The Evolution of My Income Allocation Strategy

Managing my money is a hobby. Allocating funds – separating my tithe, my investments fund, my emergency fund, my learning fund from my expenses fund every time I receive my income is fun for me. (You may find it weird.. but it is fun. Try it!

Years before, I do this using an envelope system. One envelope for each fund. I empty my tithe envelope every church day. I empty my investments envelope by depositing whatever amount I have accumulated to my investment accounts. The rest are left in my cabinet. Not a safe place, but is easy access whenever I need money.

Photo Credit: Money Saving Amanda

Saving through the envelope system worked for me years before, but as they say, we should find ways on improving our lives all the time. I changed the process, I shifted online, but with a record book. By the way, I remember how it puts a smile on my face… like this ^_____^ , every time I see those envelopes thicken over time. It is such a good sight. Gives me a different kind of high, during that time it made me feel good about myself. Oh… gone are those days…

Here is how I allocated my income in my second system. I receive and or deposit my income in my BPI account. I withdraw my tithe fund and keep it with me until my church day. Then, when I get home, I log in to my BPI express online account and transfer all my income allocated for my investments to my Citiseconline account and my Sun Life Variable Life account.

You see, I pay myself first.

I make sure that I do not use my money meant to provide plenty for my future needs and wants. Transferring this portion asap will keep myself from the temptation of spending it on things I just want but don’t really need. For the rest of my funds, I leave them on my account and keep a record book to check how much from each fund have I already consumed. Referring to my notebook all the time really did not please me. So I decided to open another bank account to keep my emergency fund from mixing up with my expense fund. But I spent days mulling over where to put my emergency money into, as to what type of account (time deposit? since I do not intend to touch it or a regular savings account? for easier access in case of emergencies), somehow in some way I came across BPI’s  Direct Save-Up account. After inquiries with the bank, I told myself this it, this is where I would keep my emergency money.

Why BPI Save-Up?

I am entitled to Life Insurance benefits. If death calls me (and my death does not require use of my fund… if its sudden death…), I’d be leaving more resources to provide for my family or future family (if blessed to have my own. I will have insurance on top of my existing Variable and Term Life with Sun Life. The coverage is 5x of my average daily emergency money. It is linked to my existing BPI account, subject to automatic fund transfers from my source account. If I have reached my ideal emergency fund amount, I can instruct my bank to stop the automatic transfers. I can also control the amount of transfers. And if time will come that I will need to use my emergency money, I could transfer my funds online from my Save-Up account to my source account so I could withdraw it without charges. I am just so pleased with the idea of my savings being multiplied 5 times to increase my support to my beneficiaries. I am happy with the benefits of and convenience in access of my emergency fund. I am pleased with my bonus! Case is now cleared.

Now I am considering opening up a BPI Advance account for my expense fund. I am attracted about the idea of earning interest first from every deposit into that account. I don’t have to wait until the end of the period with little or no money in that fund left before earning interest. XD I need to further learn about this though. Interest din yun… sayang.. pambayad sa pamasahe sa jeep.. Hahaha!

What is your income allocation strategy my friends?

Feel free to comment and share your thoughts! It’s fun learning from each others financial planning stories.

This is a guest post from Precious Mary Eugenio. Precious currently provides accounting management and consultancy services to an animation studio in Pasig City and is a Sun Life Advisor. She is not your regular career woman. She is adventurous and intentional in creating the kind of life she wants and she believes she deserves. You can get in touch with her at pmaeugenio@yahoo.com