3 Reasons ‘Why’ My Finances Changed in Two Years

Last 2013, a friend in church approached me and asked me about saving for my retirement. Yes ‘retirement’ and it sounds awkward and weird to me back then. Imagine asking a young engineer who’s just been working for less than three months about retirement. I mean I’ve just started working and I am still enjoying the fruits of my labor.

Can I enjoy it first while I’m still starting?

If you share the same reaction as mine. Then let me share to you how this question changed my financial state.

Working inside the plant

Being Curious..

That question made me curious, I was seeking for answers and assessing myself on how will I truly prepare for my retirement. The only thing I know that time was to save money so I started from there. Upon searching on the internet, I stumbled upon the 10-20-70 principle, where it says that 20% of my income should go to savings first and budget what’s left from my income.

Applying it…

When I learned about the 10-20-70 budget, I tried to discipline myself, stick to this idea and apply it. To prioritize savings and budget what’s left for expenses, unfortunately this budget didn’t work out for me. When I was doing it the 70% of the budget wasn’t enough for our expenses at home. So that time, I only set aside 10% for my savings and allot 80% for our expenses.

Having this in mind I am very thankful to that friend in church for asking me about my retirement because that question led me from inconsistency to consistency in managing my finances. Though I was saving small that time, it planted a seed in me for something better in the future.

Making the habit..

After several months of saving, I became a regular employee in the company, I had an increase in my salary plus daily living allowances. I was really happy because this time I can now follow the 10-20-70 rule. I didn’t change my lifestyle so my expenses were still the same. Now because of that raise, I have increased my tithe and my savings as well.

Every paycheck, I disciplined myself to automatically save money and make the habit of saving. Since the company started to give me daily allowances, that’s the time I also started raising my emergency fund.

I changed my budget to 10% tithe 10% savings 20% emergency fund and 60% expenses.

Focusing on short-term goals…

After a year in the company, I got promoted and had a significant increase. Again, I was really happy because I have increased my tithe and savings for the 2nd time.

Having a bigger income doesn’t mean I need to have a change in lifestyle, so I continued to live my simple and frugal life.

That time I was focused in completing my emergency fund, it has accumulated to 2 months of our expenses already and my target was only 3 months of expenses.

I believe that I was right on track.

My first time working abroad

Last 2014, I was assigned abroad for 3 months. That’s my first time to handle big amounts of money, at first I was overwhelmed but I know I was prepared for it.

I have completed my 3 months’ worth of emergency fund so I added another 3 months to it to have 6 months’ worth of emergency fund from my earnings abroad. I have used the remaining money to renovate a part of our old house.

Having these short-term goals helped me a lot in managing my finances

And it was worth my spending..

After 3 months abroad..

I am in the Philippines again earning back to my regular income. I’m still living the same simple and frugal life, and I am content and happy about it.

I know I can spend on luxuries but I don’t prefer to do it yet. There are still goals that I need to accomplish and that is my priority.

Contentment is a choice and everyone has it, some people just lack the courage to choose it.

From 2013 (when my friend in church asked me about retirement) up to 2015 (after my job abroad), my financial state became better than before, I have 6 months’ worth of emergency fund, I have no debts, and most of my money is invested (up to now).

My budget for every paycheck now is 10% tithe 50% savings and 40% expenses.

In a span of 2 years my financial status has changed for the better and it was because of having the right foundations and discipline in applying it.

Me, helping with the renovation

The 3 Main Reasons why my finances changed

Hunger for Knowledge

When my friend asked me about my retirement, I had no idea how to answer before which led me to curiosity and eventually made me hungry for knowledge. I attended seminars, read books and try to apply it one step at a time.  In the same way, I believe that every one of us can change our financial state if we are hungry enough to be financially literate. Truly investing in knowledge has the best gains.

Disciplined as a Rock.

Knowing personal finance is one thing but applying it is another. It will take a lot of discipline and changed mindsets before getting used to it. It may be hard at first but we don’t have to make giant leaps. Baby steps will make the habit in us and these little acts of change will eventually lead us to financial freedom.

God is our provider; always be faithful with what you have

I believe that God is the one who gives us the ability to produce wealth. And by that I know that we have security in him. We might have a small income today but if you are faithful with it, I know that it will eventually grow. As we become more knowledgeable of Him and in our personal finance, the more it opens opportunities for us to grow as good stewards. Just continue to invest in knowledge and be disciplined enough to follow it.

With an ounce of faith, room for knowledge, and discipline in applying it, I believe that we can prepare ourselves to retire comfortably after 20 or 30 years and become a channel of blessing to people.


#Money4LifeChallenge : Start your own Financial Plan

Whether you do your financial plan personally or with a financial planner, it is very important for you to have one. Life happens to everyone and responsibilities occur naturally. It is very easy to say for us young professionals that we live comfortably with our income today but can we confidently say that we will also live comfortably when we start having our own family? Or maybe when the time comes we need to send kids to school? Or maybe retiring comfortably?

These are life stages where we have different needs and priorities in life and the goal of a financial plan is to guide us in order for us to be sustained and be comfortable in every stage of it. Simply, having money for life!

Last month I was blessed enough to join Sun Life‘s #Money4LifeChallenge with Aya Laraya of Pesos and Sense. It is a 6-month financial planning workshop with sir Aya as our financial coach. We will be having sessions for us to understand concepts in financial planning and help us achieve financial independence.


Having said that, I will be sharing here my #Money4LifeChallenge Journey so that you may also start your way to financial independence.

How to start your journey to financial independence?

First of all, we have to know first our own definition of “financial independence”. In a simpler way, what are your financial goals in life and what are their price tags. How much is “rich” for you? 1 million, 10 million, 100 million? By giving a monetary value to our financial goals, it gives us a better gauge in our own perspective towards it.

Second, we need to acknowledge where we are starting from. We should know our financial net worth by listing all of our assets minus all our liabilities. Having a positive net worth would be ideal.

In the sessions, Aya ask us to have short term goals and clearly define when do we want to achieve it and how much was needed.

You may find me weird because I had a hard time thinking of a short term financial goal simply because I didn’t want anything right now. For the sake of sharing, I started my journey to financial independence 3 years ago and that time my short term financial goal is to have an emergency fund. I would advise you to do the same if you don’t have an emergency fund yet.

Another short term goal is protection. Emergency fund and insurances are fundamental in a financial plan, both cover certain risks in life and at the same time give you the luxury to stay invested. If you don’t have these yet then I wouldn’t advise investing because chances are you might withdraw early if you accidentally needed money.

For a medium term financial goal, I am saving up for my wedding. When do I want it? I pray that it will be in 3 years time. So how do I plan for it? Here’s a calculator that I used, to gauge the financial goal and estimate how much I need to save and invest for it to be ready at that time. You might want to try it too.

For a long term goal, I am saving up for my retirement. When do I want it? I pray that I will retire by the time that I get to 50. How much do I need? A LOT! I’ve already computed my personal retirement fund before and I would save this topic in a different post since there are many things to be considered regarding this.

In the sessions I’ve learned that setting financial goals varies from person to person because we are unique in every way. Depending on our current life stage, what’s important is that we define them clearly, list them appropriately and act accordingly.

Budget, Budget, Budget

Our financial goals needs to be financed and it will normally come from our budget. While budgeting is a basic thing in personal finance often times many fail at it and I proudly say that I am one of them when I started working 3 years ago. I am thankful that I’ve failed it early and also learned it thereafter!

Here are a few articles I’ve written with regards to budgeting that may be helpful if you are also having a hard time with it.




Sir Aya also shared to us a mobile app called Wally. It is an expense app that records what you spend categorically. It can be very helpful to your budgeting because it accounts everything you put to it and give you your current status with regards to your budget.

Following a budget might be hard at first but as soon as we get used to it, it will be easy as pie. What is important is that we are aware of every single peso that comes out from our wallets. We should tell our money where to go and who’s BOSS, not the other way around.

Wrap Up

Here’s the basic flowchart on how to start your own financial plan

Define your financial independence>Know where you are starting from>Set your Financial Goals>Manage your budget(cashflows)>Protect yourself first with emergency funds and insurance>Calculate, save, and invest for your goals>Believe!

The journey to financial independence is a tough road but I believe that it is achievable. Mindsets and behaviors are keys to a successful journey so whatever circumstances you are in right now believe and be positive that you will get to your goals.

These are but snippets of what we are having in the #Money4LifeChallenge. As we go through the sessions I will be sharing more of these so stay in touch by subscribing to this blog for you to get updates.

P.S. BTW after writing everything above, Sun Life has launch it’s moneyforlife website where you can use an e-planner for your own financial plan. It is an easy and user friendly e-planner that will guide you to starting your own financial plan.