It is always the right time to save money.
That was one of the key messages of Rizal Commercial Banking Corp. (RCBC) Retail Banking Group segment head Ismael Reyes during a financial literacy webinar.
“Learning financial literacy chooses no age. It is always the right time to save money. Whether you are starting your career or a tenured employee, you can always start saving and securing your future. We need to be disciplined,” Reyes explained.
Reyes said the Yuchengco-led bank endeavors its partners and clients to start their financial journey and achieve their goals, adding that “their success matters to the bank”.
Held last August 30, the webinar – called Defining Life Goals and the Money Mindset with Fitz Villafuerte – is the first of a series of financial literacy talks organized by RCBC for its payroll employee clients under the bank’s Payroll Marketing Program.
Villafuerte, a registered financial planner, addressed in the webinar the ultimate question which is “how to get rich?”.
“The answer is simple: spend less than what you earn and invest the difference every month for many years. Your savings should be bigger than what you’re spending and invest it. It shouldn’t be a one-time big time investment. Small investment every month should be fine,” Villafuerte said.
He also added that financial success needs a huge change in behavior, habits, and mindset.
Villafuerte is also the creator of the blog Ready to Be Rich, which has received several recognitions including the Best Business and Finance Blog at the Philippine Blog Awards. He is a civil engineer by profession.
New habits
Learning new habits would be about designing your environment for success. “Make it easier to do good habits and make it harder to do bad ones,” Villafuerte said.
“Habits are the compound interest of self-improvement. If you want to change, it doesn't happen overnight. Make small changes in your daily routine,” he added.
On making it easier to develop good habits, Villafuerte advised that you should “pay yourself first”.
“When your salary arrives, save a portion immediately as a form of paying yourself. Then you can spend what is left after your savings,” he said.
Meanwhile, examples of making bad habits harder would be uninstalling shopping apps and intentionally leaving behind credit cards at home when you go to the mall. “This way, it would be harder for you to spend money”,
Create new systems
On building financial wealth, Villafuerte advised creating new systems aside from just relying on willpower.
“Develop a system that’s easy to follow. Have specific and clear rules. Instead of telling yourself you will save money, be more specific and tell yourself to save, say, P500 a month?” Villafuerte said.
On addressing bills, pay the bill immediately upon receiving it instead of waiting for the due date. It is easier with mobile banking.
New mindset
Lastly, Villafuerte shared new perspectives about money. “Don’t save for the sake of saving. Have specific goals to inspire and motivate you.”
He explained that present income is for present needs. Future income is for future needs. Borrowing money means using future income for present needs. Unexpected or emergency expenses occur, so that’s okay. But borrowing money for present wants is bad because this means you will be spending future income and would thus have less money for your future needs.
“On the other hand, we have investments. If you invest, you are using your present income to augment your future income, which means, you have a bigger budget for future needs and you can have spare budget for future wants,” Villafuerte said.
He added that there are now a lot of investment options available, citing RCBC One Account as an example. RCBC OneAccount is all-in-one account that allows clients to save, deposit checks, and have time deposits.
“The earlier you invest, the better. Even if it’s small, time is always on your side. You can now invest for as low as P5,000,” he further said.
This free financial literacy webinar is a value added feature of RCBC’s Payroll Service. Companies who avail of the bank’s Payroll service can extend this benefit to their employees. For more information about RCBC’s Payroll Service, you may email grp_gtb_business_development@rcbc.com or visit the nearest RCBC Branch.