Stage 1: Getting Started

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Are you in your getting started life stage?

Most individuals in this life stage prioritize the accumulation of assets to build confidence and independence – such as owning a car, a home, opening a business or even traveling abroad. That’s a good starting point because defining your dreams and life goals will give you a compelling reason to SAVE and INVEST rather than SPEND needlessly.

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So what do we need to do now to prepare for a brighter life tomorrow?

  • Create a conscious spending plan.
  • Build an emergency fund.
  • Save for life milestones or your dreams/life goals.I’ll discuss with you each one so we can work on it already.

Do you know where your money is going? Do you keep a budget? How do you allocate your monthly paycheck?

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Creating a conscious spending plan ensures that you know where your money is going. If you value trying out new restaurants, factor it in your spending plan. And then eliminate those that you can live without (for example, lowering your monthly grocery bill by not buying junk food).

In this illustration, the sample allocation is 50% for essential expenses such as rent, food, transportation, utilities, etc., 30% for lifestyle expenses such as dining out, family trips, entertainment, etc. Essentially, the 30% is your ‘fun money’ so you won’t also feel deprived.

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The remaining 20% should be for your life goals or long-term financial needs such as education and retirement. You can also channel some of these savings into building an emergency fund if you don’t have that yet.

Creating a conscious spending plan every month ensures that you have committed to the habit to set aside money for your life goals and dreams.

Apply the conscious spending plan, adjust based on your lifestyle and needs, but make sure to stick to the plan monthly.

The secret to saving is really not on how much you earn but how much you save or set aside.

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The prescribed amount is 20% of your income monthly. Depending on your lifestyle, you may even increase it to 30-40%. Start with an amount that you’re comfortable with and work your way upwards.

The key is to treat your savings as a monthly expense and automate fund transfer or investment in a financial product so you won’t be tempted to spend it on short-term wants.

Once you have committed to this habit, achieving your goal will become so much easier.

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Do you have an emergency fund? Is it enough to tide you over in case of an emergency?

The purpose of an emergency fund is to ensure that you have a liquid fund to draw from should an emergency arise.

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An emergency is something like sudden job loss, hospitalization due to illness, rebuilding a house after a natural calamity, an emergency trip to the province, etc. The emergency fund must be replenished once it has been used and depleted.

Because of this purpose, your emergency fund must be placed in a savings or time deposit account to ensure that you can access it at any given time. By placing it in a liquid financial product, you won’t have to touch your savings or investments (by redeeming or pre-terminating and incurring penalties) that are intended for your mid-term or long- term goals. For your health-related concerns, you must also have health insurance such as an HMO or critical illness insurance or hospital income benefit plans to help with hospitalization expenses.

Ideally, the emergency fund should be equivalent to 3x-6x of your monthly expenses.

If you do not have an emergency fund yet, you can start to build it slowly by channeling a portion of your savings to it. This can be done simultaneously while you also save for your other life goals.

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Everyone has life milestones in mind, be it a car, a house or condo, a dream vacation or a business. Unfortunately, not everyone achieves their life milestones.

The trick to saving for life milestones is to visualize your goal, pin your target amount and set a deadline to achieving it. Most importantly, is to invest so that your money will work hard for you by creating more money.

We can help you create, implement and review existing plans

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As your advisor, those are the bright choices that I can help you with. How? By assisting you in developing a FINANCIAL PLAN suited to your life goals and your unique circumstances. Creating a financial plan is a collaborative effort and together we will create, implement and review this road map to help you achieve the Brighter Life.

We can help you manage your finances on your “Getting Started” Stage

These are the steps that we will go through:

CREATE

  • We will identify and prioritize your life goals
  • We will compute how much those will cost in the future and adjust based on your financial situation
  • We will develop a financial plan customized to your life goals

IMPLEMENT

We will choose the appropriate product solutions for your life goals

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REVIEW

We will track your progress in achieving your life goals

What do you want us to work on today?

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Let us talk about your dreams/goals/worries/concerns. What do you think are your life goals that we should be prioritizing now? We can help you create a financial plan and assist you all the way as you work your way up to your financial goals and dreams. Getting started isn’t easy, but with a proper plan, you can get there.

Money Monkeys can assist you:

CONTACT US OR REQUEST FOR AN APPOINTMENT

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