Save Money for Sudden Expenses

Save Money for Sudden Expenses!

Your Guide to Saving for Emergencies and Short-term Goals

February 2, 2024 | by HC Mutual

For most Filipino employees, creating a financial plan for emergency situations is not a priority. The common mindset is that if something is not yet here, it shouldn’t be a source of concern now. This is understandable considering the skyrocketing living costs coupled with the low wages of ordinary workers.

This unfortunate situation especially impacts Filipino households. A major illness or sudden hospitalization of a family member, for example, can lead to bankruptcy in the family, draining savings and burying family members into debt.

The good news is that you can start creating your budgetary plan today! With the right financial discipline, you can ensure that the next time an emergency financial situation comes up, you are financially ready and you don’t have to drain your savings or drive yourself into debt.

To help you with planning, check out these management tips for your financial peace of mind:

1. Build an emergency fund.

Life’s surprises are a constant in this world. But it doesn’t mean you cannot prepare for them. Whether it’s a sudden job termination or an unexpected medical situation, you need to establish an emergency fund that can help you survive even in abrupt circumstances without putting you in debt.

The ideal amount for an emergency savings fund is six month’s worth of your monthly salary. Start planning how you can contribute to build this amount and complete it in the shortest amount of time possible for you.

2. Be on a budget.

Most of the time, your salary is just enough for your established goals and to put food on the table. The idea of setting aside money for an event that is yet to arise can be seen as a burden, as you simply don’t have the extra for it. Sticking to your budget means being able to avoid unnecessary spending and paving the way for expenditures that do matter.

3. Make room for future fun and duties.

Not all short-term goals need to be associated with unfortunate instances in your life! Occasions like throwing a golden anniversary celebration for your parents or paying for a trip to see your favorite artist outside the country are also an investment in once-in-a-lifetime experiences that can never be replaced or bought. Make sure that you also make room for them to make the most of your money—and your life.

4. Put death to debt!

Debt is part of life. Emergency health cases, house repairs, and other loans are just some of the things we need to deal with in life. The best way to handle such situations is to anticipate them with financial readiness, as if they’re already here.

One way to do this is to make sure that these “situations” already have a regular spot in your income. This way, when they do finally happen, you don’t need to borrow, which can lead to an endless pit of debt. You already have your own fund for them.

If an expense is unnecessary or simply out of whim, do not be tempted to give in to it! The key is to live within your means. Staying out of debt is something your future self will be grateful for.

5. Have a separate savings plan for your emergency fund.

One of the most effective ways to secure your budget for unexpected expenses is to create a specialized budget for them within your monthly financial plan. Unexpected expenses may be just that—unplanned. But it is not any less crucial. If anything, because of its volatile nature, unexpected expenses should also be a priority because, again, we can never know when life will throw monetary challenges at us.

Choose the plan the suits you and start your journey to financial freedom:

Secure your future through saving.

Start saving for as low as PHP 101 per payday.
Flexible savings plan of 3, 5, or 7 years.
3% earnings from your savings per annum.

Build up and earn big from your savings.

Start saving for as low as PHP 1,212, PHP 2,424, or PHP 3,636 per payday.
Fixed 5-year savings plan.
5% per annum after 5 years upon completion of the plan.

Taking control of your finances isn’t about depriving yourself of all the fun and nice things that this world has to offer. It’s about building a healthier relationship with your money — one that inspires you to reach your goals and live life on your own terms.

So take the time to brush off the financial stress brought by the past holidays, embrace the energy of the new year, and empower yourself by practicing better money management skills.