Your 5-Step Action Plan to Start Saving and Investing!

When it comes to money, ask any Filipino, “Gusto mo bang magkaron ng ipon?” and the answer will always be yes. But why is it that we drag our feet and make up excuses whenever we’re given the opportunity to save and invest? This is the question investment advocate Aya Laraya, licensed stock broker, registered financial planner and founder of Pesos and Sense, asked an audience of moms during Smart Parenting’s Money Strategies for SmartMoms workshop, co-sponsored by Pro Friends and held at Cafe 1771 in El Pueblo, Ortigas last September 22. 

Larays explains that every month, Pinoys are good at finding excuses to forego saving or investing until a whole year rolls by. In January, we make resolutions and promises to change our ways and save. But come February, we make Valentine’s day an excuse to splurge on our partners and forego saving. Summer rolls around, and we plan family vacations, putting off saving and investing until June. But when June comes, it's tuition fee season. August, it’s unlucky to part with money because the Chinese believe it is "Ghost Month." Come October, the second semester tuition fee instalment is due. By November and December, there is no money to spare for the Christmas shopping and celebration. And then it's January again, and the vicious cycle continues. (Don't forget all that weekend malling adds up.)

What other parents are reading

How to Grow Your Child's College Fund if You Have P50k, P100k or P500k

This “social schedule,” as Laraya calls it, makes it difficult for us to look at investment where we don't immediately see or experience the benefits. “Investing is a choice. It's a choice between something good that’s right here and right now (like family vacations and gifts) versus the mere potential of something better (investments that can grow our money),” says Laraya. “No investment is really 100 percent guaranteed. There's no such thing. Kaya nga nakakatakot.” 

However, there are ways to make investing a prospect you can look forward to. Laraya shares this 5-step action plan for saving and investing for parents:

1. Ask yourself, “What am I saving for?”
“First of all, what you want has to be clear. Why are you saving?” says Laraya. Achieving goals is easier when we have a clear picture of what we want, and that's especially true for saving money. 

2. Make clear financial goals
The more specific the goals are, the better. Laraya advises that financial goals have set and realistic amounts. If you’re saving for a house, car or college tuition fee, get the figure to aim for. By having an amount, you’ll be able to monitor your progress and help keep you on track. Laraya stresses that goal-setting is better achieved when you know what you’re saving or investing for, which is why step 1 is important. 

What other parents are reading

5 Uncomplicated Ways to Recover From Your Money Mistakes

3. Involve the family
“It has to be a family discussion, it cannot be unilateral,” says Laraya. Tell your partner your plans to save or invest and discuss together what you want to do from here. Saving and investing affects everyone in the family as it could entail better spending habits and cause lifestyle changes. “If you don't discuss it, how can you as a family make good decisions?” says Laraya.

4. Consult with experts
Making good financial decisions requires the support of experienced experts. Know what to look for and learn how to trust competent people, says Laraya. And always, always ask if the expert you’re talking to has a license whether it’s for insurance, mutual funds, stocks or real estate. 

Once you’ve found your financial advisor, set up a meeting and come prepared with questions. When it comes to money talk, Filipinos are rarely assertive, says Laraya, but to fully understand insurance and investments, you have to be. Know the ins and outs of your financial product to be able to make sound, informed decisions. 

5. Act
Laraya says our own thinking can get in the way of our financial goals. Sometimes, Filipinos believe money and wealth is a bad thing but there’s nothing wrong with it, he adds. “You work hard. You do the right thing. You invest.”

What other parents are reading

Raise Your Kids to Have a Healthy Attitude Towards Money

The Best Way to Teach Kids About Money, According to Bo Sanchez

7 Best Things Said About Money That Couples Should Remember

Comic Books Teach Kids and Grown-Ups Alike How to Save and Grow Money