7 easy money tips to start the New Year right

7 easy money tips to start the New Year right

AGNES MIRANDA

By Michelle Chermaine Ramos
The Philippine Reporter

The new year brings with it a fresh slate of possibilities including opportunities you can grab and money pitfalls you can avoid only if you tackle them strategically. Financial literacy expert and Executive Vice Chairman of World Financial Group, Agnes Miranda, is meticulous when it comes to mapping out her yearly goals in advance. She actually sets her Christmas budget as early as January and encourages others to do the same to avoid accumulating credit card debt. Based on her track record of building her empire from scratch, she obviously knows how to make money work for her rather than vice versa. She explained that although the idea of building up enough savings might seem daunting for many, it is not impossible. Every gargantuan task can be broken down into small baby steps and it all starts with simple mindset shifts and cultivating habits that pay off in time. Here, she shares seven easy tips you can implement right now.

1. Create a written visual map of your goals for the year to budget accordingly

If you are planning to get married, go on vacation, buy a house or car, or are sending your child off to college this year, that should be part of your budget. “I usually start planning for the year ahead six months ahead of time,” says Miranda.

She emphasizes the importance of having your goals written down to give yourself a clear overview of the year ahead with these objectives in mind so that you can plan how much you need to save leading up to those anticipated expenses. You need to map out what you plan to do, in order to know where to tell your money (and how much of it) where to go.

2. Work on improving your greatest wealth – your health

When asked if there is something specific that she absolutely must accomplish before the end of January, Miranda said that her goal setting has changed for this year after experiencing an eye-opening health scare in early 2021.

“I have been guilty of neglecting exercise and my health, and because of my stroke, I’m very disciplined now with my diet and everything else. It was a great lesson on how following instructions for my health is so important. It taught me a lot about proper care because I almost died. I had COVID and two strokes. This time, because of what happened to me, I realized that it’s one way to live, and you need to be coachable and follow your doctor’s instructions. Let your food be your medicine. It’s important to have discipline with your diet, exercise, weight loss and all,” she explained.
Do you have any health conditions? Are you working on improving your diet and fitness? Those are important things to consider when planning your budget for your weekly groceries to buy healthy food so that you won’t be tempted to make impulse purchases of junk food or whatever might be on sale. Also consider whether or not you need to buy personal training or therapy sessions, or if there are more affordable alternatives. Consider costly personal training versus group classes, or a gym membership versus free home workouts with affordable equipment as long as you have the know-how and discipline.
To navigate through life at the top of your game, you need to invest in your only permanent home and vehicle which is your body. Determine what it needs to operate at its best and work that into your yearly budget.

3. Evaluate the previous year and learn from your mistakes

Reflect on the previous year to determine where you hit some financial goals and where you missed the mark. Examine what led you to those failures so you can learn from them and prevent them in the future. Be brutally honest with yourself. Did real emergencies drain your funds, or did you simply fail to plan and budget properly? Are you an emotional spender? If so, what is the real root of the emotions that lead you to overspend? Be mindful of your spending habits and the reasons behind them so you can make better conscious decisions.

4. Couples who plan together stand together

Since money problems are a common cause of marital conflict, it is vital for couples to plan their goals together and be on the same page when it comes to spending, saving and investing. Miranda and her late husband Manny always did their evaluation two weeks before the New Year.

“At the end of the year, my husband and I would sit down and evaluate ourselves and how we did the previous year. We looked at our expenses, our budget and everything. We looked at the positive and negative things and discussed that. Personal finances are very important and because we owned our business, we also had goals to grow our business,” Miranda said. “We critiqued ourselves personally on where we had to improve. You need constructive criticism. So aside from evaluating yourself, the best person to evaluate you is your husband or wife because they’ll say the truth. (Laughs)”

5. Starting a part-time business (vs. a part time job) has its tax-deductible perks

If you have a fixed income, ask yourself how much money you want to make this year and evaluate how to increase your income if needed by considering taking on an extra job or starting a business. Miranda usually recommends a part-time business because there are expenses that can be tax deductible versus an extra part-time job that can result in paying more taxes.

6. Make a habit of saving at least 10% of your income

When asked about some of the most common mistakes she has observed people make in her years of teaching financial literacy workshops, Miranda said it mainly boils down to the lack of discipline. “The habit of saving. It takes 21 days to make it a habit. Also failing to differentiate wants from needs,” she said. When you spend more on your wants versus your needs, you risk treading on the slippery slope of falling into debt, which is why self-awareness and the ability to make conscious financial decisions are essential.
“We have this book, Saving Your Future, and there are stats saying that 31 percent of Canadians don’t make enough money to cover their monthly expenses. More than half say that they are within $200 away from not being able to pay their bills. 47% of Canadians from age 55 to 64 have no employer pension. Most of us don’t want to become statistics but this problem is all around us and happens to our families and friends,” shares Miranda.

7. Regularly save one hour’s worth of wages every day

Savings don’t have to be big to get started. “We always ask people in our workshops if they could save one hour of their money. If you are being paid for eight hours a day, why not put aside one hour and think that you’re just getting paid for seven hours? For example, if you’re paid $20 per hour, you will save that pay for one hour and it will eventually add up to a lot of money. It’s just about the psychological thinking of acting as if you’re just being paid for seven hours. People usually say they can do that, and they find that it eventually adds up to about $300 monthly,” Miranda explained. To succeed, you must make the process simple and be disciplined and watch how your efforts snowball with time.