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Tips and Tricks to Save Money
Sean: From Erika. What are the steps I could take towards a future where I don’t have to worry about money?
Toni: I guess it’s the same answer for me. Find a stable job and learn how to set aside a portion of your hard earned money towards your future goals.
Sean: Yeah. Or you could be dirt cheap on your side and you’re not going to worry about money.
Toni: Right. And you know, this is what I learned from Manny Pangilinan. What he likes to do is he separates his money into different accounts. And then he just uses one active account for spending, but that account has the lowest balance. So it makes him look like he’s broke and it pushes him to work harder to earn more money. So it’s like that. It has psychological tricks that would help you grind more.
Sean: I practiced this, something of the same, but not really for me to think that I’m broke. It’s just for me, why do I do it that way? Because I separated my personal account to the company account. That’s how I did it. So the personal account, that’s what I used to pay my credit card bills, everything, and it doesn’t have a lot inside. The corporate account is the one paying for the bigger bills, like our rent and stuff. So everything goes there from our clients, it will go straight there.
Toni: Yeah. Yeah, that helps. So it’s like the bucketing method wherein you separate the money into different accounts or purposes. That way, if let’s say, you need to have your own account for your fun money, and if let’s say it went to zero, you blow it out on, I don’t know a major purchase, it’s fine because you know you’re not touching your emergency fund, your operating expenses, or your business account. So that’s one way to go about it if you want to earn while being stable or feel financially stable.
Sean: Yeah. Well, make sure that if you’re married, if you have lots of accounts, make sure your wife/husband knows all of those or that it’s a joint account.
Is there a specific budget rule on how to save money? From Pam.
Toni: There’s actually none, like we always say, personal finance is personal. In terms of the percentage of how much you allocate your savings, your investments, your operating fund, that’s for you to decide initially. But they say, the old rule is the 50-30-20. Like 50% to your needs and then 30% to your savings and then 20% to your wants.
But again, it also depends on your income. So the higher your income, then you also have to change the percentage that you set for your savings or for your investments. But in your case, how did you do it, Sean, when you first started out, like when you started having a system for your money?
Sean: I went through a phase in my life where I was eating a pack of skyflakes for breakfast and lunch. The thicker one.
Toni: Me too.
Sean: Yeah. You probably understand me when I say saving is a must for survival during that time. And I carried that over up to today. I mean, the toys that I buy are, it’s just like you, you get your budget for crypto investment from your brand deals, I get it from my public speaking money. So whenever I have a talk and a client pays, I tell my wife, oh, this is my play money. This is not the company’s money. This is my play money because I spent time and it’s my one hour when I spoke there in that conference.
So yeah, when I was starting out, I saved a lot. I probably saved 50% or more. Now I save 95%. So I only spend like 5% or 10%. I don’t spend too much. I don’t spend too much, especially now during the pandemic. If you keep buying stuff, your house will easily be filled with things and I already have too much stuff in the house and I have to get rid of some actually, so I save a lot. So for me, the rule is just save as much as you can.
Toni: True. What can help also is just to simply automate your finances already. Even in my case, what I do is when I receive income already, I set, I allocate a portion of that straight into my savings and straight into my investments, and I just spend whatever is left. It helps me better. So that at least with whatever money that’s left, if I end up blowing it again, then at least that’s fine because I’ve already saved initially before I started spending. So that can also help you.
But if you’re asking for a more specific percentage, just like what they say, if your cash flow is healthy, if your operating expenses or your needs don’t go beyond 60%, so maybe that can be a benchmark for you, but it still depends. It depends on how much you’re earning. It’s going to be different from a minimum wage earner and different from someone like Sean. So he saves 95%, that means 5% of his income goes to his needs. Right?
Sean: Yeah, I just save as much as I can and live a simple life. Don’t try to keep up with other people because you’re never going to be happy. And you have to be at peace with yourself, meaning, you’re okay with yourself, who you are, you know who you are, you’re aware of your character, you’re aware of your identity and you’re at peace with that, you’re not going to need more stuff. What you’re going to need is more maturity in life and in your spirit, that’s it. You’d come to that point.
Aside from reading books, what are other ways to learn financial literacy? From Jet. And if ever there is a school that we can get enrolled in, where would you recommend?
On TikTok. Money Health Check. That’s it and it’s free.
Toni: Sean Si’s podcast. He also has a book and he also posts on YouTube, it’s also free. Because not everyone likes to read. Even honestly, when I read finance books, like there’s some of course, I stay awake while we’re reading them, but when I was reading Intelligent Investor by Benjamin, I was falling asleep halfway through the book. So I like to learn about business, leadership, finance, all of that through listening to podcasts because it’s almost like you’re reading a book, but you’re just hearing the audio. So it also helps me focus and start my day right.
So I like to listen to Sean’s podcasts every morning, other than the School of Greatness. That’s also my favorite and then second would come the Leadership Stack.
Sean: Thank you. So we have Randell Tiongson, you can check out his podcast as well and YouTube channel. One of the most sought after personal finance gurus and teachers here in the Philippines. If you want to learn about investing and hype and flattery, Marvin Germo.
Toni: Our favorite.
Sean: Our favorite. One of the best investors ever out there. Hands down. Yeah. Free stuff and really useful stuff. I mean, I know these people and I know Toni as well, they don’t ask for anything, but the stuff they teach is even better than what school will teach you. I can promise you that because it’s real world stuff you know. It’s not textbooks and academics. It’s not grades, it’s real. It’s the real stuff. So tune in to their podcasts, read their books, consume their content and practice it and you’ll get better over time.