Are you still thinking of a new year’s resolution? May I
suggest my friend the IT IS Life instead of the ISI Life?
Don’t worry I am not selling anything here. Plus it is just
a recommendation most especially to the people who may not be able to follow
the 52 Week Money Challenge. This is one good alternative to save regardless of
income bracket.
Are you ready? Then read carefully.
First let’s take the acronyms and define it.
ISI : Income –
Splurge (Expenses) = Investment
ISI sounds like “easy” refers to a method on how we usually
use our salary. From the equation alone, our income is deducted by our expenses
or splurges. Then what’s left would be directed to investments like savings. This
holds true if there’s still some amount left. But what if there’s none. Hence
no investment or savings at all.
Now who’s guilty of this formula? Raise your hands? (This is
me being a teacher in my blog). I too was guilty back then. When I started
earning my salary, I can’t help but be overwhelmed that is why I spend it in
food, clothes, shoes, bags and other girly stuffs. I am pretty complacent with
my expenses since I know after 15 days I would be getting another amount. Hence,
the splurges. I was living the ISI life. So after years of being a teacher, I still
end up with nothing. Zero. Nada. Wala. Walang wala.
Then it hit me, why not rearrange the ISI Life formula and
turn it to IT IS Life formula.
IT IS : Income –
Tithe – Investment = Splurge (Expenses)
Shifting from the ISI Life to the IT IS Life is nothing
short of difficult. I was not able to perfect it for a few paydays because I was
well accustomed to the ISI life. When my salary landed on my ATM, I withdraw it
also the same day and head to the nearest mall. Buy something and regret the item.
Then it repeats the next payday and so on. Yet, I so want to implement this.
My solution?
Let my bank get immediately from my income and what’s left
would be entered to my ATM.
How did I do it?
I negotiated with our local bank here to get this much
amount every payday of mine. Good thing the bank is connected to our payroll
system hence the transaction was a breeze. For instance, if I get 5,000 every
payday, our local bank will get 2,500 (the amount I told them). The 500 is for
Tithe purposes and the 2,000 for my investment or savings. Hence what will be
deposited to my ATM is 2,500. Then I will budget the 2,500 and stretch it until
the next payday.
With that mechanism, the bank is doing the automatic
investment or savings for me. So what’s left on my ATM would be the amount for
me to splurge or spend. Hence, I won’t regret a purchase since I know a portion
of my salary is directed to my savings already.
Going back to the example, if you were able to save as much
as 2,000 (2,500 – 500 for tithe) every payday, and there are 24 paydays in a
year, you will be able to save 48,000. Not to mention the interest it will
incur in the bank. Imagine if you redirect this amount or more in your
investment or savings, just how big you would be able to get. You may even
surpass the 52 Week Money Challenge grand amount!
Perhaps you might ask, how can you start shifting to the IT
IS Life?
Get a hold of your payroll and determine how much you are
getting. From there, identify the amount you would want to save per payday. Remember
10% for Tithe!
Talk to your local banks where your payroll is enrolled.
They have direct save up automatic savings option. Inform them to get this
amount every payday and deposit it your savings account. By the way, when
getting a savings account as much as possible choose the one that don’t have an
ATM card. So when you feel the need to withdraw, you can’t do it easily at any time
during the day. Har har har
So this 2014, let’s start with the IT IS Life. It may not be
easy I know. Been there, done that. But at the end of it all, you would be able
to control your money and also maximize the potential of your income. Drop ISI
and shift to IT IS! How’s this for a new year’s resolution?
P.S. To those doing the 52 Week Money Challenge, it is Week 2 already! Did you deposit the next amount yet?