Wednesday, February 3, 2016

Managing Your Money

Whenever I slacked off in school my Mom would remind me that she won't be around forever. I have reason not to believe that because at 80 my Mom is stronger than me although I've been finally able to beat walking faster than her in the last few months. Her secret to her good health is gardening!

When I was younger I would feel bad whenever my Mom would tell me she won't be around forever. I eventually realized that she was telling me this so I would become independent and make the right decisions. I became a Mom at the tender age of 18 and you can just imagine how I thought my life was a huge disaster. I only thought about that for a second actually because I knew I had to plan because I had a little one I had to care for. My parents put me back on track (back to school). I took it as my salvation, finished two degrees and figured out how to earn for my son.

After graduation I took it upon myself to ensure I covered everything Miguel needed. His milk. His toys. Doctors appointments. Tuition. I still got support in the beginning, but eventually I managed. I remember I was the last person I knew who traveled to Boracay because I just didn't have extra money for traveling. My Kuya also taught me that one should just buy what you need and not what you want.

I read that one has to have savings. For many years I didn't have that. I was at some point in debt because I paid for my MBA tuition using my credit card (thanks Titay for bailing me out). The extra money I had I would buy Miguel nice toys (those expensive models you build) not for him to enjoy, but to learn (came in handy when he was into robotics). It was only in my 30s that I was finally able to start saving.

One important thing I learned is not to upgrade one's lifestyle because you had a salary raise. I remember when I moved to Singapore I managed to live on just SG$50 a week. I was able to do this because I eat mostly in the office and just eat at the Kopitiam. It's been almost 5 years I've lived here and I still buy most of my toiletries from Manila, eat at Kopitiam's only on weekdays and buy only what I could consume. It's hard and there are days I indulge too (but with a limit).

So how much should one save? I don't really know, but what I follow is I remove my savings from my monthly salary and then I set aside money for tax and then I pay my bills. I have a set weekly allowance which I try my best to follow (as I said it's very hard!), but with the money for savings, taxes and bills set aside I'm really forced to just spend within my means.

I only use my credit card when I buy appliances (I prefer to pay monthly at 0% interest) and to book flights. Pay everything monthly so you don't spend on penalties. One thing though that I'd really would like to do this year is invest money in something that can be a source of income when I retire (suggestions are highly welcome). My Kuya said that if I plan to set up my business I should start it while I'm still working. That's something I would really need to think more about since my energy is pretty much depleted with work and running a household. This part needs more thinking time :)

So in summary -
1. Save.
2. Be mindful of your spending.
3. Save first before you spend.
4. Do not use your credit card like it's a license to buy everything you need. Use sparingly and pay everything when the bill comes.
5. Invest (I'm still figuring it out).

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