A grocery receipt is a thing of beauty. It shows all our angst and anguish, our hidden aspirations and frustrations :-). I certainly felt that way as I was thumbing through my two-feet-long grocery receipt and decided, then and there, to cross out items that I could live without.
A month later, sandwiched between tall shelves of SM Hypermarket, I was smiling smugly, feeling like a new person. Ha! I shaved off around P3,000 from my monthly food and toiletries budget. (Bow with a flourish).
If you or somebody you know is really hurting for cash NOW, why not consider trimming the fat off your budget. This is certainly not limited to grocery isles and will go a long way towards curbing that spending habit.
Here’s my list. Add some more!
- Baby furniture and baby gear. Parents are predictably in love with ‘Toys R Us.’ When we see our boy thumping plastic tumblers with a short stick, we want to go to the store and buy him a complete toy drum set. We watch our little girl draw her own paper dolls, and visions of Barbie immediately dance through our heads. Filipino parents can easily sink thousands of money into baby furniture and baby gear if given free rein. Spending P15,000 on a stroller is a slippery slope to P5,000 per Avent starter bottle set, to P6,000 for a “My First Wheels” motorbike that looks good enough to use on a real road. He doesn’t turn five and yet has P50,000 worth of spending in his name. That amount can be worth half a million by the time he enters college, if placed in an investment instrument that will yield at least six percent at current inflation rates.
- Second car. Like buying a home, buying a car is mostly an emotional exercise. I get it, I really do. The city is too crowded, time is too precious, and the children need protection from the smog. If the down payment is affordable, and monthly amortization is not that high, why not? What about maintenance costs that can run up to P75,000 per year for two family cars? That cost includes regular tune-ups, wheel replacements, registration costs, and all the other maintenance costs that few people actually anticipate in their spending plans. Think about that before you get behind those second set of wheels, baby.
- Home makeover. Whatever happened to do-it-yourself bead curtains, or family artwork for living room walls? America is in love with home makeovers and Filipinos, as usual, are following suit. Just doing one room can set you back at least P30,000 up to sky’s the limit. We all want to think of ourselves as people “with taste for the good life”, but acquiring the trappings of luxury and wealth do not really make us wealthy. In fact, this “taste for luxury” can actually keep us from enjoying real wealth in the future.
- Eating out regularly. In the Makati financial district, eating out for lunch can easily cost P250 per meal. That means P1,250 on a five-day work-week, P5,000 per month and P60,000 per annum. Invested every year for 30 years at a conservative six percent return, that’s a cool P5.3 million by retirement time. You can save that much just by taking lunch to work!
- Alcohol, gourmet coffee, cigarettes. Same argument. Annualize the cost of each drink, each pack of cigarettes and it can pay for a huge chunk of your child’s college education given around 10 years for compounding magic to work. Plus, this could save you from the huge cost of getting sick.
guilty ako sa #4!!! =`(
We live in the US, and we are contributing BIG TIME to global warming. So, I bring my "Filipino Style" conservation in the US: Hang clothes outside when it's sunny - most Americans dry their clothes in the dryer - what a waste! We have only one car and it's hybrid. We do a lot of carpooling, and use public transportation in the city. San Francisco has BART, street car, and MUNI buses, so we have a lot to choose from. It's also a small city that one can walk to his/her destination. Eat less and shed 30 extra pounds. I did it! We also consume fresh vegetables and fruits that are grown locally. It means that the produce do not travel far and use less fuel from the farm to the store. Buy products that have the least packaging. Bring a canvas bag (it's bayong or woven basket in the Philippines) when shopping for food. Stores like Trader Joes encourage people to bring their own reusable bags by giving prizes away when reusable bags are used...Less shopping for anything is best. It means less fuel and resources used to produce items from plastics to clothes.
I think the message here is live simply which the Filipino masses have been doing for years. Americans can learn from our "conservation" way of living.
Lena Garzon
addition to the list: 6. Cut-out on entertainment. Dont buy DVDs or video CDs. Many good movies are shown at the cable TV. You can even rent from legitimate rentals
Magazines!
I'm surprised that a lot are subscribing to different magazines that they don't even read! One of my friends actually subscribe to two different baby magazines, plus others! I think most info in those magazines are accessible in the internet... so why load up on paper?
I plead guilty to #4 and #5
Well and good! But I also suggest y'all read "Rich Dad, Poor Dad" by Robert Kiyosaki. Instead of living below your means, live within your means and then increase your means! That's more proactive.
Living cheaply when you can live abundantly doesn't make you any better than the average.
Cutback on cellphone usage! Use those text/call credits wisely!
If you're on prepaid, make those credits last for the entirety of the valid period (2months). Those unlimited text promos are just marketing ploys to drain your credits faster. Funny to see people scrimping on their lunch yet still able to buy a prepaid card.
If you're on post paid, stick to your plan.
I have friends who still make "telebabad" using their cellphones then see their bills balloon up to 5 digits. I think there is an option to set a limit once the allotted credits are exceeded.
Finally, resist the urge to own the latest phone everytime. I think only 20% of a phone's features are actually used anyway. Purchasing a discounted phone via post paid plan only ties you up to a 2year contract and more credits than you actually need.
Sadly, I have learned all of the above the hard way. I hope this helps.
here's another one i would like to add to the list:
6. cosmetics! ladies, aren't we all guilty of being suckered into buying personal care and cosmetic products that we don't really need? how many times have we purchased a bottle of scented lotion or fruity lip gloss as a pick-me-upper on a bad day? better yet, check your bathroom and count how many bottles of shampoo and body scrubs you have in the shower. what about half used lipsticks and eyeshadow palettes in your cosmetic case? next time you wonder where your money went, look at your kikay kit....that will answer your question.
my advice is to buy good quality products and be sure to finish them first before you buy a next tube or bottle. stick to the moisturizer brand or the lip gloss color that works for you.
This topic is actually a mirror image of an earlier discussion on "when scrimping is not a good idea"!
http://www.inquirerbloggers.net/moneysmarts/2007/04/28/when-scrimping-is-not-a-good-idea/
So far it means you shouldn't scrimp on:
1. Education
2. Insurance
3. Health care
4. Vacation
... but we can cut corners on:
1. Baby furniture
2. Second car
3. Home makeover
4. Eating out regularly
5. Alcohol, cafes, cigarettes
Interesting, no?
Wasting food is wasting money also so I make it a point to cook just enough to avoid leftovers. Wasting our time also costs money.
When buying a product or service I always consider quality, functionality and usefulness, ease of use, frequency of use, warranty and convenience.
The articles about personal financial freedom and management don't make any sense since no matter how much you scrimp and save just to to have comfortable money for future retirement, education etc..it won't always be enough since we live in a third world country where salaries of laborers and professionals are insultingly very low when local prices of basic commodities like food, electricity, tech-gadgets, hospitalization, education is almost the same and even more expensive (like electricity and tech gadgets, credit card interest rates) compared with the United States.
I had work training in Ohio last Feb-Mar and I learned how easy financial life in the United States. Your items 1-5 which are considered expensive items in the Philippines are very affordable in first world countries, as long as one has a stable 40 hour a week job.
In line with the peso purchasing power and salaries of Filipinos, allow me cite the following:
Item 1: Prices of baby gadgets and grocer items, vitamis, etc..are more expensive in the Phils than the United
States when most of the items we buy here are imported.
Item 2: Prices of first owned cars are the same as in the US, while second hand cars in the Phils are suprisingly very costly compared with US when the quality of second hand cars in the Phils are not good. A 2000 second hand ford lynx is just about less $3k+ in the US when it is still about $6k+ in the Phils. Also, gas is also more expensive in the Phils.
Item 3: Home make over is not applicable and practical in the Phils. It is an American big suburban home country living concept of a good life that Filipinos emulate when Filipinos are constrained to small and cramped housing unthinkable by Westerners as well as the Phil electricity cost the most expensive in Asia.
Item 4: Why would you deprive yourself eating out regularly for good food when you and your loved ones deserve it even weekly! Eating out for fine dining is really expensive in the Phils even for professionals when everyone in the United States who has a job are able to enjoy often.
Item 5: Private college education in the Phils is increasing rapidly and the tuition is now almost the same as small colleges in the United States. Likewise, cost of getting sick in the Phils is already burdensome when prices of medicines is the most expensive in the world.
All in all, the unproductive economic system combined with corrupt financial system is what making life hard in the Phils.
hi analyst, sorry if i don't just turn over and die because i live in a third world country. I'd rather fight and take my chances. There are a lot of success stories that your macro figures don't really capture. Does that mean they aren't real? Are you saying we all don't have a fighting chance because we live in the Philippines? I try to keep an open mind about anything I read. It was a pastime for me to read until my eyes burned the works of renowned economists like Stiglitz. I studied closely the actions and philosophies of Medalla, Monsod, Habito, Ravalo, Neri, Estanislao, Canlas and many many more. Some of them would take time off from their busy schedules to teach a rookie reporter at the end of the day a thing or two about economics. They taught me a lot of good things. But the economics training I took in AIM, World Bank-sponsored trainings in other countries etc. and interactions with other so-called economists and analysts made me believe that sometimes, economists who are mere technicians and who know how to crunch numbers can sometimes be caught up in their Potemkin villages so removed from the reality of life.
Granted, these success stories may in the minority, but that doesn't mean other people who really want it cant get it. This negative thinking is exactly what I sought out to remove in MoneySmarts, by getting people to understand that together, and with the right information, it can be done.
Sigh. If only this country understands what it does have, and not just mourn what it does not have. I guess I should get off my soapbox now. We may not agree, but we can agree to disagree. Peace.
Analyst,
I want to congratulate you for having a work training in Ohio last Feb-Mar. I do hope you can get a regular job there and would stay there for a long time. Your little exposure of American air made you more American than anyone else in Ohio. SO I say go live there and leave us alone here and never come back. And we will try to rebuild this country, with 6.9% growth we will show the world we can do more, we can reach 7, 8, 9, 10 percent growth. Because we believe we can attain economic freedom without leaving. We can achieve financial freedom without going abroad. We are optimistic. And when we reach the glorious day of our country, I still hope you can swim from debt on your credit cards, expensive cars, and make-over houses there in the US!
Money is what is important to survived in this world. You have to earned it since there is no free lunch out there. As the saying goes " When I was young, I thought that money was the most important thing in the world. Now that I'm old, I know that...it is." Earning it is the easiest part, spending it is hardest. Making it grow is easy, keeping it is more harder!
lena, i should bring your comment here to my latest blog post hehe. these are great ideas!
diego, boy do i agree. everytime i do "spring cleaning" Filipino-style, i always marvel at how many CDs i have accumulated!
pches, my problem with this is i like curling up with The Economist, Forbes and Fortune and some other magazines whenever I have some extra time. Its kinda hard to imagine curling up in bed with the PC or laptop hehe. But yeah, I do get your point.
mikoy, my frustrations with cellular companies go a long way back. I have a blackberry and the charges are nowhere near the advertised rates. Its hard to budget when you dont know how much the company will be charging you and how they come up with these computations.
sunshine, cosmetics? you tell me. I still have several tubes of lipstick from a few years ago. Die lipstick die! There's a lesson here for us gals :)
hachiko, great catch on the mirror image! hehe
nina, I used to make my maids buy from Balintawak many years ago because I thought I could save more because the food items there are so cheap. Until I realized that I was throwing out a lot of food because they would rot in the refrigerator. Now I save a lot more by shopping smarter, just buying food that the family needs.
PBF, spending is required to keep the economy afloat. If people didn't eat out, restaurants would go out of business. If they don't buy baby toys, stores that sell them fold, factories that make them shut down...you get the idea. The key here is balance, spend less than what you make.
Hi salve! i had discovered your blog only a few months back. and i had been hooked since. as i am going through the archive today, and read this entry i think you hit a bullseye in my personal financial status.
sometime last month, i wrote a blog about how i intend to cut-down on my expenses because i realized that i could actually build on my savings, pay off my credit card bills and invest in the near future.
i used to buy every single day a tall cup of caramel macchiato on my way to work or sometimes, two cups.i did the math, and boy! am spending 3,750 a month just for coffee alone. that totals to a hefty P45,000 in a year's time!
it was difficult to give up because i love coffee but the thought keeps bugging me that should i have saved it instead of splurging on this non-essential i would be more liquid in the months to come.
perhaps, it is addiction of some sort that kept from starbucks. and so, i tried to trim it down to once a week only. i have a close friend in the office who checks on me. am like a member of the AA, i count the days that am "starbucks-free".
i see it as not depriving myself but just being sensible. and i actually havent given up on coffee. i just try to enjoy more my own brew or the ever reliable 3-in-1.
and oh lest i forget, on the next round of your money makeover, i'd like to take part also.
i used to incur so much in mobile phone bills especially when my ex-bf studied abroad. i had since broken up with him, and ironically the sky-high bills, too.
am working on paying my credit card debt and hope that by early next year i will be debt free. to do this, am thinking of moving to a less expensive place maybe an apartment rather than a condo unit to save more. currently, my cost of living sans food is 28% of my monthly earnings inclusive already of the rental subsidy from the company i work with.
moreover, i now just allot a certain amount for dining out with friends every month. i dont restrict myself to a once a week regimen since it takes away spontaneity. i just make sure that i dont exceed my budget.
as for makeup, i count myself lucky since i work for a beauty company, i get free product samples every month. however, i get distracted whenever i go to the malls especially when i see those eye candy cosmetic counters. but i try to restrain myself and i just think that i need to finish first what am currently using then, come back when i dont have anymore.
Hi Salve! I am checking out your blogs after reading the Sept.-Oct. issue of MoneySense. And I'm glad I did. It is nice to learn more locally since I can relate better. Since becoming a SAHM (stay-at-home mom) 3 years ago, I realised I was "devouring" information anything pertaining family finances left & right. I was definitely hooked! I started with stretcher.com (a US family newsletter) and this led to another. I still do religiously check this site's new issue every Monday night. I learned that my counterparts in the US have more problems than I do. I realised how their financial life became so wasted due to irresponsible use of credit. They may look rich from the outside but their saving percentage is very low, almost same as ours. That is why I can't help but sigh when reading one comment that concluded, after attending a seminar, that life in the US is better. I think Analyst should look around and ask more about their plight. Most of them are also living paycheck to paycheck. I get so overwhelmed when they start mentioning about their mortgages. And they're talking HUGE amounts. A lot of their financial advisers are even recommending going easy on their $3 daily latte fix to help improve their savings. I even came across with one contributor who recommended going to the Philippines for retirement! He cited that he is now living very comfortably because he has household help. He was inviting people to check it out. My neighbor from California likes it here too and is determined to live here for good. By the way, I am from Cebu City, so prices here especially food, are still kinder.
I now appreciate my hiatus from the corporate world after it dawned on me that I am now able to save 20% + fixed tithe. I never had this when I was still in the rat race. It was a race indeed. I am determined to fix our spending habit and put a decent budget system to work. I found that the envelope system works for me best. Though my tips to fellow readers are not that sophisticated, I hope you'll learn something out from it. These are things I found out during my quest:
1. Treat your leftovers with respect. It's a meal away from your next meal. Make sure that your help will not send this to the garbage. It's like throwing cold cash to the bin. Put them in the freezer not in the lower compartment left to stale. Make a menu from these. Clean your ref before hitting the supermarket and buy what's necessary.
2. Take your savings off immediately. After finding out your saving amount, take it to another account or else your pocket will find one for you. A lot have been said about this but the difference is in the doing. Do this for 3 months and it will become a habit.
3. Take inventory of what you have. This is the first thing I did the day after I resigned. I realised that along with my quest is clutter management. It opened a lot of things, of the things that I owned. It was hitting two birds with one stone. I was able to clean my house spic and span and stopped senseless shopping. Now whenever I buy something new, I take something out. If I purchase 2 blouses, two old ones are gone to charity or to friends who will appreciate it. I now embraced a replacement method when buying. I don't feel the itch anymore when I step in the mall.
4. Write it down. Put your budget, expenses, goals to writing. You'll appreciate it more since you will see it progressing and see where your weak spot is.
I hope to have contributed something useful. I am a work in progress and I hope to learn more from you, Salve. Thanks!
It is surprising that in America 4 people living in one house go to work in 4 different cars and here the whole family fits in perfectly in one car and thanks to the President for her innovative decision in introducing the hybrid cars to protect our environment. If you are not busy and have time, stop asking the gadgets, machines and appliances to do everything for you. We are blessed with two hands so we should try using those hands instead of using just the fingertips to press buttons :)
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I now appreciate my hiatus from the corporate world after it dawned on me that I am now able to save 20% + fixed tithe. I never had this when I was still in the rat race.
Best regards, Alex, CEO of download youtube videos
That cost includes regular tune-ups, wheel replacements, registration costs, and all the other maintenance costs that few people actually anticipate in their spending plans. Think about that before you get behind those second set of wheels, baby.
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