Doing The Right Thing

I am happy with what I am doing. As I often say, sometimes we fail in managing our finance because we fail to monitor our expenses.

The starting point in budgeting our financial resources is to find out how and where your money is going. I am doing an experiment on my finances. To find out if I am within my set budget, I am taking note of all my financial transaction and recording them in a simple Excel file.

I am excited to see how it goes. So far so good, meaning, I am faithful and consistent with my recording.

See you on my next report.

Have a blessed life ahead of you.
Jimmy

Do You Manage YOU?

This is true. I always tell my students in our Work Ethics And Values Seminar at Uno Overseas Placement that they are running a business whether they like it or not. And that business is their LIFE.

Looking at my own life, I think I can honestly say I am having an exciting but hard time to make my "business" a  profitable one.

When I read this article from someone I admire, I was encouraged by Dave Ramsey when he wrote this wonderful and practical article entitled: "You Inc: Manage Your Money Like A CEO". He knows what it is to be in debt and how to get out of it as well.

You will certainly appreciate his ideas and it will help you start a good habit of managing your money well. So, here it is for you.

"If you managed money for ‘You, Incorporated’ the way you manage money for you now, would You hire you?"

Top 3 Free Budgeting Tools For You

You want to be serious about making your financial house in order but don't know where to start. Well, here's a starting point for you. Find out what's happening to your finances, Take an inventory of where every cents go by listing all expenses you do daily for a month. Categorize the expenses by type e.g. Food, Gas, Utilities, etc. Tally.

The result will give you an idea how to set your budget for each category. Budget is very important. It gives you a parameter of how and when you can spend your money. It helps you to be disciplined in the use of your hard-earned money.

5 Tools For Teaching Your Kids How To Save

I love this article by Carol J. Alexander at the Christian Personal Finance. I would like to post it here to guide you, if you're a parent. You will benefit a lot if you try to use it on your kids. I have seen some of her ideas worked on my children. Now they're all professionals and saving is part of their finances. You must teach them while they're young. 

5 Tools For Teaching Your Kids To Save Money

All children are different. My six children may all look the same on the outside, but on the inside they all march to the beat of a different drum. I have naturally hard workers, and I have those we trained to work. I have a son who breathes music, and I have another son that needed his music lessons.

Likewise, I have a few who squirrel away every penny they get and a few whose pennies slip right between their fingers. Yet as a parent, you want to do your best to train your children to have positive character qualities—and saving money is one of them. Here are 5 tools for teaching your kids to save money.

Budgeting For The Starters

I had a wonderful time with my eldest daughter, Rache, just before she left for a vacation in China. One of the things we talked about was how she will have money ready every time an opportunity to travel presents itself to her. She has realized that she must be serious in her finances from that time on. I am an advocate of having a family budget. I have been telling her to have a budget of her own so she can manage her finances well. I think that small talk we had will change the way she values her money. I have a guest post here about starting to make a budget. It's simple you can easily do it. I am proud of Rache. She will be a millionaire someday if not soon. Here's a guest post from Financially Poor:

Budgeting: For The Just Getting Started

So you have come to the realization that you need to control your finances. Well I’m here to help you get started. Starting a budget is somewhat easy but there are a few steps that can trip you up. What I’m going to do is walk you through the mine field so you can have a budget that you can call your own.

Starting out

What your first step needs to be is make a list of categories of bills that you have every month like rent or mortgage, phone bill, etc.  Here’s what mine looks like:

The reason to list those first is so when you decide how much goes into each category you can get the necessary bills out of the way first and know how much you have left over for the rest of the categories.

Next make a list of all of your monthly variable expenses like this:

If you want to make the categories more detailed go for it. You can make eating out into breakfast lunch and dinner if you want. Customize it to whatever works for you. Don’t worry about making it perfect the first time around though. Budgets tend to evolve over time so just make a first one that will get the ball rolling. The Spouse 1 and Spouse 2 is for fun money for each person FYI. Be sure when you put the two groups together that you add a line for savings between them.

Divvying Up Your Money

After you’re done making categories for your spending it’s time to find out your spending. This step is to find out how much money you spend in each category. There’s a few different ways to do this.

One way is to guesstimate how much you spend in each category. Your regularly monthly bills will be pretty accurate but your variable spending will probably be pretty off. With this method you’ll be adjusting your budget a lot and can be frustrating so I wouldn’t recommend it for most people.

The other way is to track your spending for a few months and fill in the categories with those amounts. If you have a debit card I would use that because then you can see your transactions online and it’s so much easier to keep track of. If you don’t have a card and you just use cash then think about getting a small note pad and writing your purchases down. This isn’t the most fun step but it is the most eye opening experience. When you actually see how much you spend a month you may be very surprised.

At the end of each month put all of your purchases in their different categories. This will give you an idea about how much you spend in each category. Now comes the meat and potatoes part. The point of a budget is to control your money instead of letting it control you. So this is where you decide how much you want to cut back on variable spending. I’d recommend you cut back slowly so that it’s not a big shock and turns you off. If you spent $300 on entertainment try to cut back to $250. If you cut back a lot you might get frustrated that you can’t stay within budget and could cause you to give up. so each month just cut back a little more and eventually you’ll figure out where a comfortable level is for that category.

Once you figured out your budget write it down on a piece of paper or put it in a spread sheet. I write down my budget in a notebook so I can carry it around wherever I want to and work on it. I have mine set up like this:

Another reason I write in a notebook is because I fill out, on the page after my budget, columns with the different variable spending categories and amount budgeted. Then through the month I write down the expenses as they occur in the correct category. This helps me save a lot of time.

That’s pretty much it. Not hard at all. Over time your budget will be customized to your situation. What you just created is a gateway to a better financial life.  This is a tool that’s going to help you get control over your finances.

How was your experience setting up your first budget?

I hope you have made one budget for yourself and your family. 

To your debt-free life,

Jimmy

The Battle Against Unbearable Debt

How can one win over unbearable debt? This is a big question I keep asking myself when I hear our overseas workers' financial struggles. Even before leaving for work abroad, they are already in deep debt but there's this nagging hope that their problem will soon be over.


Guess what? After working for 3 years, most come back with nothing and the worst part is they are still in debt.


Benjamin Pimentel's article on How overseas Filipinos can win the battle against unbearable utang (debt) clearly explains the reason why many of our OFWs end up deeper in debt compared to their goal  of eliminating debt, which is the very reason why they leave to work overseas.


I would like to cite a portion of his article that I believe is the key to getting out of this unbearable debt:

"OFWs should and must undergo financial literacy to protect and harness their money which is more often lost and squandered," he said.

Let's affirm a key premise here: Overseas Filipinos perform a vital role by sending money back home to help their families. But there¿s also a growing need for families to find better ways to manage funds coming from abroad.

And we're not talking about totally avoiding debt. In many cases, as I've noted, debt is necessary to meet a need.

But there's such a thing as smart debt and dumb debt. Worse, there is unbearable utang - debt that becomes so overwhelming that overseas Filipinos end up wearing themselves out as they find themselves trapped in a vicious cycle.

Charito Basa, an OFW advocate based in Europe, listed four general principles for overseas Filipinos and their families (which actually applies to everyone in this time of crisis):

Have a budget and stick it to it no matter what

There'll be special requests from family and friends that will tempt migrants to deviate from their budget," she says. Be firm. People will eventually understand that they are doing it for the good of everyone."

Save first, before spending (not the other way around)

Set aside a fixed amount for savings. Charito recommends at least 10 percent of one's income. She and Tony Ranque point to the tested formula for sound personal finance management: Income minus Savings equals Expenses.

Saving a portion of your income is a must, not an option," Tony says. If you cannot develop the habit of savings which is founded on discipline, force yourself to save by getting pension plans and other types of pre-need plans."

Have insurance (health, education, retirement, pensions)

When done through reputable companies, insurance plans can guarantee that needs are attended professionally and that funds are available when most needed," says Charito.

Stay away from "get-rich-quick" schemes

This rule also applies to everyone.

My experience tells me that most of our OFWs are not financially literate. This, I believe, is the main reason why they end up poorer that when they first left for work abroad. They just can't find time to educate themselves in money matters because they are too busy running after the money.

The painful reality is when their contract is finished, in a few months, they're broke again or you see them lining up to apply for work abroad again.

So, how can our OFW win over this unbearable debt? Maybe you have a better suggestion we can all use. 

To our debt-free life,

Jimmy

Photo credit

Use That Card Wisely

I have two kinds of card:  a credit card and a debit card. Both are from the same bank. I use my debit card for the following:
1, Grocery purchases
2. Shopping (on purpose) like when we bought a new gas stove the other day
3. Medicine purchases
4. Books and school supplies

On the other hand, I use my credit card for the following:
1, Representation Expenses (chargeable to my company)
2. Gasoline, when I have no cash on hand and I need to load
3. Planned eat-out with family and also friends (on purpose to get credit but paid immediately)

From my experience, I get into trouble when I use my credit card on unplanned purchases. Come pay time, I miss it since I have no budget for it.

I came across this article that suggests of 3 ways to use a credit card. A great help indeed.

The best option for me is to plan and budget and really stick to it. Doing so helps you get out of DEBT!

To our debt-free life,
Jimmy

7 Worthy Resolutions To Commit To In 2012

Hi there. I have been away for a while. Japan is now in winter season. Visited our Filipino workers around Takamatsu in Kagawa-ken. It has been a fruitful monitoring. Just by seeing them and being where they work, brings joy and refreshing to these precious people.

Together with the industrious lady welders in Takamatsu

At the highest point in Tsuda, Kagawa-ken

With the lady Chicken Choppers

On my way back home last January 17 on PR 407, I was reading an article on the Philippine Star. This particular article caught my attention because it speaks to retirees, of which I am within its zone!

Took this photo at the Kansai Airport on arrival

But I believe the resolutions mentioned by AP can be applied to younger ones too. The author mentioned Seven (7) resolutions for retirees in 2012.

Although I can go on retirement mode, I made a conscious decision not to retire yet because I feel that my best days are still ahead of me. There's no time to stop doing what I am called to do.

Now, let me give you my take on this article.

First of the resolutions mentioned is the call to get disciplined about money matters. The best way to do this is to set up a formal budget and stick to it. Being thrifty without a plan only goes so far when unexpected expenses arise, especially at an age when health care costs can start to mount. How true this is.

Attack your debt. The top priority is to pay off credit card debt. After the card is zeroed out, use only one card and pay off the balance monthly. If an emergency expense leads to a balance, don't let it linger or it will erode retirement savings. Having only one credit card is a very practical suggestion indeed.

The other resolutions include:
1. Invest in dividends-paying stocks
2. Get your estate plan in order
3. Be more generous
4. Check into long-term care insurance possibilities

The last one is especial to me: Stretch your body and mind. The author says we need to choose daily pursuits that keep you physically, mentally and socially engaged. Physical activity helps us to live longer, feel better, depression free and keeps our mental skills sharp. I take physical exercise as a necessity for my body that's why I play badminton and brisk walk at least three times a week.

I can't help but notice the mental sharpness of Justice Cuevas and Senator Enrile in the current impeachment trial of CJ Corona. They are in their 80s yet they are still sharp as ever. This is also the main reason why I blog!

What about you? Do you feel you can use these resolutions for 2012?

To our debt-free life,
Jimmy

How I Saved On This Tour

Our office, Uno Overseas Placement, gave us an advance Christmas treat. We were given a tour of Hongkong, Macau and Shenzen, China.

My wife, Maritess and Del enjoying Hongkong's airport facilities

So off we went on this 3N/4D tour package.

Of course, since this was a pre-Christmas gift, we were also given extra money in advance.

The temptation for me, and am sure for everyone in the team, was the urge to buy gifts and items that are unique for each country we visited. The other side of the coin was the desire to preserve our hard earned money to last till Christmas.

The tour guide giving us instructions and tips

Let me share my two cents worth of idea how I saved during this tour.

1.     Determine and set the budget for the trip – This is the most important decision you need to make. Setting goals and limits causes you to be frugal and careful in spending your money well.

2.    Buy only what you need – There are many good things you will see and the urge to buy them is very high. Knowing what you need will help you know and eventually eliminate the wants. Otherwise, you will bloat your luggage with items you don’t really need and then you will have to deal with overweight baggage. So know what you need and to whom you will give gifts.

3.     Take care that you don’t succumb to any sales pitch by the tour agent– Tours are usually designed to let you enjoy the many amenities and sites of the city you’re in. However, if you’re on package tour, the tour agent usually brings you to places where they can earn commissions when you buy. In Hong Kong, we were brought to the Jackie Chan Jewelry shop. It was very tempting to buy an item for my wife. But because it wasn’t in our goal, I avoided the expense. After all, I still have some watches I have not been using, which are of the same quality they offer.

4. Enjoy your hard earned money, treat yourself well – I tried to go out of my way to treat my wife with new clothing. It was a major part of the plan. So we went to Cotton On in Mongkok to buy her clothes that were on sale but of good quality. Our friend, Bong Cuntapay, who now works there, was at hand to help us choose good designs for her.

So many things to buy in Macau

Overall, we enjoyed this trip. We went home satisfied and grateful to Uno Overseas, for giving us the chance to travel and relax.

I look forward to more tours.

To your debt-free life,

Jimmy

10 Smart Ways to Improve Your Budget

When you're dead serious about managing your money to eliminate debt in your life, you will go out of your way to dig for more insights and precious information that will help you be on top. After all, I don't have all the solutions to my money problems. I need others to support me with my goal of reaching a debt-free life.


I came across this smart article from US News written by Kimberly Palmer, 10 Smart Ways to Improve Your Budget. I am an advocate of using budget as an important tool in managing our financial resources. That's the reason why I highly recommend this very practical and useful article.


Here goes:

10. Share your budgeting goals with others.

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Whether you want to stop wasting money on unnecessary shopping trips or pay off your credit card debt, share those goals with friends and perhaps even strangers. Websites such as 43things.com and MyLifeList.org makes it easy to share goals with similarly-minded people.

9. Reward yourself.

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Diets that force people to expunge almost everything tasty from their meals never seem to have much success. That principle applies to money, too. Denying ourselves every material pleasure turns money into a sad subject, instead of an empowering one. After all, you work hard for your money, so it should bring you some pleasure.

8. Avoid temptation.

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If you were on a diet, would you stare at chocolate chip cookies all day? Of course not. So why do we torture ourselves by allowing catalogues full of shiny, new kitchen gadgets or tempting electronics to come through our mails slot every day? Cancel them.

7. Take the spending diary challenge.

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Write down every single thing you spend money on for two weeks, along with notes on why and how it made you feel. You might be surprised to discover the real leaks in your budget. Instead of lunches out and cab rides, you might be wasting money on coffee and happy hours. After the two weeks is up, review the list and see what jumps out at you.

6. Consider your high and low points.

(Angelo Cavalli/Getty Images)

A quick review of where you went wrong—and right—over the past few months will help pinpoint your weaknesses. Did you end up spending twice as much as usual on plane tickets because you waited too long to buy them? Or did you buy overly expensive gifts? Don’t just beat yourself up; consider the good decisions you made, too, whether it was comparing prices before buying a new television or cooking more homemade meals.

5. Set money aside for leisure.

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Research shows that people get the most pleasure out of spending on leisure activities, such as vacations, movie theater tickets, and hobbies, partly because these things usually involve spending time with other people. Don’t forget to reserve some cash for such happiness-inducing pleasures.

4. Consider the year, not just the month.

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Budgeting for the year is better largely because we feel less confident in our monthly estimates, so add more of a buffer for unexpected expenses, according to research by University of Southern California’s Gulden Ulkumen, Cornell’s Manoj Thomas, and New York University’s Vicki Morwitz.

3. Time yourself.

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Once you decide you need to buy a specific item—a new computer, for example, or a backpack—give yourself a specific time limit to make the purchase, such as a half-hour. “You don’t want to lose precious time sifting through options when your instinctive reaction will probably end up being the best decision,” says AnnaMaria Turano, co-author of Stopwatch Marketing: Take Charge of the Time When Your Customer Decides to Buy.

2. Harness the power of a Web tool.

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On Mint.com,you can upload your account information and get immediate insight into where your money is going. You can then use that information to start saving more money, just in time for back-to-school season. Other online options include Wesabe.com,Pennyminder, and You Need a Budget.

1. Decide on your priorities.

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Most people’s budgets revolve around three costs: food, housing, and transportation. After you budget for those expenses, which probably account for between half to two-thirds of your take-home pay, and factor in any debt payments, decide how to prioritize savings, household expenses, professional expenses, and entertainment.

My wife and I went on tour to HongKong this week. The first thing we did was to decide on our priorities when it came to spending. We had a budget and it helped us control our expenses and came out of this tour fully satisfied and rewarded. In the end, we enjoyed HongKong, Macau and Shenzhen a lot.

Here's to your debt-free life,

Jimmy

How to Manage Household Expenses When You're Married

This is a very good article for married couples. I came across this article on SmartMoney. The only difference is in the way my wife and I manage our finances. We don't separate our money/accounts. We have a merge or common account, which is transparent to both. We plan together and decide together. What about you? I hope you can get some helpful tips from this article.

Sharing a checking account may be one of the hardest things about sharing a marital bed. In fact, three in 10 Americans who've combined finances say they've deceived their spouses or partners when it comes to money matters, according to a 2010 survey by the National Endowment for Financial Education. Whether you're newlyweds or have been married for decades, there's always time to walk down the path to financial harmony. Here's what you'll need to do.

Decide what's common and what's separate. Decide whether to keep separate bank accounts, merge everything or a bit of both.

• Count your debts. Create a checklist of all the debt each spouse is entering the marriage with and determine whether that person will pay down his or her loans or if both spouses will chip in.
• Decide how to pay for household expenses. Some couples create a joint checking account, and each spouse contributes money to pay for household expenses like the mortgage, utilities and groceries.

Get serious about saving. Your expenses will only grow as you get older, which means you need to start saving now.

• Prepare for an emergency. Financial emergencies cause stress; stress causes discord. And while you can't avoid the emergency, you can avoid the stress. Put three to six months of living expenses in a savings account or money market account and keep it strictly off limits until there's a real emergency.
• Check in annually. Arrange an annual meeting with your spouse to review your financial health. List all assets, debts and sources of income and set long-term goals. If you're in your 40s, start talking about retirement goals, too.
• Make a plan. Use this SmartMoney calculator to set your investment goals, and check out this article in case an emergency strikes when you're cash-strapped.

Chip away at debt. Households with less debt have an easier time qualifying for a home mortgage and can also save more for their future.

• Have roles. Decide who will be responsible for keeping track of the bills and paying them. For unsecured debt, like credit cards, try to pay more than the monthly minimum and pay down the highest interest first.
• Save before spending. Create a strategy to save for one-time expenses, like a vacation or a new piece of furniture, without incurring debt.
• Figure out where you stand. Use this SmartMoney calculator to find out if you have too much debt and this calculator, which shows how much interest borrowers will pay by the time their credit card balance is paid off.

What not to do. The biggest mistake is to start arguing over finances, and that usually happens after one of these mistakes:

• Don't keep secrets. Spouses often overspend and hide it from their other half. It's only a downward spiral from there.
• Don't give up financial control. Just because one of you makes sure the bills are paid doesn't mean the other can live in la-la-land and spend without consequence. In this case, ignorance isn't bliss.
• Don't collect bad debt. Carefully consider getting a loan for a depreciating asset, like a car, because at some point you could owe more than it's worth. And stay away from credit card debt; balances can rack up quickly at very high interest rates.

I like the suggestion about chipping away debt. Everything starts with a plan. I am sure you will have one when you're done reading this. It's the only way to take control of your finances.

To your debt-free life,

Jimmy