PERSONAL FINANCE: Changing your life for the better

Source: Web

There are five key steps to “changing your life” and “becoming a better you” in terms of physical, emotional and financial awareness, television host Edric Mendoza said.

Step one is determining your purpose.

Mendoza cited the 3 M’s: master – who or what will you serve; mission – what will you do for who you serve; and mate – who will serve the master alongside you.

Mendoza said it is important to follow the sequence of master first, mission next and mate last, as this will dictate a person’s purpose and his or her short and long-term goals.

“Knowing your purpose will help you make your mission statement and tailor your goals,” he said.

The second step is setting clear goals in health, family, financial aspect and others.

At least one health goal is vital in becoming better, as physical fitness defines how effective a person can carry out his or her daily tasks and respond to emergency situations, Mendoza said. This is important in financial planning because health is needed in order to work more, earn more and spend more.

Family goals refer to goals one has for each of his or her family members, Mendoza said. This is also vital as it gives people the idea of how much money they will have to set aside to be able to realize these goals.

“Financial goals will help you determine what to invest in,” he said. Under financial goals, three things have to be taken into consideration: emergency fund, income protection and life stage goals.

Ideally, the emergency fund is three to six months worth of a person’s monthly expense. Income protection should also be given importance, especially by the bread winners.

“The easiest way to calculate how much money should be put into income protection is this: annual bread winner income divided by 6%,” he said.

People must not only prepare for emergencies, but also for expenses in specific life stages such as traveling, buying a house, and raising a family.

After determining the goals, step three is to create a plan of action.

“Having clear dreams and life goals will give you a compelling reason to save and invest rather than spend needlessly,” he said.

Step four is implementing and prioritizing plans.

According to Mendoza, not being able to prioritize well causes people to feel stressed or “stuck in a funk.” The general rule is to rank priorities from most important to least, and assess if they have been met whenever one feels stressed, he said.

“However, sometimes we feel like we’re stretched too thin, and that we have to do and be many different things. Since there is only one of us, we should learn the principle of convergence and apply it to our lives,” he added.

Convergence means to unite two or more priorities into one. Mendoza cited merging time with his kids into his work, and taking his kids to work, as an example of convergence.

With all the steps ready and in place, the last and most important step is to surrender and be prepared for detours, he said.

“You have to learn to let go and realize that things might not pan out the way you planned,” he said.

He added that keeping the faith and believing that things will work out will help one achieve his mission and reach his goals.

Although it may seem like a scary or daunting task to undertake, doing this will help one become more responsible and better prepared for the expected and unexpected circumstances in life.

“It’s like throwing a ball. Once you let go of the ball, you have no control over where it will land. You just have to trust that it will go where it needs to go,” Mendoza said.