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.
The trick is to take a good look at your life, a second look if need be, and identify the luxuries you can live without.
Sure, this may feel like it can cramp your style, so balance enjoyment and frugality well. But whatever you do, never fail to squeeze as much out of every peso because you just didn’t know any better.
If you must spend, spend because you deserve it and you have budgeted for it. Too many of us complain and worry about our financial position in life – and then turn around to buy a chocolate bar almost without thinking.
October 21st, 2007 at 3:02 pm
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!
July 27th, 2007 at 6:18 pm
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.
June 3rd, 2007 at 8:09 am
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.
June 2nd, 2007 at 2:06 am
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.
June 1st, 2007 at 2:21 pm
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!