Wednesday, April 30, 2014

On Taxes and Retirement + Some Financial Tips

I am not an accountant and I don't know much about taxes. I'm lucky that our HR department is the one in-charge with paying of our taxes.

Usually, we just receive our Income Tax Return on the first quarter of the year. Actually, I am not too concern about how much I paid and all I know is as a professional I am required to pay a 12% tax. Please correct me if I'm wrong but that's what I know right now.

When I was a new employee, I was surprised with how much the tax being deducted from my salary. But as the months and years goes by, I got used to it. Until I got married and is now entitled to an exemption. An exemption that I don't actually feel there is. Do you agree?

Well of course I want to learn more about taxes and also some tax tips when I'll retire. Speaking of retirement, did I already told you that Daddy and I are planning to have an early retirement?

Our plan is for me to retire first at age of 40. So what we are doing so we can achieve this goal, here's some tips I can share with you:

1. We are more conscious in spending money. Last January, we started tracking our expenses, I make a spreadsheet that looks like this:

It's up to you how will you divide or categorized your expenses, as long as you can track all your expenses. When I say all of your expenses, I mean all from cents to thousands. Through this, I can easily see how much we are spending each month and we noticed that it's always the food that get the most money each month. More particularly is the grocery expenses. I know it's food but then again maybe I should review our grocery list and see where can I save. I hope Daddy will be more cooperative because he's buying so many baking stuffs lately, haha.

2. We prioritize saving. This year also, Daddy and I agreed to prioritize saving before spending. So I do a sheet again so I can keep track of our savings each month.

The savings may not be much but it's just enough for us. As you can see, we are not fond of buying expensive stuffs and we are living a simple life. Also, if you notice, we also have a separate savings for Matt as he has a Junior Savings account too.

3. We determine priority of buying our needs. This is sometimes hard for us. There are times Daddy will tell me maybe I need this or that. I will always ask him back how urgent that need is or is it really that necessary. So we plan what we buy by determining how much we need it. If it's gadgets, bags, or clothes, it can always wait.

4. We maintain one credit card only. We used to have 5 credit cards before and it's not healthy, hehe. Through discipline we cut it down to one. We choose the credit card that's easy to pay, easy to use and has a credit limit that's just enough in case there's an emergency need.

5. We find ways to earn more. Though both us have our full time work, we still look for ways how we can earn more. Since we already have an online shop, we waste no time in making it grow and also use our skills in crocheting to add up more income. But I just need to warn you not to sacrifice the quality time with your family. I have been there and though you are earning the way you want, it will never be enough.

6. We always cook our own food at home. For sure, you know that Daddy loves to cook that's why we always cook our own food. Daddy even make our own longaniza, tocino, embutido and he's baking too. Lucky me, right? In this way, we can avoid frequent dining out. This does not just save us money but also assures us the safety of the food we eat.

6. Stay healthy. No matter how much money we can earn and save, still there's no amount of money can buy our health. This is the very reason why we want to retire early, so we can enjoy the fruits of our hard work.

Those are just some tips and I bet you have more tips to share. And oh, I am just talking about retirement from our current work. Because I am so sure I will never stop working, doing online selling, blogging and crocheting/crafting, because these are something that makes me happy =)

Do you want to retire early too? Remember this : It’s never too early to begin planning for retirement.
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