Compared to a lot of my peers, I didn’t really take to the idea of bumming around after college. I went straight to work, partially because of my dad’s pressure but at the same time for the independence of personal finance (I really didn’t want to ask my parents for money anymore).

When I first received my bank account (the account my mom created for me when I was a kid) when I was 18, I was fresh from high school and was probably the stupidest money spenders in the world. It came to a point where during my sophomore year I had probably depleted 70% of my mom’s original investment in that fund and had deposited less than PHP 3000 (69.42 USD) of my own money in that account.

Now that I have a full-time job (besides freelancing) I seriously didn’t want to fall into the same spending habits and actually learn to manage my finances properly.

For many fresh grads and young adults, managing money isn’t such a large priority as most of us can still rely on our parents (this is unless your like me with a dad pressuring you to start paying bills on your first pay check). So we spend money without really much thought.

I wouldn’t call myself a financial guru, but I found these tips I learned to be invaluable after getting my first paycheck.

1. Sit down and Plan your Finances

One of the best but over used cliche’s is “A failure to plan is a plan for failure”. This is probably one of the biggest mistakes young people make with their money including myself when I first got a plastic atm card in my hand. Yes you may think that you are “young” and you don’t need to plan things out yet or that your seriously over planning things but seriously your not.

By this I don’t really mean actually doing a daily pie-chart analysis (that might be paranoia… though I wanna try doing that someday). But it is definitely worth while to think about, specially if your a fresh graduate just starting to go job hunting, you have to understand what you have and how to live with what you have. This will also help you set goals for yourself and find a way to create a strategy for those goals.

I may have actually overdone this quite a bit as before I started going to job interviews I already made a Numbers spreadsheet and pie chart to plan based on possible monthly salaries but this has somehow given me a guideline to what I can and can’t do (for now).

2. Save first spend later

Saving money should be the first thing to come to one’s mind, not spending it (not even spending it for bills). Remember spending can always be controlled or adjusted (you can always cut back on eating out, choosing Mcdonalds or Jolibee instead of Chelsea or Spirals, using the car, buying inexplainably expensive coffee that just flames evil corporate giants’ pockets). Saving should be treated as a commitment rather than a chore as well, it isn’t really how much you save per month but remembering to actually save every month.

One of the best financial advice I got was from my mom. A lot of people think that saving should be done after spending. You’d get your paycheck, pay your bills, have some fun, then save the left overs. Saving shouldn’t be a “leftover”. The proper way to save is to actually save first, pay your bills then have fun with the left overs (have priorities ). This is also why it’s quite important to plan things ahead so you know how much to save.

Most analyst say you should save at least 10% of your salary. In the case here in the Philippines salaries usually come once a month or twice a month but either way 10% of that is a good target of saving. To be more concrete here is an example.

If you’re a fresh graduate, earning normally around PHP 15000 (almost 350 USD a month) 10% of that would be 1500. If you save 1500 every single month in a year your savings would have increased to 18000 in a short 5 years you would now have a total savings of 90000. This is not even including interest and possible salary increases.

Which leads to a second tip my mom gave me which applies mostly to Filipinos. If you are having trouble committing to saving, BPI has the solution just for you. BPI has what you call automatic Save-up accounts. These are accounts that automatically gets money from your main account and places it in your Save-up account on a specified interval. This way you will never really “forget” to save money as BPI has already done it for you. This is great if you’re finding it hard to control spending.

3. Create a budget

Welcome to the real world my friend and in the real world you won’t always have an unlimited source of income to fund your daily Omakase lunches. When your starting out learn to stick to a budget you can compare this as to having a mission and vision statement for a company, it helps you know what you can and cannot do.

Your budget doesn’t have to stay the same forever, but ten years from now when you find you and your family have more and more expenses you’ll be thankful you chose to drink that bottled water over the Starbucks frappucino years before.

4. It is never too early to start saving for retirement

One of the worst things you can do to your children is give them the financial burden of taking care of your debts and medical bills when your old and retired. Think about it, instead of making careers, saving the world and making their own families their worried about your liver-spotted ass not falling from the stairs.

One of the best reasons to start saving for retirement early is because the more time you have to save the less you have to initially invest (as compound interest will do its work). If you started saving at 20 or 25 saving 10% now is quite small but from the example above (without even factoring in interest) if you save PHP1500 per month = 18000 per year at age 65 you would have 720000, if you started at 35 you would have less amount of time to spend saving up that money.

5. Talk to your mom not your dad

It’s weird advice to be giving but in my case it’s paying off a lot. This is probably because of traditional gender roles but generally your mom is the manager of the household and therefore also the financial planner and manager of your household budget. Your dad may bring home the bacon but it’s your mom who decides what to spend it on . Your dad may know about all the corporate who-how but when it comes to personal finance your mom has all the experience you can think of.

In my case some of the financial advice I’ve gotten has been from my mom everything from learning to save (as seen from above) to learning about BPI save-up accounts to using the internet for online banking and bills payment (while my dad still insists on going to the Bank, the Phone company and the electric company separately).

It’s actually kind of funny cause when I first asked my mom about saving she taught me about the 10% rule, save-up accounts and looking out for investments while when I asked my dad (who studied accountancy and business administration) said “just spend for what you need and save what’s left”.

… yeap and just last week I had to pay for his dog’s dogfood.