savings

4 Ways to Deal with Rising Inflation

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.

Posted by H.J. Rangas in Financial, 0 comments
Top 5 Things to Save Up for That Are Totally Worth It

Top 5 Things to Save Up for That Are Totally Worth It

Reading Time: 3 minutes

Saving money can sometimes be difficult if you don’t have a specific financial goal in mind. Aside from building your emergency fund, here are 5 top things to save up for that are totally worth the effort.

1. Retirement Fund

We often forget that we need to save up for our retirement. This is because our regular expenses make up most of our budget. However, we need to keep in mind that we eventually need to get out of the rat race and retire from work. So saving for our retirement fund is a long-term savings plan that gives us peace of mind that we can still live comfortably even after our working years. This can be in the form of an insurance fund that pays for your pension, as well as a pension plan from a government social security program that you pay regularly in your time as an employee.

2. Property

Having your own place to rest, indulge in your hobbies and spend time with your loved ones is always a good goal to save up for. Usually, you save up for the downpayment first, then for the monthly mortgage. This could be a condo unit that makes it more convenient to go to work in the city; or a piece of real estate, land that you will eventually build a house on for your family to settle in. If you can’t afford or it is not practical to have property at the moment; then saving up for a long-term rental is also a good plan. Eventually, you will save up for property that you will earn from by having other people rent it.

3. Education

Learning should be a life-long goal and it should be something that you need to invest in. Education is vital for personal growth. If you do not challenge yourself, you will not grow. Saving up for education includes subscriptions to gym memberships and/or a nutritionist or meal delivery service to keep yourself healthy. It could also be tuition or subscription to online courses to improve your knowledge and skills in your field of work. Or you may save up for learning more about your hobby and buying the materials for it so you can start a side hustle and eventually turn it into a business.

4. Used Car

Your own transportation is always a useful goal to save up for. It not only makes going around convenient; it also means you can spend more time with your family members, even if it is on the road. A used car is a practical choice as it is less expensive than a new one. Just make sure that it is still fit enough for use for a long time and that the papers are all in order. Of course, if you are able to save up for a new car, then do so. The feeling of having to spend on a luxury item through your own hard work is always a priceless experience.

5. Experiences

As we work hard for our family and loved ones, we must not forget to enjoy life in the process. That is why we need to save up for experiences or allocate fun money in our monthly budget. This is a short-term savings plan that allows us to reward ourselves for our hard work. It is also an opportunity to enjoy time with the people who we are working hard for. This can be as simple as dinner with friends or loved ones, a road trip or a relaxing weekend getaway; or even a week-long vacation to rest and recharge. Making good memories with your favorite people is always a rewarding experience.

These are some of the things you can save up for; for both long-term and short-term goals. You can have other goals on your list too. The only requirement is that they will contribute to making your life better and your future brighter.


Feature Image: Original Photo by cottonbro on Pexels.

Posted by H.J. Rangas in Financial, 0 comments
Emergency Fund: Why It Matters

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.


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Posted by A.L. Jonas in Financial, 0 comments
4 More Tips to Improve Your Financial Wellness

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.

Posted by H.J. Rangas in Financial, 0 comments
Are You Financially Well?

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 poverty 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:

  1. Do you keep track of your expenses?
  2. Are you spending less than your monthly income?
  3. Do you have and follow your monthly budget?
  4. Do you pay all your bills in full and on time?
  5. Do you have an emergency fund that can cover at least 6 months of your monthly expenses?
  6. Do you have a well-defined long-term financial goal?
  7. Is the amount of your debt manageable?
  8. Do you have insurance that is enough to support your financial needs in case of emergencies?
  9. Can you sleep soundly at night without having to worry about money?
  10. 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!

Posted by A.L. Jonas in Financial, 0 comments
Common Sense Money Advice That People Don’t Follow

Common Sense Money Advice That People Don’t Follow

Reading Time: 3 minutes

Money has always been a top source of stress for most people.  If not addressed, too much worrying about money can lead to serious physical and emotional problems. It can even result in a breakdown in relationships. How to solve money problems then?  There are tons of financial advice that people probably already heard or read about.  In fact, most of these advices are simply common sense yet one the greatest mysteries about life is that no one really follows them.  It sounds so easy to do but for most people, it is very difficult to follow. Here are some of the common sense money advice that people don’t follow:

1.  Spend Less Than You Earn

This rule is so simple.  Just live within your means.  Obviously, if you spend more than you earn, that will only spell debt.  Even a grade schooler knows that if you subtract more than you add, you will end up with a negative number.  You need to have financial discipline; otherwise, it will be very hard to create wealth. Avoid keeping up with the Joneses.

There are many ways to reduce your monthly expenses.  It helps to have a budget. The money jar budgeting system is a good money management technique because it not only helps keep your spending in place, it also helps slowly build your wealth. If spending less is really not an option, then you need to look for ways to earn more money.  

2.  Understand How Credit Cards Function

How many people are buried in consumer debt simply because they do not understand how credit cards function?

Credit cards are very useful.  With credit cards, you don’t always need to have cash.  You can purchase anything without having to worry of paying them immediately.  However, if you don’t have a basic understanding of how it works, credit cards can turn into your worst nightmare.  Always remember that you are not using your own money when you purchase items using your credit card but rather you are borrowing the bank’s money.

Credit card companies use the power of compound interest to their advantage. Compound interest is a very powerful mathematical concept that you can use to increase your wealth. Unfortunately, it is a two-edged sword. If used against you, it is a sure way to financial bankruptcy. That is why understanding how credit card functions is a necessity if you have a credit card.

Unless you know how to manage your credit cards, it is better for you to refrain from using your credit card altogether.  Use credit cards only in emergencies.  Buying because it is on sale even though you don’t really need it is not a valid definition of an emergency.  

3.  Automate your Savings

One of the lessons of this pandemic is the importance of having a savings account. Life is unpredictable. Saving money can ensure financial stability in case of emergency.

Pay-yourself-first has always been the initial advice that wealth managers will tell you as the first step towards building your wealth.  Unfortunately, most people would rather spend or pay everyone else first before themselves.  Savings always comes last.  Usually, people save using whatever it is that is left (if there is any).

The best strategy to avoid this scenario is to automate your savings.  By regularly setting aside a fix amount through automatic savings, you will soon be able to build up your emergency fund. One of the wealth rules of the richest man from Babylon is to always save 10% of income.

4.  Seek Help from Qualified Persons

If your financial woes are already big enough for you to handle on your own, then it is time to seek help from other people.  If your problems are about money, ask a professional in financial planning to help you.  If you cannot afford your own financial planner, then ask a friend who is an expert in handling money.Don’t just ask any friend.

 The problem with most people is that they normally seek advice from friends or relatives who are close to them.  However, they fail to consider if these people are also having financial problems of their own too.

Think of it this way, if you are in school and you are having problems with your Math subject, obviously, you will not ask your Filipino or Science teacher to help you.  Instead, you will seek the help of your Math teacher or a fellow student who is good in Math because they are the ones who can help you.

Remember to always ask the correct persons for advice.

So, If you want to have a better financial life, it is best to follow the common sense money advice that people don’t follow.


First published in Pinoy Smart Living on 03.26.2019.

Photo by Monstera from Pexels

Posted by A.L. Jonas in Financial, 0 comments
5 Big Ways to Save on Electricity in Your Home

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.

Posted by H.J. Rangas in Environmental, 0 comments
Lessons Learned from COVID-19

Lessons Learned from COVID-19

Reading Time: 4 minutes

The COVID-19 pandemic took everyone by surprise. No one was fully ready despite numerous warnings from scientists for a possible pandemic for decades now. Moreover, a lot of people dismissed it as an isolated case that would probably be contained in one area, just what happened in the past with the SARS, bird flus and swine flus. But the inevitable happened. The virus spread from Asia to Europe and to the Americas at a very rapid pace. And soon, everyone on the planet just woke up to a whole new world. As of this writing, more than 35 million people around the world has already been infected with over a million deaths. We can no longer undo the past but now is the time to learn the lessons from the devastating experience. As we look forward to reliving our life again in the new normal, here are lessons learned from Covid-19.

1.Health is Wealth.

People don’t generally take care of their wealth especially when young. it is common knowledge that health is the most important thing in life. Yet people only starts thinking about their health when there is already some form of illness or disease. This is because it is hard to resist unhealthy eating habits and behaviors. The pandemic reminded us to take care of our health.

In New York state, more than 80% of the total Covid-19 deaths have underlying illnesses.

Covid-19 has been dubbed as a ‘lifestyle virus’. This is because a great majority of those hospitalized, with severe symptoms and those who died have underlying illnesses. And these underlying illness are mostly lifestyle illnesses, or those illnesses associated with a person’s lifestyle. Hypertension, heart disease, diabetes, obesity and cancer are some of the lifestyle illnesses.

If we want to survive this health crisis, it is now time to rethink and change our lifestyle. Develop habits that will improve our immune system so our body can naturally be able to combat viruses and other illnesses.

2. Proper Hygiene

Good personal hygiene is the best way to protect yourself from the virus. A simple act as washing your hands with soap and water can be a life-saving action. Not only does it protects you, it also protects others. The practice of good personal hygiene can prevent you from spreading the virus to others.

3. Importance of an Emergency Fund

Because of Covid 19, many people faced reduced hours while some even lost their jobs and businesses. Unfortunately, not all people from around the world received government aid. The pandemic is not simply just a health crisis, it is also a very challenging time financially for most people. Just imagine what happened to those families who do not have an emergency fund set aside.

Going forward, now is the time to seriously consider setting aside a portion of your future income as an emergency fund. The rule of thumb is to save at least 10% of your income a month. The money jar budgeting system is the best guide on how to budget to ensure that you are ready for the next emergency.

4.Importance of Diversification

If you are a stock market investor, you probably watched in horror as the market dropped significantly. Investing in one company or one industry alone would have hit you badly especially if that industry has been greatly hit. Examples of such industries are airlines, tourism and hospitality. But if your portfolio is diversified, like you also have investments in health care or consumer goods, then you have minimized your losses. The market is very volatile and unpredictable. Diversification is the only way to manage risk.

Diversification is also applicable to all kinds of investments from real estate to businesses. For example, you invested all your money in a restaurant chain. And that restaurant closed down because of the lockdown. Another example is what you invested all your money on real estate rental properties. And because of the pandemic, the tenants all left leaving you with no income. And worse, you still have to pay mortgages for the properties. With diversification, all these scenarios could have been prevented. Always remember to not put all your eggs in one basket.

5. Having People and Healthy Relationships

Ever since the outbreak, most people have been spending their time at home. This is the perfect opportunity to spend more time with family and loved ones. It is ideal for those people who have healthy relationships with people close to them. But what about those people who have not so good relationships with their family? Being trapped at home for months with people that you cannot stand and fight with can be a nightmare.

It is the same thing for people who live alone because they don’t have living social interactions with others. In a study done by Martina Luchetti from the Florida State University College of Medicine, they found out that living alone increase the feelings of loneliness.

6. Respecting Other’s Personal Space

Respecting other people’s space is one thing that we normally taken for granted. With Covid-19, we learned how to respect other people’s space. When someone goes near us, we feel uncomfortable. In the same way that they feel uncomfortable too if we get near them. That’s why we become conscious of our space and other people’s space.

7.Having Goals and A Routine

Having daily goals and a routine is good for your mental health. Goals will give you something to look forward to. Instead of dwelling on the uncertainties of the now, your focus shifts to a dream of a better tomorrow. A routine on the other hand is a good way to combat boredom. It is also an effective way to make you feel in control during times of great stress. It will keep you busy and takes your mind off things.

8. Importance of Gratitude

With all the negative things happening around, it is so easy to fall prey into negative thinking. Instead of reading the news or opening your social media account, why not start your day with gratitude. Gratitude shifts thinking away from the negative and into the positive. Instead, gratitude makes you focus on your blessings.

How about you? What lessons have you learned from this whole Covid experience?


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Posted by A.L. Jonas in Intellectual, 0 comments
Basics of Financial Literacy: What You Need to Know

Basics of Financial Literacy: What You Need to Know

Reading Time: 2 minutes

The world is now officially on a recession. Businesses went bankrupt and millions of people have lost their jobs. Many people found themselves in deep financial troubles. Although It is impossible to undo the events of the past, it is still possible to improve your financial future through financial literacy. What you need to know for now is the basics of financial literacy.

Whether we like it or not, money is a part of our daily lives. A basic understanding on how money works can help you make wise financial decisions in the future. It will help save you financially when the next big crisis comes. Thus, knowing the basics of financial literacy is a must. 

Start your financial literacy journey by reading some life-changing books on wealth and success. It will also help if you familiarize yourself with some basic terms on personal finance. Knowing some of the basic components on financial literacy is also is very important in your financial life.

Basics of Financial Literacy

1. Budgeting

Budgeting is a spending plan. It is allocating a certain amount of money for the things that you need and want. Though budgeting, you will be able to figure out if you have enough money to buy things that you want. It will also allow you to create a plan for your future spending. It is basically weighing in your income vis-a-vis your expenses and trying to create a balance between the two.

A good budgeting technique that you can follow is the money jar budgeting system. This approach allows you to be be able to meet both your needs and wants and at the same time, grow your wealth in the process.

2. Saving

Every financial guru stresses the importance of saving. Savings are the money that is set aside for future use especially during emergencies. It is common sense yet only a handful of people do it. That’s because saving money takes a lot of discipline. 

If there is one thing that this crisis taught us, it is the importance of saving. Those who have enough savings will be able to rise above this crisis. Aside from serving as your emergency fund, your savings can also give you freedom. You can use it as downpayment for your dream house. Your savings can also use to buy a new car or to travel to your dream destination. The possibilities are endless.

3. Understanding Debt

Not all debts are created equal. There are good debts and there are bad debts. Understanding what they are and how they differ from one another will help you make good financial decisions when it comes to handling debts.

Almost all people in the world will have to handle debt at one point in their lives, whether it be a mortgage, a car loan, a credit card debt or any other kind of personal loans. Debts can have positive or negative effects on everyone’s lives. Knowing the basics will help people use debts for their own advantage.

There is still a lot to learn but it is definitely worth the time and effort. For now, understanding the basics of financial literacy is a good start towards your journey to improving your financial life for the better.


Feature Image by Steve Buissinne from Pixabay Images

Posted by A.L. Jonas in Financial, 0 comments
The Money Jar Budgeting System

The Money Jar Budgeting System

Reading Time: 6 minutes

Do you want to grow your wealth? Then, the money jar budgeting system is for you. It is a system that helps you control your spending habits yet at the same time lets you grow your future wealth.

Most people dream of winning the lottery. However, did you know that according to several studies, 70% of lottery winners ended up broke within 5 years of winning? Similar studies also showed that the higher the amount of winnings, the higher the probability of getting bankrupt. 

Most lottery winners found themselves in even worse financial situation than before they became rich. So, where did it all go wrong? Lottery winners used the money they won to finance a bigger lifestyle. In short, they start to level up and increase their standards of living. They start to squander on depreciating assets such as luxury cars and extravagant vacations. They also start giving away so much money. This phenomenon is what you call a lifestyle creep.

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People who started receiving a large amount of money has the tendency to squander on extravagant lifestyle and depreciating assets like luxury cars.
Image Credit: LIFESTYLE CREEP

A lifestyle creep is a financial phenomenon wherein people suddenly find themselves with excess income and they are not prepared for it. They have no idea how to handle the excess money that they have. Suddenly, life seems more exciting and expensive. What used to be luxuries became necessities. Their spending increases as they begin to eat at fancy restaurants, own the latest gadgets, drive a brand new car and take more expensive vacations. The new spending habits then slowly develops into a lifestyle. It is creepy because the negative spending habits develop gradually and it is undetectable unless it is already a huge problem.  

Lifestyle creep is highly contagious. You can easily be influenced by the people around you, heightened by social media brought about by FOMO or fear of missing out. 

Unfortunately, it is experienced not just by lottery winners but also by people who received retirement and inheritance money, people who had just been promoted and those people who received an increase in salary. You have seen this happen to people around you and even possibly to yourself. 

Sadly, most people are not even aware that they are already victims of lifestyle creep. 

Does it mean that you have to continue living in the same standard as you were before even with an increase in income? Well, not really.

You can make lifestyle adjustments with an increase in income but there is a limit to it.

How to know the extent of allowable adjustments in lifestyle? The key is to have a spending plan or a budgeting technique. If you want to be wealthy, you need to set some financial goals. You need to make short-term sacrifices and stick to your money management system. You need to practice delayed gratification and opt to put your hard-earned income on investments first before spending them on liabilities. 

THE MONEY JAR SYSTEM

The money budgeting technique described below is actually a modified version of the Money Jar System, which was first introduced by T. Harv Eker, businessman and author of The Secrets of A Millionaire Mind. It is also an expanded version of the Abundance Formula (100=10-20-70) of best-selling author, entrepreneur and preacher Bo Sanchez.

The purpose of a budget system is for you to develop spending habits within your means and at the same time to lead you to future wealth and financial abundance.

It is called the Money Jar system because you can literally start by getting 6 jars and labeling them. In this budgeting technique, you need to divide your earned income into six (6) accounts:

1.  Give Account – 10%

As soon as you receive your income, your first expense should go to this account. You probably think that this is insane. Why do you need to give when you have barely enough to cover your expenses?

The purpose of giving is to put God FIRST in your life.

You need to acknowledge the fact that your gifts and talents all came from God. Giving or tithing is your way of saying thank you to God. More blessings will come your way if you learn to share your blessings. 

Do not give the excuse that you are going to start giving once your income increases. Giving is a state of mind. If you cannot let go of your 1,000 if you are earning 10,000, you will not be able to let go of your 100,000 if you are already earning 1 million. 

Why 10%? Several verses in the Bible talk about giving a tenth of your produce back to God.

Make an offering of 10%, a tithe, of all the produce which grows in your field year after year. – Deuteronomy 14:22

The give account can go to:

  •   Your church or spiritual community
  •   Your favorite charitable organisation
  •   A person in need
  •   As presents to relatives and friends on occasions

2.  Financial Freedom Account – 10%

Don’t you just want to wake up one morning wherein there is no need for you to go to work? You work only by choice and not because of necessity. Well, this account is your key.  It is your investment account. It is the most important account for the wealthy.


Financial freedom is the ability to live the lifestyle that you desire without having to work or rely on anyone else for money. – T. Harv Eker

Remember the story of the goose that lays the golden eggs? Well, this fund is your goose. Kill this fund and you kill your source of golden eggs. Do not commit the same mistake as the farmer. You shall NEVER EVER EVER spend this account.

Youtube Video from Anon Animation Ryhmes for Kids
 

Your financial freedom account can go to:

  • Stocks, Bonds or Funds
  • Business Investments
  • Real Estate Investments
  • Insurance

If you have debts, use this account to pay off all our debts first before you start investing. 

3.  Long Term Savings Account – 10%

This account is allotted for long term spending. This fund has the most flexibility because you can use it for anything in the future just in case you need it. It is your rainy day account or your emergency fund. It plays a major role in ensuring your long term financial success. Having money available when you need it can be a life saver.

Sample usage for your Long Term Savings Account:

  • Down payment for a house or a car
  • Your dream vacation
  • Hospital Expense
  • Tuition Fee Increase
  • House Repair
  • Your child’s birthday party

It is highly recommended that you set up a different savings account for this one. Set the account in such a way that it will be hard for you to withdraw money. For example, instead of an ATM account, open a passbook account. You can avail of an automatic save-up account being offered by banks.

4.  Education Account – 10%

You are your most valuable asset. You need to invest in yourself for you to grow. The more educated you are, the more career options you have. Read books. Attend seminars. Develop your gifts and talents.

It was said that this is one of the difference between the wealthy and poor. The poor people have big TVs while the rich have big libraries. That is because wealthy people put emphasis on continuous learning. In fact, about 88% of the wealthy read for at least 30 minutes each day for personal growth or for career development as opposed to only 2% of the poor.

Success is something that you attract, by the person you become. – Jim Rohn

5.  Play Account – 10%

This will probably be your favorite account – the FUN account. It is an account to spend however you want. Use this fund to pamper yourself. Get a massage. Eat at a plush restaurant. Go to a weekend getaway.  Watch a movie or a concert. Buy that latest gadget. You are allowed to shop until you blow this money away. A small indulgence can have a big psychological impact on your money morale.

So, if you want that expensive bag, sports car or luxury vacation, save up for it or increase your income first until it can fit in your 10% budget.

6.  Necessities Account – 50%

This account is for your everyday expenses. Included in this account are your bills, electricity, food, rent or mortgage, transportation, utilities, etc. If you cannot survive on 50%, that means you are living beyond your means. That is a clear signal that you need to simplify your lifestyle.

Follow this system and you will find yourself gradually increasing your wealth. It is going to be hard the first few years but it is all worth it.


First published in Pinoy Smart Living on 01.15.2019

Feature Image by Posted by A.L. Jonas in Financial, 0 comments