Thursday, November 12, 2009

Are You Money Wise???

photo from Foto S.A.

I don't think I am, but I'd like to be. You guys probably have an idea of how much I take home from my pay being a technical support rep at a call center. And with a communications coach husband working for the same company, you may be thinking we're a large money making couple. But where does all our money go to? Here's a sample of a monthly budget:

Rent 7000
Electricity 3000
Phone and Internet 2000
Helper 3000
Market Expenses 3000
Grocery Expenses 3500
Milk and Diaper 5600
Water 300
Work Allowance 6000
Everyday Vegetables 500
TOTAL 33900

Extra money goes to Drew's speaker business and family bonding. And because Drew's speakers sell out one by one, then we usually get to spend it's earnings on extravagant unaccounted things! No wonder we find ourselves losing money as the next payday approaches!

As a young couple with a beautiful and bouncy baby girl, we really find it hard to save. We find ourselves spending like there's no tomorrow! Having a *relatively high salary at our age is just too overwhelming ! (*Relative to how much generations before us could be earning when they were the same age). But we do have plans for the future and if we keep spending the way we do, we might never come close to our dream life. So how do I go about it? Here's what I have done so far:

1. I joined Home Credit. Home Credit is a subsidiary of the Insular Life which aims to provide a savings plan for the working class with a future goal of getting their own homes. A certain amount will be deducted from your salary every payday and goes to your Home Credit fund. It functions the same as PAG-IBIG, but you have the option to withdraw your money with an 8% interest at the end of your term.

2. I increased my PAG-IBIG contribution to the highest possible member contribution. I just recently found out that PAG-IBIG can finance a house up to 3M provided you are paying an increased amount of contribution. Imagine living in your own dream home after 24 monthly contributions! Check this file for more information.

3. I applied for a passbook savings account without an ATM card. One will always have the urge to spend, especially if money is on ATM or a piggy bank at home. Saved money documented on a passbook can only be withdrawn in the bank branch you applied the account from. It would also help if the branch you applied from is not easily accessible from your home. Moreover, because passbook withdrawal would, more often than not, require your personal appearance, you would shy away from frequent withdrawing because the tellers would most likely remember you. (Works for me!) You can also enroll such bank account on an auto-debit function from your payroll account to ensure regular savings!

4. I applied for all the loans I'm eligible for. I am guilty of promising myself to save a certain amount every payday and break that promise.
If you're looking into saving a target amount until a specific time frame, why not loan that amount and pay by salary deduction?! If the purpose of the loan is for a material thing, then you get the thing right away. If it's for saving purposes only, then your money is already earning interest in the bank. Even though such loans have interest, with the kind of spending we do monthly, would I be able to save such amount when my projected time comes? I don't think so. I just applied for loans with little interests though, such as SSS and my company's employee loans program.

Think: If a large amount of my pay goes to salary deduction, then there would be just enough to spend for important things and only little will be left for unimportant things.

I know, I may not be successful enough to provide proof that what I've done so far works. But at least you have an idea of the principles I thought of on each bullet and study if it would suit the kind of financial manager you are. Happy saving!

How about you? Especially those who can consider themselves financially stable...How did you become money wise?

Love lots,


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