Personal Finance

Life is a strange tide of stop and go, ups and downs, and in betweeners. As settled as you are, things CAN happen unexpectedly. Maybe not as fast as Taylor Swift changes boyfriends, but it happens. And like it or not, you will need to prepare for that day with financial goals. When that day comes, the last thing you need to do is take it from your savings. Here are things you can do:

Financial goal #1: Start your emergency fund

You’re in your 20s – happy, healthy and you’ve got the whole world ahead of you. You have a car, but what if it breaks down? You have a house, but what if you need pipe repairs? What about emergency checkups or dental surgeries, which need immediate attention? Your emergency fund can be your kind of savings dedicated for these matters.

You can open an account dedicated to an emergency fund. Make it a financial goal to set aside some money, which can cover from 3 months to 6 months of basic living expenses.

Financial goal #2: Open a retirement fund

You can open on your own, just like you would do on a passbook account. This financial goal can be tedious, especially with an emergency fund and a savings account you’re eyeing on. A good way to invest in a retirement fund with up to 14% returns than your average bank savings is by applying for VULs or unit-linked insurance.

Most life insurance plans have this option wherein the investment part (could be stocks, mutual funds or bonds) is separate from the actual insurance portion. It’s a safe bet if you can set aside around 5,000 on a quarterly basis, which is also a low-risk investment.

Financial goal #3: Get rid of debt

Financial experts always say this, there is good debt and then there is bad debt. Good debt is when you borrow money from a bank or lender at reasonable terms and use the money to fund a portion of a business or keep it going with improvements or innovative developments. It takes discipline to stay away from bad debt, especially with the handy credit cards. With its ease of use, you can swipe as long as you are within credit limit, but always remember to purchase what you can afford to pay at the end of the month.

Financial goal #4: Do some freelance work

You may hustle good at work, but what if one source of income is not enough? Or what if it’s enough but you have extra time on the weekends or you’d like to start making some good cash out of your hobby? You can use the money you earn here in your retirement fund. The options are endless, you just need to get out there and look for it. The best thing is, you might not even have to go out to look for it. You can start sending resumes to big companies who may be looking for talented people who can be hired on a per project basis. You never know.

Make sure to make an easily accessible online portfolio. It helps to be visually attractive.

Financial goal #5: Have a long-term life goal

Great, you’ve bought a great DSLR or you have the latest phone before it even arrives in the Philippines. These are short term goals. When it comes to long-term goals, it could mean having to begin now to be able to reap the rewards of your hard work in the future. It could be buying a house or starting an investment fund for your kids, it could be getting life or health insurance so that you don’t have to take your family’s savings when something unfortunate comes in your way.

Do you have financial goals before you hit 30 years old? Share it in the comments.