I always hear people complain about inflation, about work, about their relationship, almost about everything. I admit I used to be like that. I blame everything but me on my misfortunes and financial struggles. I tried to find ways to be happy and satisfied by shopping, going out with friends, collecting stuffs, and many other materialistic approach. And I only end up broke. After months or let us say years of trial and error, I finally found and practice the first step to financial freedom. That is MANAGING YOUR FINANCES. Because no matter how much you are paid for or how much money you have, you will still end up broke if you don't know how to manage your finances. And trust me, it is not very easy. It is a struggle and sacrifice you have to make everyday. Here are some of the things I want to share with you on how I start my journey on PERSONAL FINANCE MANAGEMENT:

1. Making a budget

2. Decluttering ( a post about this topic is coming up)

3. Stop collecting stuffs

4. Making a weekly meal planner

5. Monitoring your daily expenses

6. Saving money

7. Cost cutting

8. Using the envelope method

I am not a financial expert but I have my share of personal experiences on these matter and I hope you will learn something from them.

2008 was a good year for me and my family.  Although the bank where my time deposit was placed closed, the rest of the year was a good one.  Here are my financial and non-financial highlights for 2008:

• paid off Metrobank Mastercard with P 105,000.00 balance including interest
• paid off Citibank Cash Back Visa with P 37,000.00 balance including interest (card terminated)
  
• paid off HSBC Mabuhay Miles Visa with P 17,000.00 balance including interest (card terminated)
  
• disposed old car and bought a second hand one from a relative (P 350,000.00 including repairs and freight)
  
• visited Camiguin Island for 2 days and 2 nights (total expenses: P 20,000.00 for 3 adults 2 kids; barge fare, hotel, food, souvenirs, fuel)
  
• visited Cebu City with the whole family ( plane tickets were sponsored and we stayed in a relative's house)
• purchased my first laptop amounting to P30,000.00 at 0% interest for 12 months.  6 monthly payments were already made.
• purchased a new car stereo amounting to P16,000.00 at 0% interest for 12 months.  3 monthly payments were already made.
  
• got a new cellphone (samsung u900) as a loyalty promo from Globe
• saved P 20,000.00 placed in a time deposit ( I know it's not a big amount but this is just the beginning)
• paid off the component we purchased last year amounting to P18,000.00 at 0% interest for 12 months
  
• my 6 year old eldest son finally knows how to read
  

A few months ago, I made a post regarding my objectives for 2008 which is mostly concentrated on debt reduction.  I am happy that by making these objectives, I was able to save enough money to pay off my credit cards (click here to know how I pay off my credit cards).  Moreover, I am already writing down my financial and non-financial plans for 2009 and I will post them here once they are done.  I hope you're making one for yourself also.  It really does help to have your objectives set.  Just be sure you check them from time to time to know if you are on the right track towards those objectives.  Start your journey to financial freedom NOW.  It is never too late.  HAPPY NEW YEAR!

  I invested in this company called LEGACY about 3 years ago.  An acquaintance working in a bank told me about it.  She and her aunt were already investors in the said company so I decided to invest in the company also.  I've been receiving my monthly checks for 3 years now.  But lately, news about rural banks under LEGACY are declaring bank holiday and some have already closed.  I was alarmed.  My money was placed in a 5 year time deposit at 20% per annum at Rural Bank of DARBCI in Polomolok, South Cotabato.  I've been monitoring news and PDIC announcements about the status of some rural banks on bank holiday.  I texted the person who invited me to invest in LEGACY about this alarming news.  She said Rural Bank of DARBCI is not included among the banks that declared bank holiday.  She mentioned that the bank will have a change management next year.  I hope it will be for the better. 

The money I put into this investment were cash gifts during our wedding.  I know it was very unwise to invest into something like this.  But it was pretty tempting.  Imagine, your money will be doubled in 5 years time.  Well, this is a lesson to be learned.  With high returns, the risk is also high.  I just hope Rural Bank of DARBCI will not closed down.  And if ever it will, I am still protected with insurance from PDIC because the money I invested here was below P250,000.00.

Let us say it is your first pregnancy.  You and your partner are finally going to have a baby!  Oh, what a joy.  I don't want to spoil your excitement but here's a list of what to expect when expecting a baby:

MONTHLY PRENATAL CHECK UP:  This is a must.  But first, find an ob-gyne that you feel comfortable with.  Ask your mom or your friend to recommend you to someone.  Most check up would be P200 - P300.  By doing this, you and your ob-gyne are monitoring your child's development.

VITAMINS:  Doctors will usually prescribed supplements and vitamins that will help you get the nutrients that your body needs for you and your baby.

LABORATORY TESTS:  On certain months of your pregnancy, your ob-gyne will require you to take some lab test.  Most of them would be sugar level and cholesterol test.  And depending on your family history, they will require some more.

BIGGER CLOTHES:  You're growing bigger every month so your need to buy bigger clothes where you can fit in.

CRAVINGS.  Some pregnant women will really beg for something they want to eat.  Some wanted fruits, while others wanted expensive and exotic dishes.  Some don't even want to eat at all!  Control those cravings because you will surely have a hard time losing those extra pounds after giving birth.

SSS and PHILHEALTH PAPERS:  Be sure that you complied all the necessary documents needed by these government agencies so that you can avail of your maternity benefits.

ULTRASOUND:  When you just found out you are pregnant, your ob-gyne will require IV untrasound. Second ultrasound will be required to determine the baby's position or gender.  Some will require more depending on your condition.

BABY THINGS.  Of course you need to buy a crib, clothes, feeding bottles, sterilizer, breastpump, cloth or disposable diapers, and other baby essentials.  If you know someone who already had a child, you can ask for some old clothes.  Don't buy many small-sized clothes because the baby will outgrow them immediately.  Buy bigger clothes instead so that they can use it for a longer period of time.

YOUR OB-GYNE'S PERSONAL NUMBER.  Some doctors are kind enough to give their personal numbers just in case you have a question.  It is also necessary to have the number especially if you think you are already on labor.  Be sure you have a cellphone load to be prepared when these emergency arises.

CHOOSE A HOSPITAL.  You should ask your ob-gyne on what hospitals he/she is accredited with.  Then choose from them.  You can visit the hospital to ask for their delivery packages.  Know what services they offer on those particular packages because there is always a catch to those discounted rates.  But you will be subject for interview first and will require to submit some documents before your application is approved.  But if you are in good financial standing, don't bother to ask because your application will be disapproved.

CHOOSE A PEDIATRICIAN.  Before giving birth, you will be asked by your ob-gyne if you already have a pedia.  If you don't, you can ask them to recommend someone.  Once the baby is delivered, the pedia will be the one who will attend to your baby's need and not your ob-gyne.  Nursery bill is separate from your hospital bill.

MONEY.  Whether it is a normal delivery or a CS operation, you need to have money for the down payment to the hospital.  Most normal deliveries cost about P15,000.00 if you are in a private hospital.  CS operation on the other hand, cost about four times the amount of a normal delivery.  The largest component of your bill will be the professional fees.  Mine cost about almost 40% of my total bill.

I don't intend to scare you away or what.  I just want to share the things I learned from my own experiences so you will have an idea on what to do and what to expect.  Remember, the journey does not end when the child is born, it is only the beginning.

People tend to spend more money than they are supposed to during Christmas season.  This is because during this time of the year, people have extra money to use like bonuses, 13th month pay, and cash gifts.  Here are a few tips on how to avoid the holiday overspending:

1.  SAVE.  Don't spend all the extra money that you have.  It is wiser to save some of it for your future goals.

2.  ALLOCATE MONEY FOR GIFTS.  Because it's Christmas, we feel generous to give everyone a gift. But don't just buy right away.  Determine how much money you want to set aside for buying gifts.  You can also start saving on a monthly basis for gift allocations next Christmas.

3.  CREATE A GIFT LIST.  Once you already have the budget, create a list of who you want to give presents to and indicate a price limit on each gift so you will not go overboard your budget.

4.  STICK TO YOUR LIST.  When you already have your list, shop for thse gifts and stick to your list.

5.  PLAN YOUR MEALS.  If you are married, you can save on Media Noche and Noche Buena by planning on where you are spending your Christmas and New Year.  If it is with relatives, you don't have to cook everything for everyone.  Ask the host on what food they want you to bring for the celebration.  Or you can ask your in laws and siblings to come over and bring some food to celebrate together.

6.  SLOW DOWN ON FIRECRACKERS.  There are cities that do not allow firecrackers.  If you are living in one, lucky for you because you will not spend money on it.  But if you are living where firecrackers are allowed, don't  buy everything just because you want to impress your neighbor what awesome fireworks you have.  Be responsible also when using firecrackers because they can cause house fires.

7.  BUY QUALITY DECORATIONS.  If you plan to buy a Christmas tree, choose the tree that is easier to install and uninstall.  Buy some ornaments also that you can still use in the next Christmas to come.  Keep them in boxes after Christmas to preserve the quality and form.

MERRY CHRISTMAS EVERYONE!!!

Here are a few simple tips on how to make a budget:

1.  DETERMINE YOUR INCOME.  The first part of making a budget is to determine your income or how much money you receive each month.  This includes compensation, professional fees, rental income, royalty fess and dividends that you do not invest.  You can use computer softwares to organize these details or the paper and pencil method will also do.

2.  TRACKING YOUR MONTHLY EXPENSES.  I have a post regarding monitoring your daily expenses.  By doing this, you will know if you are spending below or above your means.  List everything down no matter how small you may think it is.  You can also break them down into categories.

3.  ANALYZE.  Once you know where your money goes, it is time to analyze your data.  Are there areas in your monthly expenses that can be reduced?  Like taking a public transportation instead of taking a cab?  Using prepaid cards instead of postpaid plans?  How about canceling your magazine subscription?  Or packing lunch instead of eating out?  Terminating some of your credit cards to avoid annual fee payments?  There are a lot of things that can be reduced.  Ask a family member or a friend to help you identify areas wherein you can cut cost.  Be open to suggestion.  

4.  SAVE MORE.  The usual goal of making a budget is to SAVE MONEY.  So when you finally reduced some of your expenses, be sure to save those extra money.  Set a goal on how much money you want to save like setting up an emergency fund of P50,000.00 or a medical fund of P30,000.00.

5.  REVIEW.  Review your budget every month.  When your financial situation change, so are your goals and needs.  So your budget will also change every month.

6.  START NOW.  What are you waiting for?  Start doing your budget right now.  Get a pen, paper and a calculator.

  To monitor how much money you are spending, you should write down every penny that is coming out of your wallet everyday for a month.  Here are a few tips on how to go about it:

1.  BRING A SMALL NOTEBOOK.  Write down everything you paid for on it everyday.  It is called your EXPENSES NOTEBOOK.

2.  USE YOUR CELLPHONE.  If you find carrying a notebook is uncool, you can use your cellphone to record your daily expenses.  Then when you get home, copy the entries to your expenses notebook.

3.  KEEP RECEIPTS.  Keep every receipts you have until you have already written them down on your expenses notebook.

4.  CATEGORIZE THEM.  You can put categories on every item you spend on like FOOD, TRANSPORTATION, ENTERTAINMENT, COMMUNICATION, CREDIT CARDS, EDUCATION, and many others to make the monthly summary easier.

5.  CHECK YOUR NOTES FROM TIME TO TIME.  You are making this expenses notebook for yourself and not for anyone else.  So check them from time to time and see if there are things you bought that were really unnecessary and other expenses you know you can cut off.

6.  MAKE A SUMMARY.  By the end of the month, summarize all your entries based on the categories you have created.  Determine which has the highest amount and try to find ways on how you can lower them.

I've been doing this for 4 months now and it help me stick to my budget.  The idea here is to have few entries with small amounts everyday because it means you are not spending much.  Make this a habit.

One of my favorite personal finance blog, The Simple Dollar, made a post about the best way he saves money.  For him, it is using the public library.  Many readers also responded about their ways of saving money like stop reading women's magazines, using online bills payment, eating out less, staying at home, planning your meals, making a budget, and many more.  Although I already posted some money saving tips here like making a meal planner,using the envelope method, and  stop collecting magazines, for me, my best action to save money is SWITCHING FROM POST PAID CELLPHONE PLAN to PREPAID CARDS.  

When I was using post paid cellphone, my monthly plan was P800.00 (US$ 16) but because of many charges the telecommunication company adds, it will reach P1,000.00 (US$20) a month even if I only use the allocated free minutes and free texts.  When I switched to prepaid cards, I made it a point to load P300.00 (US$ 6) card which is already valid for 2 months.  Sometimes, I will use the credits within a month but it is still a big saving compared to the P1,000.00 (US$20) I used to pay for the post paid plan every month.  And sometimes, the P300 (US$ 6) credit will not be entirely used up for 2 months and the remaining load would just be eaten up.  When the load expiry is near, I will then make "pasaload" to my siblings and friends so that they can use it.  I seldom text and make calls nowadays because I mostly use the internet when keeping in touch with family and friends.

How about you?  What is your best way to save money?  Share it with us.

When year 2008 started, I made a list of what I should do.  Most of my entries were about paying off my credit card debt.  And here are the things I did to generate enough money to pay for those credit card balances.

1.  SELL MY JEWELRY.  I love collecting jewelry.  Most of them I acquired by law-away.  I seldom wear those jewelry and they are usually locked up in the cabinet.  Since they are not giving me any benefit, I decided to sell them.

2.  TERMINATE TIME DEPOSIT.  I have 2 time deposits under my kid's name.  They are earning me about P50.00 (US$1) a month on interest.  My credit card charges me P3,000.00 (US$ 60) a month on interest.  So what do you think I should do?  I terminated the time deposits and pay off the card.  Now I am starting to build up the amount of the time deposits I used and I don't have to worry about interest charges anymore.

How about you?  Can you share your story about how you paid off your debt?

Here are some things you might want to discuss with your partner before getting married or when you are newly wed. 

1.  FINANCIAL SITUATION.  Ask your partner how much credit card balance he/she carries, salary loans, car loans and any loans both of you have.  I know it is awkward but now is the best time to do this to avoid any financial disputes and problems in the near future.

2.  FINANCIAL GOALS.  Upon learning each others financial situation, write down your action plan on how to eliminate and reduce those debts.  Determine what debt you want to prioritize.  You can also discuss about setting up an emergency fund and your financial plans like retirement fund, educational fund, and investment.

3.  LIMIT ON PURCHASES.  You don't really need your partner's permission on every penny you spend.  But you can create a limit that for any items to be purchased, for example above P2,000.00 (US$ 50.00), the partner should be consulted.

4.  FAMILY PLANNING.  This is really important.  You can be a baby factory if you have the financial capacity to raise those kids.  But if you know you can only afford to have 2, then just settle for 2.  Parents want to give the best of everything to their kids, but how can you do this if you can't even feed them 3 times a day? 

5.  JOINT OR SEPARATE ACCOUNT.  You just have to discuss this with your partner whatever is convenient to both of you.  Some partners like to have joint account especially when the other partner doesn't know how to handle money.  Some also prefer to maintain a separate account but made an arrangement on how to pay for family expenses like food, amortization, car payments and many more.

These are only some of the things I think most couple should need to discuss.  Most failed relationships' reason were because of financial disputes and I think it can be avoided by addressing these issues from the beginning of the marriage.

I used to have this expensive hobby of collecting a minimum of 4 magazines a month.  What can I do?  I love to read.  But when these glossy papers started filing up, accumulating dust, and eating up space, I realized I was just wasting my money.  And here are some of the ways I came up with just to dispose them or earn from them.

1.  HAVE THEM RENTED.  I posted a MAGAZINES FOR RENT signs on our house so that our neighbors will know about it.  But it was not successful because our neighbors are not into reading this kind of stuff.  They like Komiks more.

2.  SELL THEM.  When my mom opened a small school supplies store, I displayed all my magazines there and priced them 60 to 70% off of the cover price since most of them are already back issues.  But only a few got sold and the rest of them ended back at home when the store folded up.

I rarely buy magazines nowadays.  Most of the time, I just surf the internet to read about the things that interests me and I was able to save the money that were once alloted for magazine purchases.

I have 3 kids and I have a nanny for my 1 year old daughter Ysa.  I used to have another nanny for our 2 year old son Ythan but she left last month and we decided not to get another one.  Since I am really not that busy, I am the one taking care of our son.  I just realized that there are hidden costs of getting a nanny aside from the salary you are paying for the service.

1.  FOOD
When you have a nanny, your food budget will be affected because she is living with you and you should nourish her.

2.  ELECTRICITY
The nanny has her own room.  She uses the light, the electric fan, and the television.  Some will even buy cassette for their room to listen to at night.

3.  WATER
She takes a bath and washes her clothes. 

4.  SOCIAL SECURITY and PHILHEALTH
You are required by law to provide SSS and PHILHEALTH coverage for the nanny. (correct me if I'm wrong)

So, aside from the P2,000 that I am paying for the salary, it would cost me an additional of about P2,000 for the hidden expenses I describe above.  That would be P4,000 additional expense a month or P 48,000 a year if I get another nanny.  That is already a big amount that I can add to our savings. 

How about you?  Do you know some hidden cost of getting a nanny that I was not able to discuss?

  The envelope method is one way of budgeting your money.  Here how it is done:

Write down categories or labels of your monthly expenses on the back of the envelope and the corresponding amount:

FOOD (the money on this envelope will be used for the grocery and other food related expenses)

UTILITIES (electricity, telephone, water, cable, internet payments)

CREDIT CARD PAYMENTS

AMORTIZATION (house and car, if you have any)

TUITION AND ALLOWANCE

ENTERTAINMENT (watching movies, bar hopping, shopping)

GAS AND TRANSPORTATION ( fuel and transportation expenses)

and some other expenses that you have.  But try to limit your envelopes to 7 or maximum of 10.  You don't want to be carrying a lot of envelopes.  When you receive your salary, try to set aside first the amount for your SAVINGS.  Then allocate the remaining money on the envelopes that you have.  Just be sure that you stick to your budget.  If you find out that there is not enough money left for ENTERTAINMENT purposes, don't get money from the GAS and TRANSPORTATION envelope.  I know this is difficult but if you are serious in achieving financial freedom, sticking to your budget is the first step towards it.

When I was a kid, I am very fond of keeping piggy banks.  I would fill it up with any coin that is left with my allowance.  Until now, I am still keeping a piggy bank.  But I only use P5.00 and P10.00 coin because they are easier to count.  About two months ago, I really wanted to buy the globe visibility prepaid kit that costs P4,500 (USD 90.00).  I don't have that much money at that time.  So I opened my piggy bank and surprisingly, the coins totaled to P5,500.  That was about 8 months of dropping every P5 and P10 coins that I have.  So I was able to buy the globe visibility kit using my piggy bank money.  And I am starting to fill it with coins again.  Maybe next year it will be used in buying another item.  This is the best example of the Filipino saying, "Kapag may isinuksok, may madudukot".  Translation:  If there's a will, there's a way.  Just kidding.  I think what that Filipino phrase mean is "save for the rainy days" or something like that.  What do you think?

Food is one of our major expense. And I noticed that if I don't plan out our meals, I tend to cook a lot of food that only ends up in the garbage can. So I created this weekly meal planner and it serves as my guide on making my grocery list. By doing this, I can avoid purchasing unnecessary items and concentrate on what is only needed for that particular week. As you can see, I also allocated one dinner for eating out because we usually go out during Sundays. And when you are preparing your own meal planner, do it with your family so that they can suggest what they want to eat on that particular time of the day.