For many young people, financial planning is the last thing on their minds. With a limited allowance or income (if you’re a working student) and the propensity to spend on clothing, food and gadgets, saving money is not easy.

 

However, it is possible to be money smart, even at a young age. Learning to save earlier in life is important, as it teaches you to be financially responsible, which will benefit you in the long run.

 

As a younger person, time is on your side because the interest earned by your savings will be compounded if you start planning your finances earlier.

 

Here are six steps to successful financial planning:

 

1.  Believe in yourself. Surround yourself with optimistic people who bring out the best in you and who have dreams and ambition, and by osmosis, they’ll help you define and realize your own. Avoid naysayers who undermine your self-esteem and confidence.

 

2. Define your goals. What are your dreams? Start with a list of 20, from short-term to long-term. In the beginning, material dreams come to mind—a house, a car, or the latest gadgets. Then, down the line, you realize your dreams become more intangible—happiness, love, security and the like. Remember to keep them in mind as they will help you push a little harder when the saving gets tough.

 

Cut down

 

3. Make a plan. After setting your goals, sit down and think of the steps in achieving them. How much is my monthly allowance? What are my spending habits?  What do I spend on, mostly? Can I do away with some of these, or at least lessen them? Cut down on some unnecessary expenditures: eating out, buying the latest gadget, splurging on a new wardrobe. What can I do to earn more? These lead to No. 4.

 

4. Take action. Budget your finances and look for ways to increase your monthly income. Apply for after-school jobs, research on small businesses you can get into alone or with friends, organize a garage sale to get rid of unnecessary stuff (it could be nicely cathartic, mind you).

 

Save now and spend smart! It doesn’t matter how much your allowance is. Saving P5 to P100 per week is a good foundation for great financial habits. Never spend more than what you have; think hard if you really need to spend, then save up for it and pay in cash. The best savers are those who put a limit to what they spend, be it 10 or 20 percent of their allowance, and the rest goes into the piggy bank.

 

Learning to save early ensures clever saving habits later on. One way is to have a savings account. You might be thinking that at this point, you won’t be able to meet the maintaining balance of a bank.  Here’s one initiative which could provide a solution.

 

BPI Globe BanKO (or BanKO) is the country’s first mobile phone-based savings bank. BanKO offers savings, loans, insurance and other financial services to the “unbanked.”

 

BanKO’s PondoKO savings account has no minimum daily balance required. Customers are able to cash-in as low as P50, so you can save even small amounts.   If your average daily balance reaches P2,000, it will earn 3-percent interest per annum.

 

The savings account is equipped with an ATM card so funds can be withdrawn from any ATM nationwide.  The BanKO ATM card may also be used as payment for purchases made in all accredited merchants.

 

Transactions

 

PondoKO account holders are able to perform the following transactions using their mobile phones:

 

• BuyLoad: purchase Globe or TM airtime load at a discounted rate.

 

• PayBills: make mobile bills payments to utility companies.

 

• SendMoney: transfer funds to another BanKO or GCash account.

 

• BuyInsurance: purchase microinsurance with protection against damage to property or accidental death.

 

PondoKO savings account holders are able to receive remittances from overseas, which may be cashed out at BanKO partner outlets or withdrawn at ATMs.

 

BanKO customers may also cash in and cash out at more than 7,000 GCash outlets and 2,000 partners nationwide.

 

To apply for a BanKO account, there are only three requirements:

 

A. One valid ID and its photocopy (barangay certificates are accepted)

 

B. P100 (P50 for the ATM card and P50 for the initial cash-in)

 

C. A Globe or TM SIM. Applicants only need to submit the requirements to a BanKO partner outlet, accomplish the application form and register using their mobile phones.

 

5. Make sacrifices. It won’t be easy to let go of certain habits but remember the why’s you listed down in No. 2. As the wealth and prosperity guru Randy Gage says, “Things don’t really get easier, you just get better.”

 

6. Never give up. “Be like a postage stamp. Stick to it till you get there,” advises Bob Proctor, founder of the Proctor Gallagher Business and Life Coaching Institute. Reading up on inspirational figures like him and Randy Gage helps buoy your spirits, and helps you anchor on your goal to be financially empowered, and to make your big dreams a reality.

 

For more information on BanKO services and their partner outlets, call tel. 7549980; head office: 4/F BanKO Center, Ortigas Ave., North Greenhills, San Juan.