How to shop without feeling guilty

Your budgeting system is probably perfect. I only have great admiration for you if you can track your spending religiously and can put our expenses in little boxes that never overflow. I truly do.

But I have long discovered that a rigid budgeting system doesn’t work for me. I’m not a fan of painful budgets for the Duplito household. I wrote all about that in an earlier post. But I do know life will be miserable if I blow money monthly on each little whim. I need to find that sweet spot somewhere between responsibilities and fun.

I discovered this sweet spot is all about giving myself guilt-free money. This is how this plan will go. Let’s say I earn P100,000 on a book project. Let’s say the gods have seen fit to give me a new project to work on this year on top of my very cool project called MoneySmarts. I ask myself, what portion of that amount can I spend without feeling guilty?

I would say P5,000 would be alright. (What can I say? I want to be cheap, just like Pinoy Investor, eh? The way he said it with so much pride inspired me!) Am I feeling good about my money and all those countless nights working on the manuscript? You bet I do!

After enjoying that warm rush of excitement, I put the P95,000 in my investment portfolio, or add it to my emergency plan, or use it to pay down debt and save on interest, or whatever financial decision makes the most sense.

Then I will bring hubby and the kids to spend the P5,000 on gum, candy, kikay kits or nifty software and anti-hacking books for hubby. The idea is to spend it crazily and enjoy it! No need to account for it.

I have a feeling that will make some people queasy, but here are some of the arguments for this kind of strategy.

1. It makes me want to have another book project even if I have to work 48 hours a day with cranky people.
2. This way, I feel like *I* control my money, not letting money (and a rigid budget) control me.
3. It takes the sting out of saving and investing or paying down debt. I’m still responsible, but I also enjoy what I make. Sounds like a recipe for success.
4. It protects me from the danger of splurging. As I’ve often said, when I feel deprived all the time, I’m vulnerable to splurging money and this has happened many, many times. This keeps the spending at a manageable level.

This post was inspired by an email from a very good friend who reacted on my earlier post about ignoring bonuses and salary increases.

“ei, earth to salve have some ice cream to celebrate
the promotion… i’m sure it won’t make a big
difference in the retirement money.. it will be worth
the fun! haha! bad influence ba?”

So What Chocnut

Headlines today you shouldn’t miss:

Pressure seen to upset market this week. Asian and US markets particularly will be interesting. Some investors take cover and duck during tough times, but the really good ones make money. That’s what I noticed during rough spells in the local markets anyway.

World Bank urges RP to plug leaks, not levy taxes. We all need a breathing spell from taxes. The reality in the Philippines is that salaried individuals carry the brunt of the tax burden. The guys at the Department of Finance know that, and believe me they are not ogres. They want a better, less-taxed life for everyone. But government, Finance officials most especially, are pressured to deliver the “acceptable” amount of revenues. Unfortuanately, some officials in its bureau — the BIR of course — are not. Taxing the salaried guy is the fastest and most convenient way, and even the World Bank gives positive reinforcement whenever the government reports higher revenues and lesser budget deficits. When something like this statement comes along from international financial institutions, I hope it’s not just talk.

Mining poised for takeoff, but old woes persist As far as I know, the fund I invested in does not own shares in mining companies. Some investors still think investing in mining is speculative play. But I have been following news recently, and it is obvious this industry will be quite a major player in the near future. You think funds should change their position on mining? Hope to hear your thoughts.

SMC prepares to issue 1.5B preferred shares San Miguel Corp., despite all the issues hounding its ownership, is a blue chip. That term refers to well-established and financially sound companies that paid good dividends historically whether the market turns north or south.

Land Bank remittance business expanding Last week, the Bangko Sentral ng Pilipinas said the cost of sending money home is declining. Makes sense to look into other products out there to compare cost.

How to invest in a Philippine index fund
by Joseph James Lago
RFP’s Lago gives sound advice to an INQUIRER.net reader who doesn’t want to pick stocks. She just wants to invest in an index fund. Remember, however, that for a fund to mirror the index’ return, it has to earn higher than the index because of tax issues.

What clear investment objectives can do for your portfolio
by Dr. Johnny Noet Ravalo
Investment objectives are not just boring, academic requirements. You need clear-cut objectives to help you reach your goals. Ravalo says why and as usual, he is right on the money.

The high cost of education
It’s tuition time and a lot of households are hard-hit this time of the year. Education is becoming very expensive and sad to say that the public schools that offer good options are too few. This article gives parents a chance to do better on their education planning for next year. Don’t miss this article.

Ingenious savings plan for urban poor in QC
Mayor SB Belmonte shows a lot of heart in this article, or his PR managers do. I don’t think that’s something to be ashamed of hehe. His savings plan involves a “house-shaped piggy bank” for Quezon City dwellers. If they drop P57 daily, they will get a better chance at having a home of their own they can be proud of.

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