expenses

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.

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.

Apr

2021

3 Types of Expenses You Need to Manage

Reading Time: 2 minutes

There are 3 types of expenses you need to manage in order to be successful in your financial goals. These can be applied to any items you have on your monthly budget. Identifying these kinds of expenses helps you schedule your expenses. In this way, you don’t fall victim to little money leaks that can ruin your budget.

1. Fixed Expenses

Fixed expenses are the types of expenses that you incur in predictable amounts and in consistent intervals. These usually happen monthly such as utilities, rentals, loans, insurance, subscriptions and credit card payments. These can also include your tithes, savings and investment funds if you add to them monthly.

Since these expenses occur on a regular basis, you can schedule them automatically. This one of the 3 types of expenses that is the easiest to manage in your budget.

With a fixed amount and schedule, it is easier for you to decide which expenses to reduce or remove. This allows you to maximize other items in your budget. For example, you can downgrade your mobile plan subscription. Then, you can add more to your savings or investment fund.

2. Periodic Expenses

Periodic expenses are similar to fixed expenses but they occur less frequently. These kinds of expenses can also be scheduled quarterly (every 3 months), bi-annually (every 6 months) or annually (every year).

The dilemma with periodic expenses is that they are usually necessary. That’s why it is hard to remove them from your budget. These expenses usually include maintenance costs. Examples include oil change for your car, car registration fees, annual membership fees and annual tax fees for a business.

Unlike fixed expenses, we tend to forget periodic expenses. This results in paying penalty fees which ruins your budget. It is very important to include these types of expense in planning your budget. The advantage is that you have more time to prepare for them.

3. Variable Expenses

The trickiest type of expense to manage are variable expenses. These types of expenses don’t occur regularly but they are still important. Variable expenses can be subcategorized into necessary and discretionary.

An example of a variable but necessary expense is gas for your car. This does not occur regularly but you have to budget for it when it becomes necessary. A discretionary, variable expense includes a new pair of shoes or travel funds. These don’t occur regularly but they are important for your well-being.

Discretionary expenses are usually items that you reward yourself with. Sometimes, they can be impulse buys which you incur because you are feeling down and you want to feel better. Your behavior and priorities will define what variable expenses you cut out or save up for in your budget.

Which type of expense do you usually have trouble managing? If you haven’t started budgeting, then the first step is to track your expenses. Then try out the money jar budgeting system and adjust as you need. This will help you control the flow of your money. It is also helpful to know more about the money lessons you didn’t learn in school. Get more financial inspiration for own financial goals with these books on wealth and success.

Feature Image: Original Photo by Sasun Bughdaryan on Unsplash.

Mar

2021

How To Reboot Your Finances

Reading Time: 3 minutes

What stage are you in in your financial life? If you are not happy with where you are right now, the good news is that you can actually reboot your finances once and for all. True, your financial woes will not disappear overnight but it will give you a chance to change your financial future. In the computer world, a reboot means the act of instantly shutting down your computer and restarting right away. The same is true with your finances. You can actually shut it down and restart right away. Don’t wait until next month, next year or when things start going well again. Do it as soon as the clock strikes zero o’clock . So, how to reboot your finances?

1.Abstain from Spending

The first thing to do is halt all spending at once. Unless it is a necessity, stop all unnecessary spending for now. A cup of coffee, a pack of cigarettes or a can of soda may be little expenses but it is actually these kinds of small expenses that is harming your budget. While you are at it, refrain also from using your credit card. Until you have fully understood how credit cards work, it is best to put your card use on hiatus.

Beware of little expenses, a small leak will sink a great ship.
– Benjamin Franklin

2. Track your Spending

The next thing to do is to track your expenses. Why do you need to track your expenses? The main reason why you should write down all your spending is for you to be able to identify where your money is going. Record everything that is going out of your pocket even small ones like a piece of candy, tips or parking fees. Don’t miss anything. Only through knowing will you be able to control your finances and eliminate bad spending habits.

3. Set Financial Goals

Now that you know where you are right now in your finances, the next thing to do is to define where you want to go from here. Thus, it is important to set your financial goals . Identifying your short-term, mid-term and long-term goals are crucial in your journey towards financial freedom. Your goals will help you make better financial decisions in the present. For example, you will not do an impulse buy on a new handbag that you see on the display window of a mall when you have an upcoming spring trip to Japan or New York for example.

4. Follow a Budget Plan

A budget is a financial plan on how you plan to spend your money. Since it allows you to plan your expenditures, following a budget will help you define your limits as far as spending is concerned. A budget will help you know if you can afford something or not. T. Harv Eker, best-selling author of Secrets of the Millionaire Mind introduced the money jar budgeting system. It is a simple money management system that will not only solve your finances but you can actually lead you to wealth accumulation.

A budget is telling your money where to go instead of wondering where it went.
– Dave Ramsey

5. Pay-off Bad Debts

Once you have your budget plan in place, you must first focus on paying off your bad debts. You see, not all debts are created equal. There is such a thing as good debts and bad debts. Good debts are money that you owe that can help you build your wealth over time. A housing loan is considered good debt. Money that you loan to use as capital for your business is also considered good debt. Bad debts on the other hand, drags you down. Examples of bad debts are consumer and credit card debts. Thus, it is important to prioritize paying off bad debts first.

6. Start Investing

Saving money alone is never enough. In order to grow your wealth, you need to learn to invest. As opposed to working for money, investing allows money to work for you. There are so many investment vehicles to choose from depending on your risk tolerance. You can invest in bonds, funds, stocks or stock options. You can also invest in real estate, jewelries, antiques, art pieces, even luxury watches and bags.

7. Raise Your Financial IQ

And last but not the least is you should make an effort to raise your financial intelligence. Financial literacy equips you with the knowledge and skills that you need to be able to manage money effectively. There are many things that you wish you learned in school. Unfortunately, most schools do not teach money management. Thus, it is up to you to fill the gap.

What are you waiting for? Reboot your finances now. Good luck!

Feature Image by Amit Karkare from Pixabay

Jan

2021

5 Big Ways to Save on Electricity in Your Home

Reading Time: 5 minutes

We use a lot of electrical devices and appliances in our homes and there are a lot of ways to save on electricity so we don’t get a shock when our bill arrives. Here are 5 big ways, and small ways often ignored, that will help you save on electricity in your home.

Save on electricity in your home in big and small ways.

1. Maximize Natural Means

Utilizing your home’s features to combat cold or warm weather issues will help you save on electricity costs in your home.

Curtains are not just decorative but are useful to control your house’s temperature too.

Close doors and windows to trap heat or cold air. Especially when using electrical devices in a room, be sure to close doors and windows to trap in warm or cool air when using a heater or an aircon unit.

Use your curtains and beddings to trap more heat during cold months. Your curtains serve as natural ventilation for your whole house so open or close them to help regulate temperature inside the home in different weather conditions. Use thicker blankets during cold months and thinner ones with lighter materials during hot months.

Let plants help with ventilation. Place plants indoors to provide shade as well as encourage natural air circulation inside the house. Plants can be placed in all parts of the house including the kitchen and bathrooms. They not only get rid of unpleasant smells but also generate a lot of oxygen to cool and freshen up a room.

Turn off electrical devices when not in use. A common and simple, but often forgotten method to save on electricity, is to turn off appliances when not in use. If you are going out of a room, make it a habit to switch off the lights and the aircon or heater especially if you will be gone for a while.

2. Resort to Low-Cost Alternatives (Whenever Possible)

We need to evaluate what types of appliances we really need to use. As much as possible, choose the option that will be less costly.

Do you really need to turn on the aircon unit or will a ceiling fan do?

Use a ceiling fan instead of the aircon unit if it’s not too hot. If you’re feeling hot in a room, evaluate if you really need to turn the airconditioning on or if a ceiling fan will do. If it’s not the height of summer, perhaps the electric fan is a better and cheaper choice.

Install a dimmer to control your use of light. There are rooms in the house that we access at different times of the day which means that we also need different amount of lighting each time. Install a dimmer to control the amount of light you use at different times during the day. This way you ensure that you only use the amount of light you actually need.

Use a power surge strip with switches. Plug common standby devices such as phone chargers into a power surge strip with individual switches. This way, you don’t have to unplug the charger each time. You can just turn off the switch instead.

3. Save Energy in the Kitchen

We have a lot of energy-sucking devices in the kitchen but there are lots of ways to tame these electrical vampires. The kitchen is an area where we can save big on electricity in our home.

Use your stove and oven wisely to reduce electrical costs.

Thaw food in the fridge to shorten cooking time. The night before, transfer food from the frozen section of your fridge to the cooling section to thaw them instead of leaving them outside in room temperature on the day you will use them. Doing this will help you thaw food while keeping them safe from contamination. They will be ready to cook when taken out from the refrigerator so you don’t have to wait for them to thaw, reducing your cooking time.

Allow food to cool before putting them in the refrigerator. Let food cool properly to room temperature to maintain your refrigerator’s temperature. When putting in hot food, this will cause your refrigerator’s cooling system to work harder to quickly cool the food.

Don’t put uncovered food or drinks inside the refrigerator. Condensation from uncovered food and beverages, especially when they are still warm and steaming will cause your refrigerator to work harder to maintain the cool temperature.

Keep your fridge full. If you have a lot of space inside because you have used most of your groceries, use bottles of water to occupy the space. Your refrigerator will use more energy to cool the empty space than if there was something inside to occupy the space.

Turn-off stoves and ovens earlier when cooking. The remaining heat will continue to warm the cooking vessel which will continue to cook the food.

Preheat the oven only when needed. Preheating is important for foods that take a long time to cook such as meat. Otherwise, preheating is not really necessary.

Cook with lids on. To further make cooking faster, cook with your cooking vessel’s lid on. This will maximize the use of heat and hasten cooking time so you use less energy.

Air dry your dishes. Instead of using the dishwasher’s dryer, opt to air dry your dishes instead to save on energy.

Plan and cook your meals ahead of time. Plan a meal preparation schedule once or twice a week so you only use your kitchen appliances during those times instead of every day.

4. Save Energy with Your Laundry

Washing clothes, like cooking, take up a lot of energy. Here are some ways to reduce electricity usage when doing your laundry.

Laundry can be such a chore but you can save big on electricity bills if you do your laundry right.

Wash with cold water instead of hot. This will not only prolong the life of your clothes but reduce your washing machine’s energy use too.

Use shorter wash cycles. Again, this is a way to preserve your clothes life longer and reducing energy cost at the same time.

If possible, air dry your clothes rather than using the dryer. The dryer in your washing machine is one of the biggest energy vampires in your house. If the sun is shining outside, air dry your clothes instead.

Use dryer balls. If you do use the dryer, toss dryer balls with your clothes to help dry the clothes faster. This will also help make your clothes softer and fluffier when you take them out from the dryer.

5. Practice Regular Maintenance Habits

To keep your appliances and devices in tip-top shape so they don’t become huge energy vampires; follow these tips to save more on your electricity budget for your home.

Clean and maintain your appliances to maximize their use and save money.

Regularly clean your appliances. Appliances can accumulate dust and gunk which will hamper their normal working condition. Regularly clean them to keep them in efficient working condition.

Stick to maintenance checks. Don’t forego scheduled maintenance checks especially for appliances with lifetime warranties. This ensures that potential issues will be readily addressed so you don’t need to spend a big amount for a replacement later on.

Get repairs done as soon as you detect them. When an issue has been detected, have the repairs, replacement parts or cleaning requirements completed as soon as possible. This will save you from incurring more expensive repair cost later on when the problem progresses and will save you money on buying a replacement for an appliance that has gone beyond repair.

We’re sure you have other tricks to add to these tips to save on electricity costs. Share them with us in the comments below or on our Facebook page. Your monthly budget will surely be looking great with more savings.

BONUS TIP: Track your expenses so you can see where you can save even more.

First published on Pinoy Smart Living on 2018.12.03.
Feature Image: Original Photo by Rodolfo Clix from Pexels.