Whether you’re a Gen Z or a young millennial facing life’s many challenges, don’t let your age stop you from building a strong financial foundation. Your future self will thank you if you start planning your finances today.
InLife’s Financial Independence Talk Series recently focused on the financial goals and needs of Gen Zs (born from 1997 to 2010) and young millennials (born from 1989 to 1996). Enrique F. Fausto, Chief Financial Architect and Director of IFE Management Advisers, Inc., guided participants through the essential steps of budgeting, saving, and investing to take control of their financial futures.
𝗗𝗲𝗳𝗶𝗻𝗲 𝗬𝗼𝘂𝗿 𝗥𝗲𝗹𝗮𝘁𝗶𝗼𝗻𝘀𝗵𝗶𝗽 𝘄𝗶𝘁𝗵 𝗠𝗼𝗻𝗲𝘆
Fausto emphasized that it’s important to assess your relationship with money before setting financial goals. During the Wealth Journey: Your Future, Your Rules webinar, he posed the question: “What’s your current relationship status with money?” Answers ranged from “mutual understanding” to “complicated” or even “toxic.”
He followed up with more critical questions: How do you want that relationship to improve? Where do you want it to be in the next few months, or by next year? Knowing where you want to go is the first step toward improving your financial health.
Fausto also explained that understanding your finances is like getting to know yourself better. He recommended creating a personal financial statement—income minus expenses equals savings—and advised young people to prioritize saving.
“Pay yourself first,” Fausto urged, advising a savings target of 20% of income, aiming to eventually save up to 50% over time as income increases.
𝗚𝗼 𝗼𝗻 𝗮 𝗠𝗼𝗻𝗲𝘆 𝗗𝗮𝘁𝗲
To clarify and quantify your financial goals, Fausto recommended scheduling a “money date” to sit down and plan for your future, whether it’s opening a business, starting a family, or preparing for early retirement.
He also emphasized the importance of building an emergency fund, equivalent to at least six months’ worth of expenses, to safeguard against life’s uncertainties.
𝗙𝗼𝗰𝘂𝘀 𝗼𝗻 𝗬𝗼𝘂𝗿 𝗢𝘄𝗻 𝗧𝗵𝗶𝗻𝗴
When discussing retirement, Fausto introduced the “three-legged stool” of financial security: Social Security System (SSS) or Government Service Insurance System (GSIS) benefits, company retirement plans, and personal savings and investments. He highlighted that relying on social security or company pensions may not be enough, especially as younger generations rarely spend decades in one company.
“Focus on your personal savings and investments,” Fausto advised. Building your retirement fund may seem overwhelming, but increasing your income, managing expenses, and making goal-based investments are key steps. He encouraged participants to align short-term goals, like an emergency or travel fund, with safer investments and reserve higher-risk investments for long-term goals like retirement.
“Think about your own life plan so you can live out the life you want. Be the master, not the servant, of money,” Fausto said.
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