PLAN YOUR FINANCES EBOOK - MJ

6 Steps To Make Your Budget Crisis-Proof QUENNIE BALIDOY



Hi MJ, Thank you so much for your buying this eBook. Your support would help selected public schools in Benguet to buy their needed safety and school supplies for School Year 2020-21. It is my prayer that this eBook would help you in your journey to financial wellness so you can bless more people. Much Love,



What they say about this book “Quennie is amazing. If you want to grow in your financial life, use this practical, inspiring book as your ladder to financial freedom.” – Bo Sanchez, bestselling author \"Surely, there are major things that stand out in this book by Quennie. First is the fact that it is simple and practical. Anyone who wants to improve his or her financial position will benefit from it. Second, she has provided steps, guides, and tables that are easy to follow and complete. One of the main reasons why people avoid financial planning is because it oftentimes looks too complicated. As a result of these two main points, readers can readily execute. This is where the \"rubber meets the road\" and where genuine lessons can lead to a substantial difference in one's financial journey.\" – Rex Mendoza, President & CEO, Rampver Financials “Superb! It's a complete financial literacy and personal finance book with a doable task at the end of each topic towards financial freedom! This book will help you appreciate about insurance and its benefits.” – Dr. Elizabeth Trinidad, Professor and Undergraduate Research Coordinator, Department of Financial Management, Saint Louis University This is your personal copy. Illegal distribution is punishable by law.

\"A genius, in my vocabulary, is one who can simplify and explain complex subject matters. Quennie is a genius! Here’s a book on personal finance that’s inspiring and understandable. Her stories are based on experience. Her examples are relatable. Awesome job, Quennie! Rock on!” – Boggs Burbos, District Builder Light of Jesus Family - North Luzon District “Simple and easy-to-follow. This book made me review my financial practices and improve them to have better financial standing. Turn the pages to find out how to prepare for emergencies, eliminate debts, and grow your money for your future. Plus more!” – Chris Dao-anis, Speech/Book Coach, Speaker, Author \"Being financially literate can attribute to the acronym YOLO (you only live once). Equipping yourself with the tools that you need and understanding how you can maximize your financial resources will lead you to enjoy a more fulfilling life. Having the right mindset will provide you the realization to attain you short term or long term goals. Should this book and the worksheets been available early, I would have been more confident of retiring early.\" – Bench Bacani, Events Specialist, IT Faculty This is your personal copy. Illegal distribution is punishable by law.

“From budgeting your current funds, managing your debt, to planning your next trip, even surviving this pandemic, Quennie has made it easier at the same time relatable for readers on how to properly plan their finances.” – Mari Fides “GOEY” Bondoc Certified Investment Solicitor “Queen B’s (Quennie’s) clear, straightforward and real-life suggestions will sting you. But it’s so worth it! Read this book, apply every point, and you’ll end up RICH!... with sweet, sweet honey.” – Coach Jonathan “J” Yogawin Professional NLP Trainer, Strengths Coach and Leadership Consultant, Feast Builder (LOJF) “Don’t be deceived by the simplicity of this book. Its down to earth wisdom leads one to plan and dream of financial freedom. As Quennie shares from her own experiences, she makes us feel that there is still hope from whatever financial rut we are in right now. She leads us step by step, making us realize that financial freedom is not as elusive as it seems to be. Quennie is indeed a #messengerofhope.” – Malou Coronacion Team Sunstars, Branch Head - AXA Phils. This is your personal copy. Illegal distribution is punishable by law.

\"Practical, sensible and easy to apply, this book is a must- read if you want to get your finances on track! It’s a book with topics that everyone should have learned about in school. Planning, saving, protecting, investing and growing your money are all discussed here in a no-nonsense approach with stories and examples along the way! If more Filipinos learned and applied everything in here, our country would greatly be lifted from poverty. I can guarantee that reading this book, completing the worksheets and applying the principles will soon make a big difference in your financial status!\" – Lianne Laruan-Dolique Health/Wellness Entrepreneur “I personally dread talks and arrangements for finance and finance management from advisors. For one, they scare you and make you feel you are going down the drain if you won't enlist. This book did not. It opened to me important financial life realities which did not scare me but inspire me to seriously tackle my options, possibilities, and eventually, financial security. Thank you, Engr. Queenie, for helping me \"triage\" my finances though this awesome chef d'oeuvre.” – Prof. Andrew S. Macalma, MS Psych, MBA, LPT, RPsy, RPm | Registrar, Saint Louis University This is your personal copy. Illegal distribution is punishable by law.

PLAN YOUR FINANCES QUENNIE BALIDOY This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances ISBN 978-621-8222-01-4 QUENNIE BALIDOY Philippine Copyright © 2020 by Quennie Lynn Balidoy All rights reserved. No part of this book may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical means, without prior written permission from the author or publisher, except in the case of brief quotations. Cover Design by MJ Baltazar Interior Layout by Chris Dao-anis Published by: MESSENGEROFHOPE BOOK PUBLISHING Lot 30 Block 3, World Vision Alley East Quirino Hill, Baguio City 2600 (63) 999-718-0444 This is your personal copy. Illegal distribution is punishable by law.

Dedication To our Almighty God who is the source of all the good things I have. To my loving husband Egay who works so hard to provide our family a comfortable life. To my smart sons Matt and Josh who give joy to my life. To my Dad Evo and Mom Lydia who provided me a good education. To my siblings MJ and Leah who are my forever support system. To my clients and all working individuals who have big dreams for them and their families. This is your personal copy. Illegal distribution is punishable by law.

This is your personal copy. Illegal distribution is punishable by law.

Acknowledgments I want to express my gratitude to: My book coach, Chris Dao-anis, for all the wonderful insights he gave, for the editing and the interior layout of this book. I wouldn’t be able to start writing this book and complete it in a few months without his guidance; My sister, MJ, for the cover design of my book. It is such a big help to have somebody like you who create good designs fast; My Philam Life and PAMI clients, for the inspiration of writing this book. Your trust gives me courage to continue with my mission to educate more people financially; Bo Sanchez, Rex Mendoza and the Truly Rich Club mentors, for all the financial tips imparted. Without your financial wisdom which you freely give, I wouldn’t be able to realize the importance of managing one’s finances well; My Facebook friends who gave valuable inputs regarding the final title and cover design. Your responses are affirmation that I need to publish this book; v This is your personal copy. Illegal distribution is punishable by law.

Acknowledgments Augustin Dao-anis, for proofreading my manuscript; and, My Philam Life family, for the informative webinars provided during the quarantine period. These allowed me to go back to the main purpose why I decided to become a financial advisor – to contribute to the improvement of financial literacy in the country. vi This is your personal copy. Illegal distribution is punishable by law.

Table of Contents Dedication iii v Acknowledgments 1 3 Introduction. Crisis-Proof Your Finances 21 41 Chapter 1. Have a Wealthy Financial Mindset 51 61 Chapter 2. Set Financial Goals 67 87 Chapter 3. Evaluate Your Present Budget 101 121 Chapter 4. Have a Positive Cash Flow 129 Chapter 5. Build an Emergency Fund Chapter 6. Protect Yourself Chapter 7. Eliminate Debt Chapter 8. Grow Your Money Chapter 9. Create a Crisis-Proof Budget About the Author vii This is your personal copy. Illegal distribution is punishable by law.

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Introduction Crisis-Proof Your Finances Are you struggling on how to make ends meet? Do you wonder why your money seem not enough for your expenses? Do you find yourself always filing for a loan whenever there is an emergency? Have you wished that you have enough funds to buy your own house, travel leisurely with your loved ones and retire comfortably? More than 10 years ago, my husband and I found ourselves buried in credit card debt. We were the typical working persons who only rely on their pay checks for their needs, would swipe their credit cards to buy unnecessary things on sale, with no investments, and would file a loan during an emergency. We had good and stable careers. My husband was an engineering manager in a semiconductor company and I was a professor in one of the universities in Baguio City, Philippines. We did not spend much in the education of our two sons since their tuition fees were free as a faculty privilege. But I was wondering why we struggled in saving money even if both of us were working with above-average salaries which even increased every year. Where have all our earnings gone? 1 This is your personal copy. Illegal distribution is punishable by law.

Introduction It is a good thing I found solutions to our financial dilemma through the help of several financial mentors. We learned how to eliminate our debt, manage our money and even multiply them. We now have a way much better financial status. And it is now my desire to help those who are like us before. If you used to be like me, a hard-working Filipino but whose earnings do not seem to meet what you wanted to achieve in life, this book is for you. In this book, I shared practical principles that I learned in our journey. I hope they will help you set your financial goals and meet them. I pray that this will empower you to take charge of and crisis-proof your finances so you may achieve your dreams and goals. 2 This is your personal copy. Illegal distribution is punishable by law.

Chapter 1 Have a Wealthy Financial Mindset Since I was a kid, I know money struggle is real. I saw my parents work hard but it always seemed that we didn’t have enough money for our needs and wants. They took turns working abroad for a higher salary because my mom wanted my siblings and I to finish our basic education in a private school. My mom believed if she could give us good education, we would be in a far better financial status. I saw my mom and dad struggled with money which often led to fights. I said to myself, “Kailangan kong mag-aral ng mabuti para makatulong. Baka kung maka-discount ako sa tuition, di na sila mag-aaway.” (I should study well so I could help. If I get a discount in my tuition fee, they might not fight anymore.) When I was in high school, I studied hard and aimed to be at the top of my class so I could get full discount in my tuition fee. I did graduate valedictorian from high school, graduated with an engineering degree from UP Diliman, became a licensed engineer and started my career. 3 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset During college, I met my husband – hard-working, intelligent and whose family also struggled with money. Armed with good college degrees from a prestigious institution, we were confident we would have good careers. And we did! After only three years of working in a big semiconductor company in Baguio City, my husband was promoted from being an operations engineer to a manager and his salary doubled. I worked as a university researcher in the College of Engineering of UP Diliman and when I finished my master’s degree in engineering, I decided to join my husband in Baguio. I got accepted as a mathematics professor in one of the big universities in the city. After two years, I became a regular faculty member which allowed us to minimize the educational expenses of our sons because of the free tuition fee privilege. Since we had more money than we had before, we also spent more. We would dine out every week with our sons and bought a lot of toys and books for them. Whenever there is a sale, we would buy items even if we didn’t need them. We bought grocery items without considering our budget. 4 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances At the back of our minds, there would always be money since we both had a stable job. Unfortunately, after about ten years of working, we found ourselves buried in credit card debt. I asked myself, “Why again are we struggling with money? Isn’t having good careers with good salaries enough?” I wanted to raise our family together so the possibility for my husband to work overseas was never an option. I had to find answers to my money problems. Everything Starts in the Mind In 2009, my husband and I enrolled in leadership seminars organized by Organizational Change Consultants International Inc (OCCI). We first learned there that beliefs are powerful. We were given this formula: 100% Beliefs = 100% Results I doubted this formula then. I asked myself, “How do you get results if there are no actions? “ The facilitator explained that if one truly believes, it is impossible not to take action. It took time for me to digest that and to let the idea sink in my mind. 5 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset After some training and coaching, I was able to apply the formula to achieve some of my career goals. I was able to create a workbook in Algebra which I used in class. I became a Competent Communicator and took on a leadership role in a Toastmasters Club (a non- profit organization focused on developing leadership and public speaking skills). I became more creative during classroom discussions that my students became more engaged and I consistently got a high faculty evaluation score. I graduated magna cum laude in my master’s degree in Mathematics education. I didn’t realize that what I learned in the seminar is also applicable to my financial goals. After a few years, I came across the Truly Rich Club of Bo Sanchez. I got interested and joined. I watched and listened to the video talks provided and started learning about the right money beliefs. I bought books on financial literacy. I learned that the journey towards wealth starts in the mind. Our money beliefs affect how we utilize our money. Money Beliefs In his book, Secrets of the Millionaire Mind, T. Harv Eker mentioned that each one of us has its own money blueprint which will dictate the amount of wealth we can have. He said that we have a past 6 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances conditioning that determines our every thought (which includes our money beliefs) and that we tend to imitate our parents’ beliefs about money. If money has been a constant problem in your family since you were a kid, chances are you would pass down the same money problem to your children. The money problem cycle continues unless you decide to stop it. Aside from our parents, our money beliefs also came from our relatives, friends and the media. If your parents, your relatives and friends do not have the proper financial mindset, most likely you also do not have. It is said that you are the average of the five people you usually hang out with. Who are the five friends you are always with? How is their finances? How is their income? As the saying goes, “Tell me who your friends are and I will tell you who you are.” Let me change that a bit, “Tell me who your friends are, and I will tell how rich you are.” The media also influence much how we think especially if most of the time we are glued to our TV sets as well as Facebook or YouTube. It is a fact that we get influenced by the thoughts or comments we hear daily. So, we have to choose well what we listen to or watch. 7 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset Let me share with you two general negative money beliefs that you might have encountered. If you have them, I urge you to erase them. Negative Money Belief 1: Money is the root of all evil. You may have heard the above statement before and you might even agree. This idea is normally shown in the characters in many telenovelas. You see it on television. The hero (or heroine) is poor, kind, meek and God-fearing while the villain is rich, greedy, dishonest and uses his money to get what he wants at the expense of the hero. Though this might be true in some cases, this typical portrayal of a hero and villain is not always the case in real life. This simplistic plot of telenovelas goes into the subconscious of many viewers and they would see money as the source of evil. Since they are being fed with this wrong notion almost daily, they would subconsciously resist becoming wealthy because internally, they are afraid that they would end up like the villains they are watching. I used to watch telenovelas when I was younger. I would empathize at the heroine and would ask myself 8 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances why God would allow good people to be poor and bad people to be rich. The telenovelas made me not to dwell on the insufficiency of our household funds but it assured me that since we were not rich, I would not be the villain. I was waiting for a rich villain then who would make my life miserable but I met none. My classmates who were well-off would invite me to their houses for celebration and their parents treated us nicely. My Ninang Aida who had a flourishing business would always give me money whenever she saw me. I only saw generous wealthy people. Some would say that it is written in the Bible that money is the root of all evil, which is not accurate. It is written in 1 Timothy 6:10, “For the love of money is the root of all evils, and some people in their desire for it have strayed from the faith and have pierced themselves with many pains.” It is clear in the verse that money alone will not make anyone sin but the desire for money above anything else will. This love of money points to one of the capital sins which is greed. There might be some corrupt officials in the government who are greedy but I have read about wealthy businessmen like Bo Sanchez, Tony Meloto, 9 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset Facebook founder Mark Zuckerberg among others who give a lot to charity. As servant leaders of our spiritual community called The Feast North Luzon Baguio, my husband and I will not be able to support our ministries if we are not earning much. As Bo Sanchez says in the Truly Rich Club, the real purpose of wealth is to help others. One cannot help much if one doesn’t have enough. Money will not make you evil. A portion of your money, if given to the church or charitable institutions will surely bless a lot of people. It can feed children who are hungry in Africa. It can send poor but deserving students to school in far flung areas of the country. It can provide personal protective equipment (PPE) for the frontliners during pandemics like the Covid-19. It could help sustain a charitable institution, a church or a non-government organization which are established with the primary purpose to make this world a better place to live in. Instead of believing that money is the root of all evil, believe that your money can be a source of blessing in this world. 10 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances Negative Money Belief 2: I am not capable of having much money. This is another misconception about money. There are people who resist to earn more and would rather stay poor. They would say that they didn’t have good college degrees, didn’t graduate from good universities and are not lucky enough to land a job and earn. These people would simply rely on their relatives who seem to be luckier than them in terms of having money. They would just ask for money and not work hard for it. Unfortunately, these people are the ones who only waste their time watching telenovelas or playing computer games instead of finding ways to earn. Manny Pacquiao is an example that one doesn’t need a good college degree to be successful. Pacquiao’s extra-ordinary drive made him tremendously successful in his chosen field of boxing. He believes he can be great and he did become one. During the recent crisis, he was one of the few senators who was actively helping a lot of Filipinos survive the crisis through his foundation. In the insurance industry, I have met some people who do not have college degrees but their extra- ordinary drive made them earn more than what I was earning as a college professor. These people are always 11 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset willing to learn and improve themselves so that they can meet their sales targets and earn more. If we are going to analyze it, these people who say they can’t earn lots of money focus more on the obstacles rather than the opportunities. Some are just plain lazy and not willing to get out of their comfort zone. As the saying in Filipino goes, “Kung gusto, maraming paraan; kung ayaw, maraming dahilan.” (If you want, you find ways; if you don’t want, you find reasons.) Say to yourself with conviction, \"I am capable of earning much money!” Wealth Formula Anyone likes to be financially free. But what does it mean to be financially free? I asked some of my clients their definition or description of financial freedom. These are some of their answers: o If I can buy anything I want without minding the price o Able to save more than enough money to sustain my family’s current and future finances and not worrying about paying debts and bills o Continuous income flow with minimal direct labor while having much time for personal activities/aspirations/wants 12 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances o It is when you have enough cash flow to sustain the lifestyle you want. Having a sustainable environment where you need not worry about financial matters. It’s when you are able to give than to receive o Having enough savings/income to use or pay for necessary/basic expenses without having to be employed or dependent on others o The point in your life when you don’t worry too much about your living expenses tomorrow because you saved something yesterday o Doing what you love while being prepared for any risks that may degrade the quality of life for you and your loved ones o Reverse tithing to help others where only 10% of my income is used to sustain me and my family’s needs o Having the peace of mind that can only be brought when you have attained your financial aspirations o The ability to live a sustainable life wherein we can give our children what they deserve o The ability to not worry about the financial constraint on the important things in your life. It is freedom from anxiety of not having enough. 13 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset It’s also like having a handy extra set of arms to handle a problem o Out of the rat race at age 45 o Being able to do the things I love by myself and with my family without worrying about finances, to travel with my family, to buy what we need without thinking about where to get money the following week, to have sufficient money to pay for the bills without having to think where to source it from. Financial freedom is being able to spend for things that matter without worrying about the following days Robert Kiyosaki in his book Rich Dad, Poor Dad, described financial freedom as being away from the rat race. The rat race is way of life where we struggle to compete for wealth or power. It is a lifestyle which nobody wants but is forced to have because of the lack of financial literacy. People living in the rat race use the poverty formula: Earnings – Expenses = Savings + Investments In this formula, most of the time, if not all the time, there is none left for savings and investments. Worse, the right side of the equation is negative. That is, expenses are greater than the earnings. If this 14 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances happens, most people will borrow money just to make ends meet. My husband and I, in the early years of our marriage followed this formula, so even though our salaries increased every year, we still found ourselves in debt. Fortunately, I learned that there is a formula that good people used to accumulate wealth. I call it the wealth formula: Earnings – Tithes – Savings – Investments = Expenses After receiving your earnings from your salary, commissions or businesses, set aside at least 10 percent of your income for God’s work to continue. This is called tithes. In the Bible, God promised to pour down blessings to those who faithfully tithe for His Kingdom. We read that in the following verse. Malachi 3:10 Bring the whole tithe into the storehouse, that there may be food in my house, and try me in this, says the LORD of hosts: Shall I not open for you the floodgates of heaven, to pour down blessing upon you without measure? Tithing is a form of thanksgiving to God for all the blessings He has given. It is acknowledging His divine power over us. 15 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset At the end of our lives, we cannot bring our money with us. Giving a portion of our money to the church would help spread the word of God which gives messages of hope to people. When we give to charitable institutions, we become sources of blessings to the poor and the needy. Basic necessities could be provided for the abandoned elderly. An educational fund could be provided for the poor but deserving children and youth who like to go to school. A medical help fund could be created for the critically ill who do not have much financial resources. When we tithe, we allow goodness to prosper in this world. When my husband and I first started to give faithfully to God’s work through The Feast and the Catholic Church, blessings started to pour down. My husband is continuously given performance bonuses from his company and receive significant annual salary increase. I was led to a career with a more flexible time and with more potential for income growth. My eldest son passed the entrance exams at UP Diliman and was able to qualify for two academic scholarships – UP Oblation scholarship and Department of Science and Technology (DOST) scholarship – which entitled him free tuition fee, book allowance and a monthly stipend for his college education. We are able to save (and decided to re-invest) around 85 percent of his college 16 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances educational fund because of these. Truly, God cannot be outdone in generosity. Another 10 percent of your income should go to your savings fund. You need this fund for emergency use. I learned from Bo Sanchez to have an emergency fund that is worth three to six times of your monthly expenses. With the recent economic crisis (caused by the Covid-19 pandemic) which is ongoing for more than five months, an emergency fund of more than six months is recommended. This emergency fund would help you lessen the negative financial impact of a crisis on your budget and would buy you time to find other means to replace what you lost financially. We will talk more about this on Chapter 5. Another 10 percent of your income should go to investments. This fund is for your future use to meet your financial goals and should be placed on investment vehicles that would beat the inflation rate. Some of these financial goals might be a good education for your child, a comfortable retirement or your dream house. We will discuss this more on Chapter 8. This leaves a maximum of 70 percent of your income for your expenses. You might say that it is impossible but it is doable. 17 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset If you look at your list of expenses, some of them are wants that you can do without. You can minimize your non-essential expenses. We will discuss more of this on Chapter 3. You can also find ways to increase your income if what you are earning now is not enough. We will discuss this more on Chapter 4. Financial freedom is possible if you have the correct money mindset. Decide now and choose to be wealthy. +++++ 18 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances Apply! Is there a money mindset that you must change? If yes, write it below and change it to the right money mindset. If your answer is no, what is the money mindset that is working for you now? Write it below. ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ ________________________________________________________________ 19 This is your personal copy. Illegal distribution is punishable by law.

Have a Wealthy Financial Mindset Using the wealth formula, compute the following. An example is given on the second column. Example Your Data Average monthly 50,000 earnings Tithes (10% of 5,000 earnings) Savings (10% of 5,000 earnings) Investments (10% 5,000 earnings) Expenses (70% 35,000 earnings) 20 This is your personal copy. Illegal distribution is punishable by law.

Chapter 2 Set Financial Goals At the start of every year, instead of writing my new year’s resolution, I would write my goals for the year. I also encourage my husband and my two sons to do the same. I make sure that our family goals are in- sync so we can help each other with our goals. Last year, a personal goal I set was a family trip outside the country as a graduation gift to my son, Matt. Since it was a graduation gift to Matt, I had to ask him first what country he would like to go to. He had been to Singapore and Indonesia the previous years because of international competitions but he never travelled with my husband and his brother outside the country. Our family has travelled to several places within the country but it was the first time for us to travel together internationally so everyone was excited. The choice was Japan since all of us are fond of Japanese food. I planned for around five months for the trip. Since I planned well, we were able to go to places we wanted to go and ate the food we wanted to eat within the budget that my husband and I set. It was a trip that all of us truly enjoyed. 21 This is your personal copy. Illegal distribution is punishable by law.

Set Financial Goals What differentiates a goal from a wish are action plans and deadlines. In our Japan trip, I planned and made specific steps towards the goal and had to coordinate with my family the perfect time to have the trip. It was a travel goal but it was also a financial goal since if we didn’t have enough budget for the trip, it wouldn’t be as enjoyable as it was. Financial goals are those that involve money and your financial status. These goals vary for every person and in every stage of life. A single person would definitely have a different financial goal compared to a married person. A married person with young kids has a different goal contrasted with a married person who is about to retire. Let me share with you some ways on how you can set a goal well. Later you will realize most of your goals would fall under financial goals. Begin with the End in Mind Dr. Stephen Covey, in his book 7 Habits of Highly Effective People, said “Begin with the end in mind.” It is important that we clearly see what it is that we want to achieve. But sometimes, it is difficult to envision who you want to be or what you want to achieve. Around five years ago, I encountered this challenge when I started to contemplate on shifting careers. To be clear with 22 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances what I wanted in life, I listed the important goals that I want to accomplish in ten years. When I decided to quit my teaching job to pursue a career in financial services, I went back to this list and got an affirmation that I made the right decision. In the list, it is written that I like to travel more frequently, to care more for my physical well-being and to have a flexible working time. There were several affirmations that I made the right choice of quitting my full-time employment. After several months of quitting my job, people whom I know would tell me, “Gumaganda ka!” (You are becoming beautiful!) It showed in my countenance that I am happier and less stressed. During those times, my husband said yes to be the leader of our spiritual community. He had been asked several times before but he could not give his yes because he was considering how demanding his work environment could be at times. Quitting his job to do full time community work is not an option since he hasn’t met his target retirement fund yet. He needed me to assist him in this new role. Since I have more flexible working hours, it is easier for me to support him in leading our community compared to when I was employed full-time. 23 This is your personal copy. Illegal distribution is punishable by law.

Set Financial Goals After more than a year of being full time in the financial services, my commissions became equal to my former salary as a professor and I even qualified to a travel incentive to Hokkaido, Japan. I would not have this travel opportunity if I stayed in my former career. Take time now to reflect and list the goals you want to accomplish in a year, in five years, in ten years or in twenty years. The longer time frame, the better. Know Your Emotional Why If you do not attach an emotional value to your goal, most likely you will not pursue it. You need to ask why is it that you want to meet that goal because it is this why that you go back to when you encounter obstacles in meeting the goal. Your emotional why will drive you to continue in spite of the obstacles. Your emotional why must be clear to you. When I was in high school, aiming to be in Rank 1 was more than receiving the recognition. My big emotional why was to help my parents with our finances. Our school gave a 100 percent discount on tuition fee for all Rank 1 students per level. The discount was a big help to my parents. Even if I have been dreaming of becoming an author since 2009 and have been invited to book 24 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances coaching programs several times a few years back, it is only now that I decided to write a book. Why? I saw on the news how a lot of Filipinos were affected financially because of the crisis. It is good that my husband and I are prepared because we are now financially literate. But if this crisis happened when I was young, my parents, siblings and I could have been one of those greatly affected since my parents then were living only from pay check to pay check. Realizing that, I decided to be more aggressive in reaching out to more people in planning their finances. My emotional why is to reach more people in my advocacy to help increase financial literacy in the Philippines. Since my husband is a good provider, I do not really need to work but I still aim to be a member of the top two percent financial advisors in the world who are called Million Dollar Round Table (MDRT) qualifiers this year. Why? I wanted to help increase our household income so my husband can retire comfortably in a few years’ time. I also like to travel with our sons to our dream destinations while my husband and I are still capable and mobile. And I want to give more to the ministries I am supporting. 25 This is your personal copy. Illegal distribution is punishable by law.

Set Financial Goals To help you know your emotional why, ask yourself, “Why am I working hard?” If you cannot give the reason, ask, “To whom am I dedicating all my efforts?” When I set my family goal trip to Japan, it was clear to me that I am doing it for my eldest son as a reward for his academic efforts, to have my youngest son Josh to travel outside the country with us, and to spend seven days of wonderful memories as a family. More than being able to fulfill the goal, the trip is for my sons’ happiness. Normally, we would exert much effort for our loved ones than for ourselves. Go back to your list of goals. Include your emotional why for each goal. Be WISE In listing your goals, I recommend that you write them as WISE. WISE is an acronym for worthy, imaginative, superb, and exact. Worthy means your goal should have a real value to you. What is the highest positive intention do you have for this goal? Would it bring you peace, love and happiness? What values would it unleash in you while accomplishing the goal? Will accomplishment of this goal lead you to a better version of yourself? Would you be more loving, 26 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances committed and inspiring when you accomplish this goal? When I was planning for our Japan trip, my highest positive intention is for my family to be happy. While accomplishing the goal, I tapped into my arranger skills as I planned, coordinated and researched our itinerary for seven days. I became a more loving mom and wife achieving the goal because I sacrificed some of my time planning for it just to make my family happy. Imaginative means you should make your goals clear and well-defined. You should be able to visualize it. You should ask who, what, where and when. If your goal is to travel, “Who are you with? Are you traveling alone, with your loved one or with your family? Where exactly do you like to travel? How many days are you allotting for travel?” The more details you have, the better. It is best if you can make a vision board of your goal. Last year, months before our scheduled family trip, I had on the homescreen of my iPad, a picture of me and my family riding the famous Harry Potter and Forbidden journey ride in Universal Studios Japan as well as a picture of the Shinkansen or bullet train overlooking the Mt. Fuji in Tokyo. It is true that what the mind can conceive, it can achieve. 27 This is your personal copy. Illegal distribution is punishable by law.

Set Financial Goals Superb means that your goals should be big, something that would excite you. It should be something that you haven’t done before but you know you can attain it. Our Japan trip is special because it was the first time my family and I travelled internationally. Our target expense then was five times more than what we usually spend for our local trips. Though the expense was big, the trip brought excitement to our family. Exact means you have to set criteria to track the progress of your goal. You should be able to know if you have reached your goal. It should also include a deadline for your goal. When do you want to accomplish it? If you have set a target date for your goal, you will most likely maximize your time in accomplishing it. As much as possible, quantify your goal by setting small action plans toward the fulfillment of your goals. In our Japan Trip, I set first the target dates of our trip. I listed the places we wanted to visit and the food we wanted to eat. I checked airline schedules and the transportation system in Japan. I also looked for a decent hotel which was close to the train stations. I made a detailed itinerary. We were not able to do all of those listed in the itinerary but we accomplished the major ones. 28 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances The more detailed the plan, the better. Go back to the list of goals you have written. Rewrite them as WISE goals. Financial Needs Most of your goals require money to be accomplished. The ultimate goal of any financial goal is to be financially free. From my clients’ definition of financial freedom in the previous chapter, these are things they want to achieve to be called financially free: - freedom from debt, - having enough money for current needs, - ability to provide for wants such as travel and dining out, - not worrying about future needs such as hospitalization and old age, - capacity to retire early, and - being able to tithe or give more. In a financial advisor’s point of view, there are four financial needs that people should be able to meet namely, income replacement, income protection, retirement fund, and educational plan. Most people nowadays would like to travel, buy a house, purchase a new car, and celebrate debut, 29 This is your personal copy. Illegal distribution is punishable by law.

Set Financial Goals graduation or anniversaries in a hotel but do not prioritize these four financial needs. Though it is true that we can find fulfillment (and even recognition) in having a big house or a fancy car, having these without prioritizing the four financial needs would definitely not lead to financial freedom. I would be discussing briefly some of these financial needs below. I will be expanding them in later chapters. Financial Need 1: Income Replacement Carl is a husband to Jen, they have three children. Being a breadwinner, Carl needs a fund that would support his family in case of untimely death. He knows that they would need money when they would have to transition from having him to living without him. Like you, he does not want to discuss death as much as possible, but he knew that when this happens, his family would not only lose a father but also the source of fund that he provides through his income. Being a responsible father, Carl got himself a life insurance with sufficient benefits that would replace his income to be used by his family in case the unfortunate event happens. 30 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances The purpose of life insurance is to replace the income lost due to the untimely death of a breadwinner. Dr. Sanjay Tolani recommended that a breadwinner should have a life insurance coverage of ten times his annual income. Though their life would never be the same again without him, the life insurance coverage of the breadwinner would help his family to adjust financially for ten years. Financial Need 2: Income Protection Gina is a working mother of two young children. She has a family history of cancer. Being a mom, she needs a fund that would support her in case there is a diagnosis of cancer or any other critical illness. She does her best to live a healthy lifestyle but she knows it is best to protect her income. She saw how cancer depleted her parents’ savings and doesn’t want that to happen to her. Realizing this, she got an insurance that covers critical illnesses which would secure her income just in case she would be unable to work because of a critical illness. Jerry is a newlywed and a father to a toddler. His business requires him to travel more frequently. Knowing that accidents could happen anytime, he got an insurance with protection from total and permanent disability due to accident. He knows that the insurance 31 This is your personal copy. Illegal distribution is punishable by law.

Set Financial Goals can be a source of money for him or his family in case he couldn’t work due to disability. Dr. Tolani recommended that every individual should have five times his annual income coverage for protection from critical illness or disability. This amount would allow a person to have enough fund for medical costs associated with a critical illness or disability and would give him around five years of recovery period before he can start finding a source of income. Financial Need 3: Retirement Fund My husband wanted to retire earlier than the retirement age of 60. Though his salary is sufficient for our family, he wanted to spend more time doing volunteer community work. He knows though that retirement is his longest vacation so before he retires, he is making sure that he has enough retirement fund which would sustain his needs during retirement. He has seen some relatives and friends who depended on their children for their needs when they retired. He doesn’t want that to happen to him. He began investing years ago for his retirement fund because he knows that his company’s retirement fund will not be enough to sustain his needs during his retirement years. 32 This is your personal copy. Illegal distribution is punishable by law.

Plan Your Finances Financial Need 4: Education Fund Arvin and his wife, Ann, would like to give the best education for their two young children. They know they have two options – either they save and invest now and enjoy the interest later for their children’s education or spend now for non-essential expenses and lose money later by paying interest due to loan incurred if their fund will not be enough. Although some people are scared of getting an education fund because of what happened to some pre- need companies which collapsed and whose clients lost their money, Arvin and Ann realized that it is more fearful not to start this fund. They know that option one is the wiser choice. Other Financial Goals Other financial goals like buying a house, car, appliances, bags, gadgets, shoes, and travel tickets should only be the fifth priority in your list of financial goals. The COVID-19 pandemic causing lockdowns in many locations gave us a preview of our retirement. You wouldn’t need that expensive bags or shoes of yours when you are at home. Your big house is useless if you don’t have something to eat or worse, if you are sick in the hospital. You do not need an expensive 33 This is your personal copy. Illegal distribution is punishable by law.

Set Financial Goals phone or laptop to do your online work or attend online meetings. Go back to your list of goals. Rank them according to priority, 1 being the highest in priority. Then alongside it, put an estimated amount of money needed to accomplish your goal. To set financial goals well, remember to be clear with what you want to achieve. Attach an emotional why to your goals. Make them WISE goals. Prioritize the four financial needs. Make the most of your money by planning where each penny would go. +++++ 34 This is your personal copy. Illegal distribution is punishable by law.