3 Reasons Why My Finances Changed in Two Years

Posted by Fitz Villafuerte under Guest Posts, Personal Finance on June 19, 2015

How long does it take to change, and turn around your finances?

For Abe, it takes just two years, and today he’ll share with you the three reasons why he was able to achieve it.

Let’s read his story below.

Two years ago, a friend in church approached me and asked me about saving for my retirement. Yes retirement and it sounds awkward and weird to me back then.

Imagine asking a young engineer, who’s just been working for less than three months, about retirement. I mean, I’ve just started working and I am still enjoying the fruits of my labor. Can i enjoy it first while I’m still starting?

If you share the same reaction as mine. Then let me share to you how this question changed my financial state.

Working inside the plant

Working inside the plant

Being curious
That question made me curious, I was seeking answers, and assessing myself how I will really prepare for my retirement. The only thing I know that time was to save money, so and I started there.

Upon searching Google, I stumbled upon the 10-20-70 principle, which says that 10% of my income should go to charity (tithes), 20% of my income should go to savings, and budget the remaining 70% for my expenses.

Applying it
When I learned the 10-20-70 principle, I tried to discipline myself to stick to this idea, and apply it – to prioritize savings and budget what’s left for expenses.

Unfortunately this budget didn’t work out for me because 70% of the budget wasn’t enough for our expenses at home (I’m supporting my Mom and Lola). So that time, I could only set aside 10% for my savings, and allot 80% for our expenses.

Having this in mind I am very thankful to that friend in church for asking me about my retirement because that question led me from inconsistency to consistency in managing my finances.

Though I was saving small that time it was a beginning of something better.

First time working abroad

First time working abroad

Making the habit
After several months of saving, I became a regular employee in the company, and I received an increase in my salary plus daily living allowances.

I was really happy because this time i can now follow the 10-20-70 rule.

I didn’t change my lifestyle so my expenses were still the same. But because of that raise, I have increased my tithes and my savings as well.

Every paycheck, I disciplined myself to automatically save money and make it a habit. Since the company started to give me daily allowances, that’s the time I also started raising my emergency fund (I learned about this from a Pastor).

I changed my budget to 10% tithes, 10% savings, 20% emergency fund, and 60% expenses.

Focusing on short-term goals
After a year, I got promoted and had a significant increase. Again, I was really happy because I have increased my tithe and savings for the 2nd time.

Having a bigger income doesn’t mean I need to have a lifestyle change, so I continued to live a simple and frugal life.

That time I was focused in completing my emergency fund, it has accumulated to 2 months of our expenses already and my target was only 3 months of expenses. I believe that I was right on track.

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First time working abroad
Last year, I was assigned abroad for 3 months, and that’s my first time to handle big amounts of money. At first I was overwhelmed but I know I was prepared for it.

I have completed my 3 months worth of emergency fund so I added another 3 months to it to have 6 months. I have used the remaining money to renovate a part of our old house.

Having these short-term goals helped me a lot in managing my finances, and it was worth my spending.

Today
I am in the Philippines and back to my regular income. I’m still living the same simple and frugal life, and I am content and happy about it.

I know I can spend on luxuries but I don’t prefer to do it yet. There are still goals that I need to accomplish and that is my priority.

Contentment is a choice and everyone has it, some people just lack the courage to choose it.

My financial state right now is better than before, I have 6 months worth of expenses as emergency fund, I have no debts, and most of my money is invested.

My budget for every paycheck now is 10% tithes, 50% savings, and 40% expenses.

In a span of 2 years, my financial status has changed for the better and it was because of having the right foundations and discipline in applying it.

Me, helping with the renovation

Me, helping with the renovation

The 3 Main Reasons Why My Finances Changed

Hunger for Knowledge
When my friend asked me about my retirement, I had no idea how to answer before, which led me to curiosity and eventually made me hungry for knowledge.

I attended seminars, read books and tried to apply it one step at a time.

In the same way, I believe that every one of us can change our financial state if we are hungry enough to be financially literate. Truly investing in knowledge has the best gains.

Disciplined as Rock
Knowing personal finance is one thing but applying it is another. It takes a lot of discipline and a change in mindset before you will get used to it.

It may be hard at first but we don’t have to make giant leaps. Baby steps will make the habit in us and these little acts of change will eventually lead us to financial freedom.

God is our provider, always be faithful on what you have
I believe that God is the one who gives us the ability to produce wealth. And by that I know that I have security in him.

We might have a small income today but if you are faithful with it, I know that it will eventually grow. As we become more knowledgeable of Him and in our personal finance, the more it opens opportunities for us to grow as good stewards.

Just continue to invest in knowledge and be disciplined enough to follow it.

With an ounce of faith, room for knowledge, and discipline in applying it, I believe that we can prepare ourselves to retire comfortable after 20 or 30 years and become a channel of blessing to people.

About Abe:
I am an engineer by profession, a reader, a writer by passion, a follower of Christ, and a son to my parents. I write about personal finance in my blog, The Frugal Worker, in this simple way I know that I can be a blessing by sharing the lessons and personal experiences I’ve learned and will be learning to help in educating young professionals like me in their financial lives.

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9 Responses to “3 Reasons Why My Finances Changed in Two Years”


  1. Mai says:

    Keeping your lifestyle frugal despite salary increases–I think this is the most important thing that people can learn from your post. It really takes a huge amount of discipline to resist the temptation to spend more since you’re also earning more. Salute to you, Sir Abe. 🙂

  2. Ernie Barde says:

    Very insightful & helpful blog , i wish I read this blog 30 years ago . .now I’m nearly approaching my retirement age but just starting, hope still not late to learned personal finance with the help of your blogs “ready to be rich” I want to become rich and become a blessing to people w/ the aid of our Lord Jesus. Thank you!

  3. abrahamrlee says:

    Thanks for that Mai, I guess it’s really about a heart of contentment. God has been faithful in my life and He is for everyone. With that in mind. we can live a richer life in full through Christ and be a blessing. 🙂

    It was really a privilege for me to share myself here in sir Fitz’ blog, thank you po and more power!

  4. Mafe says:

    Very inspiring blog post!:-) Being frugal takes a lot of discipline and hard work but if you do it right especially when your “young” you will eventually see the results of your labor, and will gonna see the “difference” among others. And this is more achievable if you have Jesus being your partner in your journey. I am applying the “10-20-70” principle as well and it’s working for me.:-)

  5. Juan Alvin Gabagat says:

    Wow! that’s really an awesome!- maybe because you have a high salary as engineer-then promoted later on. You can achieve your financial goal in a short period of time(to be exact 2 years).

    I’m speaking to the people that their income is just average(like regular BPO agent, like me”,), minimum wage earner and bread winner in the family. Its really hard to divide your income once your salary is in your hand. But i make it to the point that i need to stick with my plan. Just save something maybe 10% or half of it, then next pay day you adjust it. Saving and investing is really comes to your heart and dedication.

    I will read your blog sir.abe more often and get some tips from you”,)
    like sir. fitz hihi! I would like also to become successful like these guys someday”,)

    #thewiserbachelor

  6. Francis says:

    very inspiring!!

  7. […] If this cycle is familiar to you then this is a clear example on poor budgeting or should we say no budgeting at all. This was a problem for me before when I just started working. I was enjoying my income too much that I forgot to save money for that cutoff and promised to save double the next time(still didn’t happen). I still saved money but without a goal in mind and not on a regular basis. That was my lifestyle until someone from church asked me about my retirement, and it became a turning point for me. You can read why my finances changed in two years in Fitz Villafuerte’s blog, Ready to be Rich. […]

  8. […] You can read why my finances change in 2 years in Fitz Villafuerte’s blog, Ready to be Rich here […]

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