mo ring bawasan ang expenses mo sa salon at sa clothes. Just go for what you need muna until you have established your finances.
Sa akin kasi may priority list ako na sinusunod - which many are following din. You might find it helpful. Here it is:
1) pay high-interest debts first. I mean settle your credit card debts and short term high interest personal or salary loans. Hindi kasama ang mga long term loans like that housing loan - consider that payment na lang as a monthly expense.
In your case, pay that laptop loan first. Sa CC pa naman nakaloan kaya ang mahal ng interest. You'd better take a loan next time from PAGIBIG and SSS since they give much lower and reasonable interest rates (I also loaned a badly needed laptop that way almost two years ago).
If possible take out a loan from PAGIBIG and SSS to pay your loaned laptop. Kumbaga you're paying debt with another debt but at an advantage - for you to pay lower interest.
2) establish emergency fund that is covers 3 to 6 months of expenses. Dapat nakasave ito on liquid investments - meaning, you should have easy access to these funds when you need it. Consider savings these emergency funds in a savings (passbook, or if you have that great discipline, ATM), time deposit/CD ladder and SDAs.
Never put that emergency fund in rural banks - like yung plano mo na i-time deposit sa Bank of Makati. They are just too risky (maraming bank runs dito) and they are best used for investing. Even if PDIC promises to pay you, I heard it takes years before you are able to get the amount you've put in.
Better put that money on one of those big three banks right now - BDO, BPI, Metrobank. Even if the interest payment is too low.
You only use these emergency funds when you lose your job, pay hospital bills and any other life and death matters. Laptop repairs, new laptop purchase, house repairs, car breakdown, ... are things that are NOT classified as emergency funds - pagipunan mo ang mga unexpected, non-emergency but important expenses in another bank account. In your case yung P1000 to 2000 for anything na dapat bilhin, yan ang pwede mong ilagay sa unnecessary expenses account mo.
Note that, if you opt not to have HMO or health insurance (you just have Philhealth, like I do and your company doesn't also offer you such) then you will need to increase your emergency funds from 6 months to one year.
Check emergency funds each year, kung applicable pa ang amount. Add more to it kung hindi na. May loss kasi sa inflation ang mga savings, TDs at SDAs.
3) pay for life insurance that you can afford. Get a term life insurance that you need to pay as long as you are working. Since 23 ka pa lang, get a term life insurance that you will be paying until that age that you plan to stop working - say mga 60 years old ka na.
Forget VULs (those life insurances that come with mutual fund investments, even if your agent offers it for the reason that you have to establish your retirement funds) - you'd find na mahal ang premiums ng mga ito.
How much life insurance do you need? - should have the face value of least 5 years of expenses. In your case mga P1M face value. It's also important to get that life insurance at top institutions like Sunlife, Philam life, AXA, etc as long as they are sure payers. Don't over insure though, sayang ang pera.
If you are not really the breadwinner and have no dependents (that is, mouths to feed, or brothers or sisters to send to school, or parents that already depend on you, or even just a spouse or partner) then you may skip this one.
4) get HMO or health insurance. If you opt not to get an HMO or health insurance like me then you will have to build a bigger emergency fund (mga 6 months to a year).
You'd never know kung kailan ka magkakasakit.
At least pay for Philhealth if you do not have one yet. But I still recommend getting a separate HMO or health insurance.
Hindi ako kumuha nito because sa case ko mas magiging magastos sa akin. I have two senior citizens depending on me, at dahil sa age nila hindi na sila pwedeng i-cover ng mga HMO. Kaya, ganun rin, I'd end up saving for their expenses pa rin.
Plus hindi lahat covered ng mga HMOs and health insurances - at least on what I've found so far.
If you find a good HMO/health insurance with very good coverage, let me know.
5) save for retirement. Kahit wala ka pang dependents. Mahirap tumanda ng walang pera.
Sa iyo pa lang, minsan-minsan ka pa nga nakakapagbigay back home - I presume that the fund is for your parents?
There are a lot of expenses after you have retired from work. Bigger electric bills at home, hospital/health expenses, food, etc. If you plan to travel at this age, then allot sufficient budget for it.
Mahirap kung aasa ka pa rin sa kid mo. After all, your newly grown up kid would also struggle din and would most likely have personal finance problems like you are experiencing right now, di ba? Baka tulad mo, minsan-minsan na rin makakapagbigay kung may extra talaga siya.
So how much retirement fund that you need? It should sufficiently cover the years that you think you will still be living - from age 60 to age 80 siguro.
Since you are still young, better invest most of the funds in moderate to aggressive investments: balanced mutual funds, balanced UITF, equity mutual funds, equity UITF, stocks. Huwag sa time deposit, savings at SDAs because these instruments doesn't give interest rates that exceed inflation - may loss ka sa inflation over time when you use these. Also, huwag rin sa rural banks ilagay no matter how high the interest.
6) Investing. When you finally reach this stage, you may say that you have started to be financially free. Dito ka na maglaro sa investing. Dito mo na gawin ang binabalak mong mag-earn sa mga risky rural banks like that Bank of Makati. Put up a business. Invest in stocks that pay out cash dividends, invest in government securities that also pay out dividends... and still learn more ways how to establish passive income.
Yung passive income mo, pwede mong gamitin to buy your wants - a car, a nice gadget, travelling, pampering sa salon, etc.
A long way to go huh? Still it's better to know that you want to save - finally!
Do #1 first, followed by #2. Pwedeng pagsabayin ang #3, 4, 5 and 6.
By the way, avoid loaning money to friends and relatives unless you really have extra money. Hindi ako agree na magpahiram ka ng 2k sa sure payer na friend mo when you are having difficulties with money matters yourself. Dapat wala sa monthly budget mo ang mga pahiram na pera sa mga friends at relatives and never ever touch that emergency funds para lang magpahiram ng pera.
In many cases hindi na bumabalik ang pera napahiram sa ganito. If your sure payer friend suddenly loses her income, or has to spend for emergencies or got into some money trouble, then it's already goodbye to your 2k. Too risky this way.
For relatives, just use the emergency funds lang for yourself, or for your parents and other dependent brothers and sisters (those with no work and no family yet and would depend on you for income).
And for your coin bank - it's good to have that. Ako naman, I keep a coin bank just for gifts and donations. Yung matitira ko sa na-budget kong pera last week, it's gets to the coin bank kahit na paper bills pa - so I don't really select which type of coins and bills to put in. I have accumulated quite a good amount, so I decided to open a bank account for this at another bank away from my primary bank accounts. When time comes, like this December na maraming reregaluhan, I spend part of that amount for those gifts. That way, hindi ako nabibigla sa mga gifting expenses. The fund is untouched until I need to withdraw for those special occasions.
Pag malaki rin ang gifting fund ko, the extra goes back to where it is needed - maybe increase emergency fund, add more to unnecessary expense account, retirement, or just plainly investing it.
wow super help!! I have a question, what is inflation? and is it okay if i get a secure credit card? like put 15k dun kasi i wanted din mag pundar ng gamit.. kasi Im living Alone and I dont have anything sa bahay not even a chair, except sa lalagyan ng damit, mattress, fan at stove na kinuha ko lang sa bahay. plano ko kasi kahit papaano magpundar ng gamit from time to time. like this year I wanna buy kahit tables and chair, washing machine at mini ref for the house yun lang. is it wise? oh expense lang yun kasi pag bumili ako nun tataas din kuryente ko..