budget

Sep

2022

4 Ways to Deal with Rising Inflation

Reading Time: 3 minutes

If you feel that the prices of goods you are able to buy is increasing; you are not alone. This is the effect of inflation. While most of us don’t really understand how it works; we feel it whenever we notice that our monthly income doesn’t seem to cover all the expenses we had as it did before. That is why you have to care about inflation so you can do something to reduce its effect on your finances. Prices are always rising but your income is not following that trend. So how do we deal with inflation? Here are 4 ways you can deal with rising inflation and maybe even beat it.

1. Reduce Your Expenses

Of course, the first thing you can do to beat or keep up with the rising cost of goods and services is to try to find ways to reduce your expenses. Inflation is a silent budget killer. It is a money leak that you have no control over. Thus, it is important to take the time to go over your budget and review your expenses as well as your financial strategy. See which of your regular expenses you can reduce spending on, replace with a less pricey option, or eliminate entirely. This way, you can still afford to pay for your regular expenses without having to dip into your emergency fund or savings account.

2. Increase Your Income

Increasing your source of income is always a good idea with or without inflation. Of course, the fastest way is to get a promotion in your current job. You can also create a business out of your hobbies or accept projects related to your job or expertise as a side hustle. Collaborating with other people on projects can also help. If you have non-performing assets just lying around; these are also good sources of minimal income. Try to declutter your space or declutter your entire home. See which items you have in your closet and cabinets that you’re not using and you can sell for some extra cash.

3. Keep on Saving

A good savings fund will not only give you peace of mind that you can survive inflation; it will also be a good buffer if you do need to spend more on important things. You might have to pause on some of your big-money savings goals until your income is more stable again to support your lifestyle. But you should not stop saving for your future while you’re struggling with inflation. You might need to pause for a while to review and renew your financial strategies and to adjust your budget. But don’t quit on saving.

4. Diversify Investments

Just as you continue saving; you should not stop investing as well. Learn more about other investment instruments that can help you diversify your portfolio to help you beat inflation. That means opening up new investments in stocks or industries that might be less risky to ensure long-term investment growth. This also means being open to investing in instruments that are more risky for short-term gains that you can use to fund your long-term investments. Depending on your money personality; choose what investments you are more comfortable with. Learn as much as you can about them so you can reduce your losses and maximize your earnings.

Inflation is always going to be around so the best way to prepare for it is to keep increasing your income and learning and adjusting your financial strategies. This way you can maintain the lifestyle that you want to enjoy and be able to keep up with rising prices without too much of a dent to your budget.

Feature Image: Original Photo by Jp Valery on Unsplash.

Sep

2022

Emergency Fund: Why It Matters

Reading Time: 3 minutes

You are the head of the family. The company that you are working for is downsizing because of the recession. Your name is included in the list. You have no savings in place. What will you do? This is the use of the emergency fund, why it matters.

What is an Emergency Fund?

As the name itself connotes, an emergency fund is a sum of money kept aside in cases of emergencies. emergencies include a loss of job, illness, car breaking down, a major purchase. It can be anything that will cover life’s uncertainties. It is there as a kind of financial protection for the unexpected.

Why Does An Emergency Fund Matters?

An emergency fund serves as a financial buffer to keep you afloat in times of emergencies. This will prevent you from borrowing money from others. There is also no need for you to use your high-interest rates credit cards. And thus, it will prevent you from going into credit card debt.

Just take a look at what happened during the COVID-19 pandemic. Because of the lockdowns, many companies suffered and a lot of people lost their jobs. Those with emergency funds were able to go through the hard times. Unfortunately, those without emergency fund struggled with their basic needs. Thus, one lessons that we learned on the pandemic is the importance of an emergency fund.

How Much Should You Save In An Emergency Fund?

There is no fixed amount on how much money you should have in your emergency fund. It all depends on the individual. Each person has his/her own needs based on their lifestyle. But as a general rule of thumb, an emergency fund should have at least six months of your monthly expenses. The logic behind it is for example, you lost your job, you have a buffer of six months to find another job. Your monthly expenses will not be a problem, at least for the next six months.

What Counts As An Emergency?

There are many scenarios that can be counted as an emergency. At the same time, there are those things that are not counted as emergencies.

Sample emergencies include:

Loss of employment
Medical emergencies
Car Repair
Major appliance breaking down

On the other hand, the following expenses are not considered emergencies:

Travel for leisure
Buying the latest model of cellphone to keep up with trends
Birthday Parties / Fiestas
Plastic Surgeries

Emergency expenses are those expenses in which you have no choice. It involves basic necessities while discretionary expenses do not qualify as emergency expenses.

Where To Place Your Emergency Fund?

Emergency Funds should be highly liquid and easily accessible. It is not recommended to keep it at home because that is too easily accessible and too tempting not to access. In the same way, it is also not advisable to invest it in investment vehicles such as bonds, funds and stocks. More often, these kinds of investments have terms and expiration dates. You will just end up paying for pre-termination fees if you need the money before it matures.

The best place to put your emergency fund is through a bank. Open a regular savings account that is interest bearing. Please take note that this should not be mixed with your regular savings / checking account. Remember it should be readily accessible but not too accessible at the same time.

How Do I Build It?

The money jar budgeting system recommends that we allocate 10% of our monthly income to build our emergency fund. Once we have fulfilled the 6 months minimum requirement, it is recommended that the 10% allocation continues to build our savings account.

Secure your financial future. Start building your emergency fund now.

Feature Image by 3D Animation Production Company from Pixabay

Jul

2022

4 More Tips to Improve Your Financial Wellness

Reading Time: 2 minutes

We have provided common sense money advice before. Here are 4 more tips to help you improve your financial wellness. These additional tips should be a big boost to transforming your financial wellness for the better.

1. Pay in Cash

To help you stick to your budget; you need to remove the temptation to swipe your credit card. So it is better to carry cash with you. This way, you can allocate different amounts to different expenses instead of taking out your credit card. You can use envelopes or your wallet dividers to visually distribute your money. With this method, you also get to see how much money you have left. This means that you will be able to say “No” to some expenses or money leaks that is not allocated for in your current budget. Paying for your purchases in cash is one way to help you get closer to your goal of being debt-free.

2. Build Savings

Before you start investing; make sure that you already have your emergency savings in place. Your savings account should be equal to 6 months of your income. This allows you to be able to pay for your basic necessities and regular expenses in case you lose your job. It will also ensure that you have money to support you in case of emergency situations such as needing to repair your house due to natural calamities or needing to buy a new laptop for work, etc. This is different from an allocated savings account for planned expenses. For example, if you want a new sofa; then you can save up for that amount aside from your emergency savings.

3. Financial Health Check

As you are tracking your expenses and trying to stick to your budget; it is important to do a regular health check of your finances. This allows you to see where you can improve things and create a better budget that suits your current needs and goals. If you are paying-off credit card debt, then talk to personnel from your bank to review where you are in your goal. If you are already investing, then review your losses and gains and any potential areas for further growth. More importantly, check the status of your savings; have you maintained it and/or is it growing as your income has grown? What other things can you do to generate more income?

4. Maximize Employee Benefits

One more thing that you can do to improve your financial wellness is to check if your employer provides financial wellness programs. This could be in the form of monthly contributions (thru government agencies) or other programs offered by the company itself with other 3rd party partners. For example, your company might have partnered with a bank to provide employees with special rates for maintaining a time deposit or savings account. Ask your colleagues or inquire from designated personnel in your office if these options are available.

If you are just starting out on your financial wellness journey; make sure that you do your financial wellness assessment first. This way, you know which areas you can improve on and which areas you are good at currently. Don’t forget to keep improving your financial literacy as well. Remember that there is no one budget or investment strategy that fits everyone and works all the time. You always need to be aware about where your money goes so you can adjust your financial strategies accordingly.

Feature Image: Original Photo by Towfiqu barbhuiya on Unsplash.

Jun

2022

10 Gadgets That Help You Save Money

Reading Time: 4 minutes

Modern technology has allowed us to do much more than when we didn’t have our electronic gadgets and devices. These devices have become a necessity in our daily lives and we have many options to choose from.

Initially, these gadgets are major expenses. But with a little research, we can make the right gadget choices so we can still enjoy their convenience while saving money in the long run.

Here are 10 gadgets that can help you save money. Some of them will cost you a big chunk of your budget initially when you purchase them, but they will make-up for their cost with the money you save for the months, and even years that you will be using them.

1. Rechargeable Batteries or High-Capacity Power Banks

We all know the inconvenience of running around with a gadget low on power. Having rechargeable batteries or a high-capacity power bank while on the go saves you the hassle of looking for an electrical outlet just to make an important call on your mobile phone. You can also use these devices to charge your gadgets even at home so you don’t need to suck up electricity each time you need to charge your device. The good thing is; there are high-capacity power banks that can power-up more than one device at a time, even your laptop. Some of them even have designs that are cute or sleek so you won’t be too embarrassed lugging them around.

2. LED Lighting

LED lighting are designed to last longer while consuming less electricity. So gradually replace your old light bulbs or fluorescent lights with LED lighting to enjoy a brighter home without the added cost. LED lighting is also available for other home fixtures such as desk lamps. Some even have dimming functions so you can switch between day light and night light; or white light for working and yellow light for reading.

3. Energy Star Appliances

When buying new appliances, be sure to check for the Energy Star logo. According to their website:

ENERGY STAR products are independently certified to save energy without sacrificing features or functionality. Saving energy helps prevent climate change. Look for the ENERGY STAR label to save money on your energy bills and help protect our environment.

This goes for kitchen appliances such as oven toasters, microwave ovens, refrigerators, even washing machines, as well as lighting fixtures like Christmas lights. So be sure to check the labels on the appliance or ask the sales person for products and brands certified with an Energy Star logo. This is one way to save on electricity in your home.

4. Smart Power Strips

One of the biggest energy leaks in the home and office are gadgets that are plugged in but not in use. Many of us often leave our mobile phone chargers still plugged into the electrical socket even if we are not charging our phones.

A smart power strip allows you to turn off the power for a particular gadget without having to pull it out of the socket. So you can just click a button to turn it on again if you need to use your kitchen appliance or to charge your device.

5. Tablet

Tablets can save you energy as well as money. Many of your favorite books have digital versions so instead of carrying around the actual book, you can have easy access to a ton of books as well as audiobooks with just your tablet. This means being able to carry more books with you on a lighter load. You even help save on paper and conserve trees! Plus, you can also carry scanned copies of your important documents with you and do many other things with your tablet that you can do on a desktop and your mobile phone.

6. Laptop

Just like a tablet, a laptop can also help you save money. It can do many of the things that a tablet can do but in a greater volume and capacity. Nowadays, when our busy schedules don’t allow us to sit in front of a TV screen to enjoy our favorite shows, a laptop is a great way to download your favorite videos and watch them later on. Newer laptop models also feature longer battery life and a ton of upgraded functionalities to help you work faster and accomplish more tasks throughout the day.

7. Vacuum Sealer

If you hate wasting food, then vacuum sealers are your best friend. Together with a ziplock bag and your refrigerator, you can extend the life of your favorite foods. You can cook a big batch of home-cooked meals and freeze them for future meals. This is one way to stretch your food budget.

You can also use a vacuum sealer for bagging your baon or bento to work or school. This ensures that you keep your food fresh and lessens the possibility of food spoilage due to bacteria build-up especially in warm temperatures.

8. Blender

Blenders are a great way to cut down on chopping veggies. You can also use a blender to make your morning smoothies for breakfast-on-the-go or to make soups out of your veggies.

You can also preserve food with a blender. For example, you can place a small amount of water into the blender and put in your peeled garlic. Blend for a bit for a course consistency or blend some more for finer pieces. Then store everything in a jar and keep in the fridge. You can just pull-out the jar and scoop out the required amount of garlic for your recipes. Also works with other spices like ginger, turmeric and onion. You can also use olive oil instead of water for herbs like basil, parsley, and other herbs.

9. Food Processor

For even more variety to your recipes, a food processor is a great kitchen companion. It can chop food finer than a blender and mixes ingredients better. You can also use it to make purees of fruits and veggies for baby food, chop vegetables finely as well as some meats for making veggie balls or meat balls and a host of other foods including ice-cream! It’s especially helpful for baking recipes.

10. Efficient Shower Head

You can also save money even as you shower! When shopping for a shower head, make sure to ask the sales person for a low-flow shower head. This type of shower head can save you gallons of water use per year and thus lower your water consumption bills in return.

Start saving more money now starting with these gadgets. There are many more gadgets that can help you save money; just do your research. They will cost much more but the initial investment will be worth the savings in the long run.

Updated. First published on Pinoy Smart Living on 2018.09.26.
Feature Image: Original Photo by Brooke Cagle on Unsplash.

Apr

2022

Is Having a Credit Card Good or Bad?

Reading Time: 4 minutes

Have you ever wondered whether having a credit card is good or bad for you? For most newbies in their first jobs, getting a credit card is a sign that they are finally independent! It is a cause for celebration and may cause many to eagerly take the irresponsible first swipe.

Being approved for one might seem like an achievement. It’s like announcement to the world that you can now pay for your own bills. But when you see your first bill or several unpaid bills afterwards; your feelings might change and you might feel less independent and more helpless.

For those already mired in debt, it becomes the object of many negative feelings. They might event want to just get rid of it. The usual advise for newbies is to not acquire one in the first place because it’s a debt trap.

The reality is, you can have a credit card and not be trapped in debt. Many have learned this the hard way and have now learned how to handle this financial tool more responsibly. Here are some reasons and lessons on why and how it can be bad or good for you.

The Bad: How NOT to Use Your Credit Card

Let’s try to get the negative stuff out of the way first. Many of the negative feedback that has accumulated around credit cards is mostly due to a lack of understanding. Not knowing how credit cards work can lead to irresponsible swiping.

To avoid getting into the debt trap, educate yourself. Make sure to read the fine print and ask questions about your credit card before your first swipe. Then, make sure to not do the following:

Charge items that you can’t pay off immediately on your next salary schedule.
Exceed your credit card limit. Please don’t do this especially on your first swipe.
Paying only minimum payments.
Making late payments.
Owning too many credit cards. If you haven’t practiced managing just one, don’t assume you can manage more than one.
Lending it to somebody else.

Sadly, the last one is one of the most foolish things you can do when you get your credit card. Peer pressure is a strong influence and most people just can’t say no to a friend in need. Learn to say NO or you might get yourself trapped in debt that is not even your own. You might even lose a friend in the aftermath.

If you are already having problems; there are ways on how to get out of your credit card debt.

The Good: How to Use Your Credit Card

Now for the good news. Being a responsible credit card user means enjoying its many benefits. You don’t have to be burdened with enormous debt as long as you keep these things in mind:

Pay for your swiped items as soon as you get your salary.
Do not exceed your limit. Try not exceeding 70% of your limit. This gives you some leeway for unaccounted expenses that you need it for.
Pay more than the minimum payment. This will ensure that you lessen the principal amount and not just the interest and charges. If possible, pay your card balance in full every month.
Pay on or before the due date to avoid additional late fees and charges.
Keep yourself to one card and learn how to manage it well.
If a friend needs your credit card, ask them to pay you in cash first, then swipe. Make sure to transfer the cash payment immediately as well.

You should only use your credit card for some else because they need it to complete a transaction. This means that they should already have the cash to pay for the transaction in the first place. It should only be a “way” to facilitate the payment and not the actual payment. If it were to be the actual payment, then they should ask to borrow cash from you instead.

Remember that using your card as the actual payment includes interest fees and charges if not paid on time. So if your friend insists that they will pay for the payment using your credit card; make sure they agree to shoulder additional charges if they fail to pay on the due date.

Why Should You Have a Credit Card?

A credit card can provide you with several benefits if you learn how to use it responsibly. Here are some advantages to having one:

Spread Cost

Credit cards allows you to make purchases that may not be available another time. For example, if you don’t have cash yet, you can use your card to pay for the item. You can then pay your credit card at a later date.

Pay Online

Some online services require credit card payments such as some airline companies and other online shops. It is handy so you can pay for the transaction. You can purchase the item you want which is not available or inconvenient to get hold of offline.

Make Reservations

This also usually occurs online. Some companies require a credit card for you to make a reservation. They do this even if they don’t actually use it to receive the payment from. It just serves as a guarantee or insurance of sorts. It demonstrates to them that you are indeed capable of paying for their services or products.

Consumer Protection

This is one of the most basic but also the most taken-for-granted benefit of a credit card. Most credit cards alert you to online scammers on their black list. If you use it to make a purchase from a blacklisted seller; your credit card company may decide to cancel your transaction automatically. They may call you to warn you about the seller so you can choose to cancel the transaction immediately.

If you have issues with a transaction, or the goods you received are faulty; you can request for a refund from your credit card provider.

Get Something Back

Good credit card payers and loyal users are often rewarded with cash rebates or freebies. These can include free items when shopping like free tickets to concerts, exclusive invites to hotel buffets, special events, rebates and many more.

Of course, all these benefits can only be enjoyed if you are a responsible user. You should have a lot of time to practice as it takes some time to accumulate points.

So is credit card, good or bad? The answer depends on how responsible you are at using this financial tool. If you are fairly good at managing your card, then you are on your way to financial wellness.

Updated. First published on Pinoy Smart Living on 2019.01.22.

Feature Image: Original Photo by rupixen.com on Unsplash.

Feb

2022

Warning Signs That You are Living Beyond your Means

Reading Time: 5 minutes

To live beyond your means simply means that you are spending more than what you can afford. Statistics show that most people are living from paycheck to paycheck without any kind of financial cushion. This was quite evident on the effect of the recent lockdowns on people’s financial lives. While we all deserve to spend our hard earned income; spending beyond our earnings, not saving enough for emergencies and racking up debt in the process are all recipes for financial disaster. To prevent this from happening, you need to watch out for some warning signs that you are living beyond your means. Even if you were doing fine before the pandemic, you might still need to reassess your finances to check if your current income can still support your previous lifestyle.

It is quite easy to fall prey in this age of consumerism. A wide range of consumer goods are available everywhere in the malls, supermarkets, social media and online stores. With heavy promotion by the media coupled with the support of the banking system through their generous credit to consumers; living beyond your means is so easy to do these days.

The FOMO (fear of missing out) and YOLO (you only live once) mentalities brought about by social media only made matters worse. These mentalities have become the new norm that they have dictated the spending habits of many. While it gives you satisfaction in the present, it gives disservice to your future well-being.

Warning Signs That You Are Living Beyond Your Means

Before it is too late, here are some key indicators that you are living beyond your means. They will serve as warning signs that it is time to scale back on your spending immediately.

1. More than 30% of your Income Goes to your House

Housing is the largest expense of most households. Most people dream of a big nice house thinking that they are buying an asset. However, most people don’t realize that their primary home is no longer considered an asset but rather a liability.

Unless you have a way of lowering your monthly expenses on other parts of your budget, you will find yourself in the poverty cycle if you are spending more than 30% of your income on your house. The allure of a bigger and better house will become a financial problem.

Now, calculate what percentage of your monthly income goes to your housing expenses. Housing expenses include your monthly amortization, real estate property taxes, association dues, house insurance, maintenance costs and utilities. If the amount exceeds more than 30% of your monthly income, you will be much better off finding a less lavish home that will fit your budget.

2. More than 15% of your Income Goes to your Car

If you can purchase your car for personal use in cash, then there is no problem. Problem arises when you borrow money in your auto loan purchase.

Have you heard of the 20/4/10 Rule on Auto Loan? The 20/4/10 Rule keeps your finances in check when it comes to purchasing a car. The rule says if you are going to buy a car, you need to make at least a 20% downpayment. In addition, the terms of payment should not exceed 4 years and that your monthly amortization should not exceed 10% of your monthly earnings. If you cannot follow these rule, it simply means you are buying a car that you cannot afford.

Minimum 20% downpayment
Maximum 4 years term
Monthly payment should not be greater than 10% of income

If you add up all other transportation expenses like fuel, maintenance costs, insurance and your monthly amortization; the total should not exceed more than 15% of your income. If your monthly transportation expense goes beyond that, you are simply living beyond your means.

3. Overdue Notices Fill Up your Mailbox

If you have been receiving late payment, overdue and disconnection notices, or worse you find your utilities constantly disconnected; then that’s clear sign that you are living way above your means. Your monthly budget should include payments for bills and utilities. If you can’t pay for them then it is time to reevaluate which ones are necessities and which ones you are better off without like cable subscription for example.

4. You Borrow Money from Others

If you find yourself borrowing money from friends and relatives or take out personal loans to pay your bills then that is a clear sign that you cannot afford your current lifestyle. Ideally, your income should be enough to cover your day-to-day expenses.

5. You Constantly Worry About Money

You are constantly worried about money, even with small expenses to the point that it is already keeping you awake at night. Your health is already affected. You even get into strenuous discussions and arguments with your spouse.

It is normal to worry about your finances every now and then but if you are constantly experiencing these things on a daily basis. Then, it is so obvious that you have money problems.

6. You have No Savings / Emergency Fund

You have no savings or emergency fund. Even if you have it before the pandemic, you have already used it all up. There is no money left from your current income to set aside for future savings.

Savings are needed for future use. An emergency fund is for unexpected and unfortunate events like a pandemic, unemployment, illness, disability or simply for car repair purposes. Ideally, your family should have enough money saved to cover at least six months worth of your living expenses.

7. You have Rising Credit Card Balances

If you are one of those people who only pays the minimum amount due on your credit card balance every month, then that’s a sign that you are living beyond your means.

Ideally, you should only charge what you can pay off at the end of each billing cycle. Unfortunately, many people have severe problems with credit card usage. If you don’t pay the total amount due on or before your due date, your outstanding balance will charge additional interest rates and fees, and these are carried over every month causing your debt to balloon month after month.

8. You Never Set A Budget

If you are ask questions about your budget like how much do you spend on food each month and you have no idea what the answer is, then you have a problem. A written budget is one of the first and most important steps towards financial freedom. How will you know if you are living within your means if you have no idea where your money is going? Having f inancial goals and sticking to your budgeting plan can prevent money leaks and help you live within your means.

9. You Run Out of Money Before your Next Paycheck

Do you find yourself short of cash long before the next payday? If you do, then that is another sure indicator that you need to downgrade your lifestyle. Your paycheck should be enough to cover your expenses for the period.

10. You Shop / Vacation on Credit

Credit is good when used wisely. It is very convenient because you don’t need to pay in cash for the total cost of an item or service right away. It is fine to avail of zero percent installment offers just as long as you are sure that there are no hidden charges. The rule of thumb is that your payment terms should not exceed the total life span of the item that you are buying.

It is a whole different thing for trip purchases. Yes, you can go on that well-deserved vacation only if you have saved enough for it. Make a plan to save money for that dream vacation.

You can use your credit card for protection. Like for example, some credit card offers free travel insurance if you book using their card. All other vacation expenses should be paid in cash. You can also use your credit card during vacation but for emergency purposes only. If you are one of those people who loves taking vacation all on credit, then you are living beyond your means.

If you score at least four and above, then take it as a warning sign that you are living beyond your means. You have two options, either you increase your income or downgrade your lifestyle. But whatever your choice is, it is best that you start learning financial literacy now to avoid finding yourself in the same situation later on.

Edited Version. First Published in Pinoy Smart Living on 10.30.2018

Photo by Artem Beliaikin from Pexels

Feb

2022

Are You Financially Well?

Reading Time: 2 minutes

Money cannot buy happiness but let’s face it, we need money in order to survive. How can we buy our food without money? How do we pay our bills and how are we going to send our children to school? Whether we like it or not, money is an important factor in our lives. The lack of money can greatly influence our wellness. Many people get sick and many relationships are shattered because of the problem with money. Thus, it is important that we take care of this dimension of wellness. So ask yourself, are you financially well?

Financial Wellness

What is financial wellness? Financial wellness is being able to meet financial obligations and manage finances effectively. When you are financially well, you don’t worry about putting food on the table and paying your bills. You feel secure about your financial future. You are also not worried about losing your job because you have enough passive income to keep you afloat. But most importantly, you can make choices that will allow you to enjoy your life. You will not settle for a job that you do not enjoy. In a nutshell, it is all about having peace of mind when it comes to money.

Sadly, statistics reveal that more than half of the world’s population are living from paycheck to paycheck. Many people don’t even have money set aside for emergency use. And many more are buried in credit card debt. It is a never ending cycle called the rat race. Surprisingly, even those high-income individuals are part of the rat race.

It is not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.
-Robert Kiyosaki

This means that even if you have a high income, it does not necessarily mean that you are financially well. Financial wellness includes the ability to manage finances effectively. It includes paying your bills in time. It involves not only saving but investing as well. Thus, financial literacy is an important factor in achieving financial wellness.

Road to Financial Wellness

Contrary to popular belief, financial wellness is not reserved only for those people who are born rich or those with a high-paying job. Anyone can achieve financial wellness, regardless of background, age, gender, occupation, race, country and occupation. It is all about the mindset. Having a wealthy mindset is the only road towards financial wellness. Change your p overty mindset to wealth mindset and soon you will find yourself financially well.

Are You Financially Well?

To kick off your journey towards financial wellness, it is important to first assess the state of your financial wellness by answering the following questions:

Do you keep track of your expenses?
Are you spending less than your monthly income?
Do you have and follow your monthly budget?
Do you pay all your bills in full and on time?
Do you have an emergency fund that can cover at least 6 months of your monthly expenses?
Do you have a well-defined long-term financial goal?
Is the amount of your debt manageable?
Do you have insurance that is enough to support your financial needs in case of emergencies?
Can you sleep soundly at night without having to worry about money?
Do you have the ability buy anything that you want and the freedom to choose what you want to do with your time without money issues?

If you answered YES to at least 7 of the questions, then, congratulations! You are financially well!

Dec

2021

Christmas Gift Ideas for Less

Reading Time: 4 minutes

Need Christmas gift ideas for less? Just a short time before Christmas day is upon us. If you’re still not done with your gift list, you might be stressing out. But all is not lost yet. There are still some gifts that you can make for your loved ones and friends without having to splurge. Some of them you can make at home too.

Your gift doesn’t have to be expensive for it to be appreciated. Personalized gifts are always much appreciated. It gives the gift a sentimental value that commercial items cannot convey no matter how pricey. Here are some gift ideas for less that you can create at home for your loved ones.

Recipe Jars

This is a nice gift for friends and loved ones who love their pancake, waffle or brownies. Just pick a recipe, measure all the dry ingredients and place them in layers into the glass jar. Try to alternate the ingredients in such a way that the colors make an interesting pattern.

Print out the recipe on sticker paper and paste unto the side of the jar. Or print it on cardboard paper and tie to the neck of the jar as a gift tag. You can also use this for chocolate drink mixes or coffee blends.

DIY Kits

Got a family member who loves drawing and coloring? Gather different coloring and drawing materials; a sketchpad, pencils, erasers, a ruler and sharpener. Put everything in a handy file folder that they can conveniently carry with them.

For a friend who loves making her own jewelry, gift them with more beads and trinkets for their jewelry-making collection. You can get them the special beads, or a tool that they’ve been wanting to buy; but just can’t get their hands on. This is one of the Christmas gift ideas for less that’s always appreciated by young students. They are the ones who are passionate about their hobby but can’t afford all the materials.

You can also gift friends with a kit for getting rid of negative energy in their homes and work places. This gift does not only benefit them personally but the people in their space too.

Personal Coupons

If you’re broke but really want to make the effort; then gift your family members and friends with your time and energy instead. This is one of the Christmas gift ideas for less that doesn’t even cost you anything.

Design your own personal coupon stating a service that you will offer for a certain duration of time. For example, you can give your mom several coupons for a neck and shoulder massage for 20 minutes. You can give your dad coupons for washing the car and so on. Give the gift of a memorable experience that you will all recall with a smile later on.

For friends, you can give coupons for accompanying them to shopping errands. They can then claim these coupons any time of the year. Make sure that you state in the terms and conditions that they have to schedule these events with you first.

Use Your Talents

If you’re good at crocheting or knitting; make a scarf, or a beanie, or a pair of mittens, for a good friend or loved one. If you’re good at sketching, drawing or painting, then gift one of your creations to a valued friend.

Got a talent for writing poems? Create one for a special friend and print or write by hand on special paper. It would be great to present this gift by reading it to them aloud. Preparing this kind of gift is a fun process too. Plus, the result can be a very memorable experience.

Are you good with a camera? Take candid photos of your friend, select the best ones and display in a special picture frame. You can also put these in a scrapbook. Label each photo to tell a story about your friendship. Or just showcase your friend’s endearing character or unique personality. You get the idea, so go ahead and start planning for your next creative gift.

Use Available Resources

If you’re not too confident about your talents yet; then the next best thing that you can do is to use your resources to create a personalized gift. Get on your computer and go online.

For a friend who loves their tunes, download them a collection of their favorite songs. Transfer to a USB so they can load it on their laptops and mobile phones. Got a friend or relative who is too busy to take care of putting together a business card? Get your design skills to work and gift them with a simple calling card. Now, they don’t have to write their contact details on a piece of paper whenever they meet clients.

Reduce, Reuse, Recycle

You know the saying that one man’s trash can be another man’s treasure? If you’ve got stuff just lying around and gathering dust; think of who these might be of more use to and give that item to that person as a gift. Not only will you reduce your clutter, you get to reuse stuff and recycle them for a purpose.

You might have a friend who’s been pining to have a jacket or bag just like what you have. If you’re planning to buy a new one anyway, why not give your old jacket or bag to this friend? You might have a friend who loves your sense of style. If you’ve got a top that you already have several iterations of; why not give away the one you don’t use most often to your friend?

Got an old lamp that you’ve never even used? Check if the bulb still works and replace if necessary. Give to a friend who has just moved into a new house; or who has been wanting to make-over their bedroom. This is another one of the Christmas gift ideas for less that will definitely be appreciated by the receiver.

Give with Love, Receive with Gratitude

These are just examples of what you can do with your skills and talents. Some creative thinking is needed to make a personalized gift that your loved ones and close friends can appreciate. But before rushing for supplies; set aside some time to do some writing. Make a list of what gifts you can create or find in your own home. Think of what gift would suit the tastes and personalities of certain friends and loved ones.

As a last note, some of your friends and relatives might be giving you these kinds of gifts too. Remember to be grateful and appreciative of all their efforts. After all, it’s the thought that counts. Bonus! You can add gift-planning to the list of things you can do for fun.

DIY gifts take time and effort. Because of this, they truly communicate your appreciation for the person you are giving them to. So go ahead and give these DIY gift ideas a try.

Updated. Republished 2020.12.03. First published on Pinoy Smart Living on 2018.12.17.
Featured Image: Original Photo by Kira auf der Heide on Unsplash.

Nov

2021

No Need to Follow Fashion Trends

Reading Time: 2 minutes

Are you someone who always wants to be with the “in” crowd? Are you always on the look out for what’s new in fashion? Do you fear being left out-of-style? The desire to be always in style with the people around you can be bad for you if it has become an unhealthy obsession. Being in-style maybe a sign that you are trying to keep up with what is considered beautiful. Fortunately, our concept of what is beautiful has transcended just physical appearance. Fashion concepts have also been influenced by this development. Here are some reasons why there is no need to follow fashion trends.

Trends Come and Go

Fashion trends always come and go. Most trends are short-lived. Some may even serve merely as a marketing tool so they have a definite duration. Some fashion pieces are produced as limited edition items. So if you and your friends keep following every fashion trend out there, pretty soon you will have accumulated a lot of clothes and accessories that you can’t use. In the end, you might have to spend more time decluttering your wardrobe than wearing anything in it. Having a fashion classic, such as a little black dress in your closet, is a better option than a whole closet of quick fashion pieces.

Major Money Leak

Having to purchase whatever is fashionable also means that you are creating a major money leak for yourself. With the number of fashion trends cropping up each month; no one will ever be able to buy all of them. You will also not have enough occasions to wear them to. You will just end up living beyond your means. Unless you are a celebrity, wearing an item only once is quite a waste of money. Chasing after fashion trends will not only ruin your budget but maybe your work and social schedules too. If you want to look chic and elegant; there are ways to look expensive on a budget.

You Lose Your Self

Being on-trend means that you don’t develop your own sense of style. Everyone has a fashion sense; whether it be comfy, utilitarian or you just love statement shirts or flower patterns. Maybe you have a collection of vintage belts or scarves that you haven’t worn yet because they are not in style. These are valuable items not just because they are classic fashion pieces but also because of their sentimental value. When you keep following fashion trends; you lose your own personal style.

Don’t be a slave to fashion. Chasing fashion trends is like trying to keep up with the Joneses. Yes, you only live once so go ahead and experiment for fun; but do so in a sensible way. Fashion should be an extension of your self expression. You should develop your own personal style. Your own style not only allows you to express your sense of fashion; it also makes you more memorable to the people you engage with. Remember that when you dress different, you think different. Having your own sense of style also means you can use the clothes you are comfortable wearing. If you have a closetful of vintage items that you would love to use; then create your own style and wear it proudly. Start with some basic closet must-haves and then work your way from there.

Feature Image: Original Photo by Tamara Bellis on Unsplash.

Oct

2021

5 Ways to Improve Your Financial Literacy

Reading Time: 5 minutes

There are many ways to improve your financial literacy. Money is involved in almost everything we do in our daily lives. We work at our 9-to-5 jobs to earn money because we have so many things to spend it on. Most of us barely get by on our monthly income, making it seem like we are working for money instead of making money work for us.

This is why financial literacy is important. Learning about money and understanding how you can make it work for you, instead of the other way around, will help you reach your financial goals quicker.

Learning about your finances can only start with the right mindset. Most people are afraid to tackle money issues because it is a sensitive subject that is tied up with their personal habits. If you want to save money, you need to accept the fact that you have to sacrifice some personal conveniences and luxuries to start saving.

Instead of treating your finances as a boring subject or a scary one, try to look at it with an attitude of curiosity. This is the only way you can start learning. Don’t be judgmental; just be curious about yourself, your money habits, and the possible ways you can make your money work for you.

Here are 5 ways you can start learning to improve your financial literacy.

1. Learn and Talk About Your Money

The first thing you need to do to learn about money is to become aware of how you spend your own money. Track your daily expenses in a notebook, a spreadsheet, your mobile phone; whichever way is convenient for you. Do this for a whole month and before the month ends, you will already see a pattern on what you spend your money on. These are your spending habits. Based on these habits, you can start learning ways on how you can better spend your money.

Tracking your spending also helps you identify your attitude towards money. Do you have a poverty mindset or do you have a wealthy mindset like rich people? Most people have a poverty mindset. Learning about your finances and having a plan of action will help you develop a wealth mindset.

Another habit you can develop is to be comfortable talking about money. Talk to other people about how they spend their money. Do they follow a budget? Has their budget worked for them so far? You might even find a buddy who you can learn from or who can help you stick to your money goals.

2. Make A Budget and Follow It

Once you’ve identified your spending habits, it’s time to make an evaluation. Look at the items you are spending money on and categorize them. Identify which are your major expenses. From there, identify which are the most important ones; the ones you need and can’t live without and which ones you can do without. Those items you can do without are your “money leaks”. You are spending money on these items unconsciously and these may be bigger items than just your cup of coffee from your favorite cafe each morning.

Based on this general category of your needs and your money leaks, create a budget. Your budget should help you plan out how much money you must allot for the important items on your list and how much you can spend on your money leaks (if there is extra money for them in your current monthly income). This way, you don’t feel deprived but you can control how much you can indulge in your favorite luxuries – not every day but maybe once or twice a week will allow you to save money.

Try to follow your budget for at least 3 months and adjust it accordingly until you create a budget that works just right for you. Then follow it each month while keeping track of your spending and your savings. This will help you discipline yourself so you can manage your money better. A budget will be a big help to improve your financial literacy.

3. Create Long-Term Money Goals

After learning and adjusting your spending habits, it’s time to create long-term financial goals. How do you plan to spend your money a year, 3 years from now? Having extra money tucked away in our savings account often inspires us to take up our buried dreams that we’ve kept in the back burner because we needed to earn thru a day job. This is the starting point of how you can make money work for you.

Write down how you want to spend your money in the next 3 years and even 5 years. Are you going on a travel adventure? Do you plan to put up your own business? Do you want to buy your own apartment? Are you thinking of studying again? Do you want take up that course you really wanted to take in college but had to give up to follow your parents’ advise?

Write down your dreams and do your research to figure out how much money you will actually need to make that dream a reality. Once you have the figures, then you can start learning new ways to not only save more money but to make your money grow.

If one of your major goals is to get out of credit card debt, write it down and see how you can adjust your spending to pay it off as quickly as possible.

4. Learn and Start Investing

Now that you have a clear idea of how much money you have, how much you are spending and saving and how much money you need for your financial goals; it’s time to start learning about investing. Unfortunately, money lessons are in most school curriculums so most people have to learn it on their own.

Investing is not only saving more money, it means creating wealth. One of the most convenient way to start growing your money is to enroll in your bank’s investment program. Be sure to ask your bank about it and learn how your money can earn from their program.

You can also consult a professional financial adviser who can help you decide on the best investment tool suited to your current situation and financial goals. This way, you are already growing your money while you are looking for other ways to earn more. In the meantime, stick your budget and keep saving. The desire to learn is your first step to further improve your financial literacy.

5. Keep Learning On How to Make Money Work For You

There are tons of resources about investing online and there are many books that you can read too. We have compiled some of the basics for you in these articles:

You can get more financial wisdom from these articles but be sure to read books too:

There are many resources that you can easily access to improve your financial literacy. As you learn more and enhance your personal money management skills, you will eventually get the opportunity to learn about financial instruments that you can use to increase your wealth.

You can read books, watch online videos and listen to podcasts about financial management or about investing tools that you are interested in. You can also take courses to help you learn about finances. Just keep on learning as much as you can so you have a better understanding of what works for you.

Updated. First published on Pinoy Smart Living on 2019.09.20.
Feature Image: Original Photo by Mathieu Stern on Unsplash.