Building Up A Savings Plan

A savings plan is a plan which involves safe, secure and proper allocation of your savings whether in your own supervision or through the help of banks and other financial entities who will keep track in order to meet your short term or long term financial goals.



Here are the ten simple steps in making a savings plan that will help you ensure a strategic way in handling your own finances:

  1. Educate Yourself
  2. Know Your Monthly Expenses
  3. Allocate a Buffer Fund From Your Monthly Expenses
  4. Subtract  your buffer fund and monthly expenses and your Income and it becomes your savings
  5. Decide where to put an remnant buffer funds at the next payroll
  6. Compartmentalize your savings based on your goals and priorities
  7. Divide your savings and your expenses and buffer into two separate banks
  8. Invest your savings into different instruments depending in volatility, risks and their terms
  9. Draw the outline for your savings allocation before another payroll or the end of the month and draw potential scenarios and its re-allocations for flexibility.
  10. For an extra income, always divide it into a regular savings and the other into higher yield investments.

1. Educate yourself

Better know your background,   work environment, and your current financial situation and the economics of your household. An effective and efficient long term savings plan is only possible if you know the nature and economics of your life and your short- mid and long term goals.

2. Know your Monthly Expenses

The monthly expenses are those costs or the short term expenditures used in meeting our immediate needs in a month. Things like food, electricity, water and other services essential in our life but in short term in its utilization and demands. Keeping track of your expenses will allow you to identify the trend in your cash flow.

3. Allocate a buffer fund from your monthly expenses

The buffer fund is a term used for semi-savings money allocated if there is an excess expenditures or unmet needs that are not part of your monthly financial plan. The buffer’s other purpose lies on preserving your main savings account from further expenditures.

4. Subtract  your buffer fund and monthly expenses and your Income and it becomes your savings

To determine your savings, here is a simple formula:

Let e for expenditures,  b for buffer and I for income and s for your savings shall we?

I-(b+e) =s  , s then becomes your savings

5. Decide where to put any remnant buffer fund at the next payroll

If the buffer money is unused for the month, you have to decide whether to add the existing buffer to your savings account or other savings instruments? Or to add the existing buffer to the buffer you will allocate the next payroll or month. These are two simple options that are driven by your needs, another option will be to have it allocate a half to your savings and another to your buffer next month for addition.

6. Compartmentalize your savings based on your goals and priorities

Many people often associate savings with savings account in banks. Fair enough but in life you have lots of goals, they could be short-term, mid-term or long term. Make a list of those and categorize it into 3 based on time periods.  That is just one scheme. Other schemes are based on your mid to long terms goals as short terms goals can be handled by the accumulated buffer money

7. Divide your savings and your expenses and buffer into two separate banks

It is important to save your money in banks. It prevents compulsive expending behaviour that plagues people who saves money in their home as they are easier to access. It will give time for the handler to assess and re-evaluate his/her priorities. But just as important is to know what is the right bank for you. There are several useful factors and categories to consider of which were but this only simplified into two based on utility:

Availability and Accessibility- used mainly for expenditure and buffering purposes and also for commercial purposes and passive incomes and online transactions here.

Security and Diversity – Banks focused mainly savings and on many high yielding instruments. You put all your savings here.

8. Invest your savings into different instruments depending in volatility, risks and their terms

It is not only about saving but growing your money that maximizes and complements your goals that are just as important. It is important to delve and know more about your banks. Banks do not just store money. They have high potential to earn high yields than regular savings account to meet your mid-to long terms goals. I’ll only introduce 2 sure ways of getting higher returns. I am talking about investments here because we are maximizing our savings here. Money is not easy to get so therefore it is necessary to maximize it by growing it.

Stock Market – Some banks have trading platforms that allow users to engage in stock market. Stock market provides income for people by 2 ways. First is dividend yield and the other is on capital appreciation. Invest in high dividend yield and stable corporation and diversify your investments into other companies. Once in a while they will give high dividends based on the number of shares present that you bought. This is recommended for your long term growth. Buying stocks in lower prices and Selling them in higher prices will ensure you will have a high returns from your investment.  They have higher returns than regular savings account. This is handy in long term goals. It is important to keep tract on the stock market and its trends.

Mutual Funds (in particular Money Market Funds)-  It is also possible to engage in this instrument .I only recommend Money Market in this article because they are rather conservative in their risk , but still able to return much higher than regular savings account and even time deposit. They are also rather resistant to stock market fluctuations.  This is very handy for low to mid-term goals. Time Deposit is also possible but it has lower returns. All of these 3 instruments essentially ‘lock’ your savings into investment for higher returns.

9. Draw the outline for your savings allocation before another payroll or the end of the month and draw potential scenarios and its re-allocations for flexibility.

Every end of the month or just before your next salary, redraw your plan and come up with different scenarios. Every month , there are expenses with higher priorities over others. Other important services may still have the same allocation and out of these you derive how much will fall into buffer and your savings. There is no guidebook in life but you can improvise and make certain amendments in your purchasing power and your savings.

10. For an extra income, always divide it into a regular savings and the other into higher yield investments.

If you have an extra income other than that of your regular salary. Divide it first into both buffer for the future and the other into your savings. And out of your the savings allocation further divide it into instruments that your savings was invested or allocated on.

{{ reviewsOverall }} / 5 Users (0 votes)
Rating0
What people say... Leave your rating
Order by:

Be the first to leave a review.

User Avatar User Avatar
Verified
{{{ review.rating_title }}}
{{{review.rating_comment | nl2br}}}

This review has no replies yet.

Avatar
Show more
Show more
{{ pageNumber+1 }}
Leave your rating

Your browser does not support images upload. Please choose a modern one

The following two tabs change content below.

Sharmaine Escarian

Unstoppable, determined and very passionate. A full time HR practitioner, freelance writer, a loving daughter and a seeker of adventures, lifetime learning and improvement. And shall continue to design the life that she has always dreamed of -- inspirational, purposeful and a journey where there is contentment and genuine happiness.

Latest posts by Sharmaine Escarian (see all)


Basahin ang iba pa naming mga posts to know more!

Loan Ranger – Online Cash Loan for Philippines

Company name: First Digital Finance Corporation Website: https://www.loanranger.ph/ Registration no.: No.: CS201516347 Contact info.: Email: info@loanranger.phSmart+639083101083Globe+639278664502Office HoursMon – Fri9 AM – 6 PM Address: 9F, TM Kalaw Center, 667 TM…

Cashmart – Your Online Lending Partner

Company name: Cash Mart Asia Lending Inc. Website: https://cashmart.ph/ Registration no.: CS201610084 Contact info.: Email: info@cashmart.phCall: (02) 829 0000Adress: 53 Bayani Rd, Taguig City, Metro Manila, Philippines 1630Mondays to Fridays…

PawnHero – Your Pinoy Online Pawnshop

Company name: PawnHero Pawnshop Philippines, Inc. Website: https://pawnhero.ph/ Contact info.: Monday to Saturday, 9:00 AM to 5:00 PM*4:00 PM cut-off time for walk-in transactionsMain hotline: 8828-CASH (2274)Globe hotline: 0917 872…

Opeso-Cash Loans, Installment, Credit

Company name: OKLIK LENDING COMPANY INC. Registration no.: No. CS201903131 Contact info.: Tel: 09994153606 (globe) 09773186511 (smart)Address: Oriental plaza, emerald drive, PH, Pasig City, San Antonio The following two tabs…

Vidalia Lending – Loan Cash Online

Company name: Vidalia Lending Corp. Website: https://vidalia.com.ph/ Registration no.: No. CS200813771 Contact info.: Address: Unit 601 Summit One Tower #530 Shaw Boulevard Mandaluyong City, 1552 Metro Manila Philippines Landline:(02) 8534…

Cashalo – Cash Loans, Installment, Credit

Company name: Paloo Financing Inc. Website: www.cashalo.com Registration no.: No. CSC201800209 Contact info.: Facebook: @CashaloPHAddress: 16F World Plaza, BGC, Taguig City, Philippines 1634Email: hello@cashalo.comContact Number: +63 2 8470 6888 The…

BPI Personal Loan

Want to have a start-up capital for your investments but have a limited budget? BPI’s Personal Loan offers the ability to take out a loan thrice of your gross monthly…

One Day Process Loan for OFW

Sa mga paalis at nakabakasyong OFW sa Pilipinas na gustong magloan at ayaw maghintay ng napakatagal na proseso. Ang South Asialink Finance Corporation ay nagbibigay ng loan para sa lahat…

PesoIn – Safe Loan Lending Online

Company name: LINK CREDIT LENDING INVESTORS INC. Registration no.: NO.CS201914644 Contact info.: Working time: 9am-18pm(Monday – Saturday)Website: https://www.pesoin.comEmail: help@pesoin.comAddress: 12th Floor, Aseana Three Bldg, , Macapagal Ave cor. Aseana Ave….

GSIS Emergency Loan

Just like Pag-Ibig and SSS, the GSIS also offers an emergency loan for the same purpose of providing immediate financial assistance to members. The typhoon Ambo that made landfall in…

Kviku – Fast Online Lending

Company name: Kviku Lending Co. INC. Registration no.: No. CS201918702 Website: https://kviku.ph/ Contact info.: Email: support@kviku.ph Address: 18A Trafalgar Plaza, 105 H.V. Dela Costa Street, Salcedo Village Makati City The…

PesoCash – Safe Cash and Peso Loan Online

Company name: MyLoan Lending Investors Inc. Website: https://www.pesocash.ph Registration no.: NO.CS201900197 Contact info.: Phone Globe: +639 270317725Phone Smart: +639 612783945Website: https://www.pesocash.phEmail: cs@pesocash.phAddress: 12th Floor, Aseana Three Bldg., Macapagal Ave. cor…

Upeso Philippines – Fast Lending Online

Company name: U-PESO.PH LENDING CORPORATION Registration no.: No.CS201814908 Contact info.: Email: cs@upeso.phHours of Operations: 08:30-17:30, Monday to SaturdayAseana City, Aseana Ave, Parañaque, Metro Manila, PHILIPPINES The following two tabs change…

PagHiram – Cash Loan Online

Company name: MyCash Lending Investors Inc. Registration no.: No. CS201840987 Contact info.: Email: csr@paghiram.phPhone: 0909 677 5484Facebook: PagHiramFacebook Messenger: m.me/253963105515530 The following two tabs change content below.BioLatest Posts mayzelle Mayzelle…

Atome PH- Fast Online Cash Loan

Company name: Neuroncredit Financing Company Inc. Website: www.atome.ph Registration no.: No. CS201816338 Contact info.: E-mail: cs@atome.phFacebook: @AtomePhilippinesInstagram: @atomephAddress: Unit 1605 Centerpoint Building, Julia Vargas Ave., cor Garner Rd., Ortigas Center,…

Leave a Comment