The first year we moved out of our parent’s house I read a book, Wealth within Your Reach, authored by Francisco Colayco. It was a book about managing finances for dummies. Since I was a young wife back then who doesn’t know anything about finances I bought books one and two and read both from cover to cover.
With the help of that book, I learned the importance of paying yourself first. When we get our paychecks the first thing we usually do is set aside money for the bills, bills, and bills. I realized how wrong that was. Paying bills is important but what’s more important is paying yourself first for all your hard work. By that I don’t mean going to the mall and shopping. Paying yourself means setting aside a portion of your savings – minimum is 10% of your earnings but the more the better – and you’ve got to do that before paying everybody else. For this to be feasible, he recommended that we should set an automatic payment that would deduct our a portion of our salary every month. I must say that really works because for the first time we were able to save money. Automatic deduction is the way to go with saving – it is efficient and painless and pretty soon you will not notice the deduction in your salary.
Colayco also teaches how to invest our money. He said that mutual funds was ideal for beginners and leave stock market investing to the experts. We also followed that and we had invested a small amount of money in the mutual funds. When we’re more knowledgeable in the stock market we will read guides on how to trade options and venture there. Colayco stressed the importance of making your money work for you. It’s not enough to leave money sleeping in the bank because the interest there is too low. We have to find ways to beat inflation and investing is one way to beat it.
We still have a lot to learn and I might reread his books to brush up on his teachings. I want to be able to save money while we’re still young and able to work so that we can retire comfortably and enjoy the fruits of our labor.