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Tips to control overspending

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Many of us are guilty of overspending. Some have already spent their salaries in advance (even though it’s still weeks before they receive their salaries) with the use of their credit cards. Personally, I tend to overspend on groceries and I don’t feel too bad about it because I’m buying food anyway. However, overspending is still bad. So, how do you control overspending?

1. Create a budget. I know its easy to say this but difficult to practice it. Make sure that your budget is feasible. Some people do the 70-30 (70% general expenses, 30% savings), 70-20-10 (70% general expenses, 20% savings, 10% tithes), etc. Make a budget that you think will work for you. Set an amount for specific expenses such as grocery shopping, date night expenses, clothes shopping, etc.

2. Make a list. Before going to the grocery store, write a list of the things you need to buy. Stick to the list. Be strong! Also, avoid going to the store hungry, you’ll end up buying stuff that looks good even though its not in your list. I usually go the store after work, so, I’m often tired and hungry. I end up buying stuff I don’t usually buy because it looks delicious. Haha. There are so many tips on how to reduce your grocery expenses on Pinterest. You may want to check those out too. They are very helpful, specially if you want to eat healthy food minus the huge expense. Fruits and vegetables can be expensive, specially the organic ones.

3. Practice delayed gratification. This applies really well on material stuff like computers, cellphones and other gadgets. If you don’t have the cash now, try to save up first. Don’t charge it on your credit card. Trust me, even before you pay off the amount (plus the interest) you will charge in your card, the price of that gadget already depreciated. Also, there are some store who give discounts if you pay in cash. Most people like to have the newest gadgets once they come out. Apple, Samsung and other companies have elaborate unveiling of their new products to entice people to pay an exorbitant amount for their latest stuff. Believe me, waiting for a few months for the hype to go down will save you some money. 

4. Live simply. This pretty much answers the whole overspending problem. You don’t have to keep up with the Joneses. Know what you can or cannot afford. Know your wants and needs. Don’t spend to look rich, save your money to be actually rich.

I hope this helps. If you have more tips to avoid overspending, just leave a message at the comment box! Thanks! =)

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Should an OFW have an Emergency Fund?

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What is an emergency fund? Ideally, an emergency fund is a 3-6 months salary amount set aside for emergency cases. You can put it in your savings account that you can easily dip on if an emergency occurs. What kind of emergency? Sudden loss of income, health emergency in the family, unexpected car repairs, etc. The emergency fund should be able to cover your expenses for atleast half a year in case of unexpected job loss. I am guilty of dipping on my emergency fund when my vacation money runs off. Although I only took a few amount, it’s an absolute no-no. You should reserve the money for emergencies only. My goal for the next few months is to replenish my emergency fund while adding some cash on my investment account.

I think every OFW should have an emergency fund. Recently, there are many OFWs who went back home because their company couldn’t pay their salaries. Many businesses are badly affected by the low oil pice in the world market. Some of the people who went home doesn’t have enough savings to cover their expenses while looking for a job. They are relying to the government’s assistance, which I think is a terrible idea. I know the government are saying that they are ready to help the OFWs in case more people will be sent home, but, I don’t think they could deliver. Most of the OFW and their families are used to a certain kind of lifestyle that involves lots of money. I don’t think they will be content with the jobs and the salary the government could offer. My point is, if you are an OFW, be prepared. You won’t be an OFW forever, save NOW for the hard times that could come you way later. Start an emergency fund ASAP.

How to build an emergency fund? Here’s what I do:

Salary
-emergency fund
-investment (stocks)
-personal budget
– money remittance

Notice that I deducted emergency fund and investment amount first before other expenses. This is what most financial gurus would tell you. Pay yourself first. If you can find any other sources of income other than your salary, that would be a good addition to your emergency fund. I did a post about selling your old gadgets online, you might want to consider trying that too.

Once you have a comfortable amount on your emergency fund, you should consider starting an investment account. It could be via Mutual Funds, Stock Market, etc. Just make sure that you do a thorough research about investing . Study first before delving into the world of investing so that you wont be sorry later. =)

DAY 24: Investment books and more research…

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“If you want to grow your wealth, grow your wisdom.”

– Bo Sanchez

ABUNDANCE FORMULA cover

I stayed home all day and read the books my best friend gave me about saving and investing.  I am now a proud owner of Eduardo Roberto’s “Ang Pera na Hindi Bitin” and Bo Sanchez’  “The Abundance Formula.” The books are short and helpful but as soon as I finished reading them, I felt like it wasn’t enough so I went online and looked for other helpful tips about investing. I came across Pesos and Sense videos and I learned a lot from the first few episodes. Another book that I read and enjoyed was Robert Kiyosaki’s “Rich Dad, Poor Dad.” 

APNHB

“You’re only poor if you give up. The most important thing is that you did something. Most people only talk and dream of getting rich. You’ve done something.”
Robert T. Kiyosaki, Rich Dad, Poor Dad
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The first two books are perfect for Filipino readers because the authors  used examples that applies to the Filipino culture and values. It’s the same with the Pesos and Sense blog and videos by Sir Aya Laraya, they are very easy to understand and are very helpful specially to those who would like to invest in the Philippines. Rich Dad, Poor Dad is more on investing in the western settings, but it still provides good insights regarding investing in general.
If you are trying to learn about investing, those books I’ve mentioned are a good start. It will give you a general idea about how you can save money and at the same time make your money work for you. As a newbie about investing in the stock market, I think it’s important to learn more about it before putting your money in it. I was told that the lack of knowledge is one of the reasons why people lose money in the stock market.
Check out the Pesos and Sense youtube channel here.
Novel

DAY 23: Lost in Ortigas

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With only a few hours of sleep, I went to Ortigas the following day to open an account with an online broker. They are called COL Financial and you can open an account with them for as low as 5,000 pesos. I have been reading and researching about the stock market for years but never had the time to actually dive into trading. Like many others, I was afraid of the stock market because of some stories I heard about people losing money in the stock market. However, after talking to my friends during our Tagaytay trip, I found out that my best friend Ruby is actually investing her money in the stock market. Ruby and Kristine are very knowledgeable about the stock market because Ruby is an accountant and once worked in a bank, and there’s Kristine- a cum laude graduate of Polytechnic University of the Philippines with a degree in Economics. So, Estella and I were very eager to learn more about investing in the stock market and decided to open an account with COL financial. But when I decided to go to COL’s office, Estella couldn’t make it because of her job. So, i went alone and got lost, LOL.

Source : kmcmaggroup.com

Source : kmcmaggroup.com

My friends gave me a brief instruction how to go there and it sounded so simple. Plus the fact that I’ve been to the PSE tower once with my sister made me so sure that I can easily find it again. Unfortunately, the lack of sleep and being out of the country for almost 3 years got me confused and I eventually got lost. I couldn’t find a jeep that should bring me to PSE. Since I thought I was still too early (because Ruby told me that the office opens at 9AM), I decided to walk and try to find the building. I got there eventually, after 30 minutes or so of walking, LOL. I probably looked like a sweaty zombie when the lady at the COL Financial office assisted me but she took my forms with a smile and finished my application in less than 20 minutes.

Before we left Ruby’s house she gave me two books about financial literacy both written by Filipino authors and I absolutely loved them! I finished reading the books in one day. I’ll try to share more about these books later. =)

My application was approved in less than a day but it  took at least three days to access my online account. I wasn’t in a hurry to start buying stocks because I was still on vacation. We were in Hongkong when I received my user ID and password for my online account. Anyhow, I was very happy that I finally have an account. This way, my money can start working for me (once I start investing and trading) and beat inflation.

If you are interested in opening an account with COL Financial, you can check out the requirements here. COL also offers free seminars in their office. I wasn’t able to attend one since I was very busy while i was in the Philippines but I heard that they provide information regarding investing, trading strategies, and financial literacy in general.

Laters!

Novel

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