Saving enough money for further education is one of the most common financial goals among Filipinos, and for good reason. Investments in postgraduate education or specialized training can contribute a lot to one’s career mobility and further financial success.
Such a significant goal requires discipline and financial literacy to accomplish if you want to save up for it on your own, but the initiative you take will likely reward you for the rest of your life. If you don’t know where to start, here are a few tips on how to manage your money for education, training, special certifications, and the like:
1) Master budgeting and expense tracking
First, you’ll want to practice the fundamentals of financial literacy and discipline in order to properly manage your money in the long term—particularly if your education will take a few years to accomplish or require you to move away from home. Knowing where your money goes and how much you save will go a long way towards making your educational investment more manageable.
You can start by listing your regular expenses, which include fixed bills such as rent, and shifting expenses, such as groceries and recreational spending. Set limits on these expenses according to your needs and income while keeping a portion for your personal savings. Then, decide how you’ll split your savings. It’s important to allocate to your education fund, but you’ll also need money for other crucial areas, such as your emergency fund.
2) Consider applying for a personal loan
There are two paths to consider if you want to make a major investment in something like education or specialized training. You could save up and only enroll once you’ve earned enough money to pay for tuition and fees in full. Alternatively, you could get a loan and apply for further education now, then slowly pay the loan back over the course of a few years. If you want to start moving up as soon as possible, you can opt to take the latter path and apply for a personal loan at a trusted bank.
Find out the maximum loan amount, then choose the financing terms that fit your circumstances and budget. For example, would you rather pay the loan back quickly with a 12 month financing term, or experience lighter monthly installments for 36 months? Choose the plan that suits your lifestyle the most and work it into your budget.
3) Manage your outstanding debts properly
It’s a good idea to look at your current debts while planning for your investment in your education. If you plan on applying for a personal loan for your education, being able to manage your debts properly can help raise your credit score, which will in turn improve your chances for getting your loan application approved. Try some of the most effective known methods for paying loans, such as the snowball method (which prioritizes paying smaller loans first before building your way up to your bigger debts).
Even if you’re confident that your application will be approved, there are still many questions you must ask yourself before committing to a loan. Is your current debt-to-income ratio low enough that another will still be manageable for your budget? If yes, what financing term is the best option for you, keeping in mind the duration of the monthly payments and how much you’re willing to pay for every month? You should know how this loan will fit into your current payments before you can commit to it.
4) Improve your baseline financial literacy
Financial literacy is just like any other skill; it’s something you need to constantly practice, and importantly, it’s something you need to learn strategically rather than just relying on your instinct. Good financial literacy helps you manage your money better and, generally, make better decisions about your funds.
The good news is that you don’t need to pay for a financial literacy course if you want to learn more and apply these skills to real life. There are plenty of resources available that will teach you everything you need to know. You could learn about the basics from a video, then pursue in-depth topics by reading books written by financial experts. In the world of finances, knowledge is power, and learning how to wield it can help you get a great head start in your next level of educational attainment.
5) Start investing
Investing is one of many ways you can earn additional income to accomplish a major financial goal like funding a degree or certification. Learning how to invest while you’re still young can help you gain money faster and allow you to set more aside for your future, once you’re done earning your credentials. Take advantage of the power of compounding interest, which is the interest you’ve earned with the money you’ve saved and previous interest you’ve earned.
You may think it’s intimidating to learn about investing on top of the subjects you’ll need for your upskilling, but it’s not as challenging to start as it seems. You can start by creating a low-risk profile, with investments that start off small and result in little rewards, which involve fewer risks of potential losses.
Before you actually start doing it, saving up for further education or training may seem impossible for the sheer amount of money and effort it requires. But if you know how to save and how to tap the resources currently available to you, it won’t be long before you start accumulating those much-needed funds—as well as incorporating valuable insights about your life and financial health into your learning journey.