Salaries and other sources of income are used to pay for your living expenses. Utilities and various taxes and maintenance expenses usually take up at least 85% of an average worker’s income.

What many people fail to consider is that you owe it to yourselves to save at least 10 percent of your gross income for medical expenses and to fund your retirement. People always find an excuse not to save: “I don’t earn as much as I need.” “I am too busy to manage my finances,” “I am the sole breadwinner in my family.” The list goes on and on. One does not need to look outside one’s own family. Most people say that they have difficulty saving any amount.

Financial experts advice people to start saving for their retirement. Even in the U.S., social security is already being stretched to the limit due to the decreasing number of contributions in relation to those retiring. You have to be proactive and create your own social security by saving up for your future needs. Enumerated below are some practical suggestions:

1. Make a realistic budget. Aside from listing down all of our fixed expenses (electricity, water, phone, cable, internet, gasoline, rent and other predictable expenses), it is also wise to factor in yearly expenses (such as land taxes for those who own properties), tuition fees, car maintenance (registration, insurance, tune-ups, changing-oil, fan belts, tires, air-condition cleaning and freon reloading), association dues (for those living in gated communities and condominium units) and other unusual expenses and divide them into twelve months. The average you get should be included in one’s monthly expenses.

2. Keep accurate financial records. Listing down all of one’s expenses in a diary or notebook is worth the effort when one is serious about monitoring expenses for any given period. It allows one to make precise budget predictions based on the past twelve months listed in one’s records. The past is usually a very good indicator of future trends.

3. Pay yourself first. Now that you have a budget and a system for monitoring expenses, you can now chart your financial future by making some sacrifices and hard decisions. Do you really have to take your car to work and end up paying parking fees every day? Is it too much an inconvenience to bring your own viand to work? What about indulging in coffee and muffins during break time? These expenses may be trivial at first but it all adds up. The money that you save from these and other non-essentials could be used to pay yourself first by depositing it into a time deposit account and keeping it there. Also, setting aside at least 10 percent a month is a good start or saving up for your retirement. The only way to do this is to automatically withdraw the money you earmarked for savings from your payroll account and invest it in high-interest earning bank products. In the same way your company deducts your withholding tax and SSS from your salary every pay day, you should also be equally strict with yourself and transfer the funds into your retirement account. No ifs, no buts!

4. Guard your treasure! A lot of people who are in a hurry to get rich fall for the trap set by the unscrupulous or those greedy and stupid enough to fall for them. Pyramiding schemes and investing money into starting businesses are very risky, especially if the only basis for lending is that the one starting the company is either a relative or a good friend. When it comes to money, there are no friends and relatives. Unless that person has a solid track record of success behind him or her, the risk of losing one’s investment is very high and not worth the high returns promised. Remember, it is better for one to spend lavishly on one’s caprices rather than have one’s hard-earned fortune wasted by someone else!

5. Watch your money grow. The longer you keep your savings in high-interest earning bank products such as time deposits, the faster it multiplies. Add to this a systematic monthly contribution of at least 10 percent of your gross monthly income and you are guaranteed to outpace inflation and be able to sit back and relax as you reach retirement age with the knowledge that you have a nest egg waiting for you after you have received your final paycheck!

Good luck!