There's a world out there that wants a piece of us. It promises us wealth, happiness, and well-being if we just give it our money.
That's why today I want to talk about the importance of saving and share a few rules with you to avoid being dazzled by shiny objects, which end up giving us a harsh lesson and sabotage us from generating real wealth.
The starting point is hitting rock bottom. Understanding where we are financially, accepting why we are here, defining where we want to go and why it's important to us, and establishing a simple strategy that takes us a little out of our comfort zone to get there.
So, hitting rock bottom is accepting our reality and freeing ourselves from guilt. That's right, often we get into a counterproductive dynamic that sabotages our ability to change. We label ourselves in ways that disempower us. For example, "I can't save money" or "I don't know how to save." And the reality is that you can't or you don't know how to save because, on your scale of values, you prioritize other things over saving.
Let me share an excellent exercise with you to free yourself from the guilt that's preventing you from getting to the bottom of why you haven't prioritized saving, so that afterward, lighter, you can embark on a new path.
Guilt has a perverse characteristic that prevents us from moving forward. Our ego doesn't want to feel guilty, so it keeps us in a dynamic of doing the same thing over and over again. To free ourselves from the feeling of guilt that our finances aren't where we think they should be, we have to make peace with our reality.
To do this, let's do the following exercise: get a piece of paper and put the title, “Benefits of Having Spent My Money,” and below it two columns, one that says Benefits for Me and another that says Benefits for Others. Now, write under each heading all the good things that expense brought you and others. Write, write, and write, at least 100 good things under each heading. Free yourself from all guilt. Remember. Aim. Enjoy. It's already over. Accept, be thankful, and feel at peace with the past.
Now, let's change your savings paradigm and give it a new hierarchy in your value system. Again, take a piece of paper and put «The Benefits of Saving» at the top. And just like in the previous exercise, write the benefits of saving for yourself in one column and the benefits for others in the other. Write, write, and write. Let the benefits flow. Let them envelop you, inspire you, and give you the wings to save. Feel the empowerment, peace, freedom, and joy of becoming the owner of your economic destiny.
The next step is to determine how to get started and how much to save. Sociological studies have shown that people can easily part with 10% of their income. That is why, for thousands of years, various social movements have promoted tithing.
In our case, since we want this to push us a little outside of our comfort zone, and Let's pick up the pace a little—we're going to add one more 10%. In other words, if you earn 10,000 pesos a month, we're going to save not 1,000, but 1,100 pesos.
Now, here’s something really important: start by simply saving cash. And only after you’ve built up a solid financial cushion—equivalent to six months’ income—should you allow yourself, if you wish, to start investing part of your capital in riskier assets in search of higher returns. Here, once again, the 10% principle applies. To maintain your emotional balance, invest only the 10% of your capital in a risky investment. This will prevent you from losing all your savings when the market drops, while also giving you the chance to benefit a little when it rises. Without pain, everything goes better.
In summary, no one will look out for our financial health better than we will ourselves.
Over the years, most of us have been seduced by consumer marketing. And this has placed saving very low on our hierarchy of values.
The time has come to establish where savings fit in our hierarchy so that we can face the future with greater certainty, peace of mind, and joy.
I invite you to complete the exercises I present here and discover the great pleasure of taking control of your financial destiny.