WHILE ON a recent trip to Japan, I heard a story about an OFW driver who nearly wasted away his earnings. He worked in Japan for close to 30 years, and at one point was earning an equivalent of P400,000 a month with overtime pay. He had a wife and child back home in the Philippines and was able to send his child to school. However, he was always out drinking at bars in expensive Tokyo while having several relationships with other women. “Puro good time,” they say.

Well the guy wasn’t able to hold on to his job due to his drinking problem. His employer asked him to resign, and he was given an equivalent of P2 million as separation pay.

His Filipino friends could only shake their heads in disbelief at how he wasted away the opportunity to have a well-paying job, and how he was not able to save any money to make his life better. Last they heard, he was back home, bought himself a tricycle which he drives for a living, and is staying with his parents since he could not afford to buy a house of his own.

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IT’S Wednesday as I write this. These past two days, Monday and Tuesday, I saw my retainer fee for the month from a publishing company disappear–in just two days.

First, my desktop computer refused to do anything at all, and so I brought it to the computer shop. It turned out that the power supply is broken and the video card sympathized with it and broke down as well. Since the computer guys were tinkering with the CPU, my son and I figured we might as well add 1 gigabyte of RAM.

Then on Wednesday, it was time for the car to have its 40,000-kilometer check up. This does not come cheap, I realized, especially after I OK’d a rustproofing job, etc.

So there, a whole month’s work pay gone in two days. Why does money “evaporate” so fast?

Parents with school age children may be thinking along the same line at about this time of the year. With tuition fees the way they are now, it’s no joke to send one child to private school. And what now if there is more than one child?

I learned from a financial management talk I attended years ago, that one must prepare for annual expenses by saving for it monthly. Take tuition fees, for instance. See how much the annual fee is for next school year, divide the amount by 12, and begin saving that amount monthly this June. This can be done as well for other annual expenses: car registration fees, annual income taxes (for the self-employed), and insurance premiums. As for repairs and maintenance expenses, saving a little more for this purpose every month will cushion you from the shock of getting your repair bill in the future.

Preparing for big expenses this way will help you avoid panicking when it’s time to pay up. Save, save, save.-Karen Galarpe

PERSONAL finance experts encourage teaching one’s children how to handle money. It starts with letting them know how valuable it is, and what happens when they spend it or save it.

My parents never sat down with me to teach me about handling money. But from observing them through the years, I have learned valuable insights I practice up to now.

Here are the money lessons I learned from them:

1.  Money does not grow on trees. You have to work to have some. No work, no money. My parents got married a few years after the liberation. Times were hard. Since my dad’s earnings as a government clerk were not enough, he supplemented his income by becoming a security guard at night at the pier. And when this still wasn’t enough, he would borrow an uncle’s jeepney and drive it a couple of trips around Manila ferrying passengers. When he got back from driving the jeep, he earned enough to buy powdered milk for my kuya, who was then a baby. Hard work pays.

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By Karen Galarpe

With school out and the Holy Week break coming up, the usual question is, “Where will you be this Holy Week?” Or “What will you do this summer?”

Whether it’s to the beach, the mountains or the city you’re headed for (or staying put in), here are some ways to save money on your vacation as shared by frequent travelers:

1. Book and buy your plane tickets online. You may be able to get better rates online. And if you get the no-frills ticket (no meals, non-refundable, non-rebookable, with no check-in baggage), you will get even better rates. Cebu Pacific and Philippine Airlines offer special promos for those booking and buying their tickets online early.

2. Make a checklist of all things you need to bring. Don’t forget stuff like camera batteries, cellphone charger, an extra memory card, hat, sunblock, etcetera. These things may cost you more if you buy them at your destination.

3. Research on the places worth visiting in your destination. Plan your itinerary for each day to save on gas or transportation fare. It will also clue you in on where to eat, shop, get a massage, and so on at reasonable prices. Check out places you can get in for free, such as museums and art galleries, parks, etc.

4. Have enough cash with you and bring your credit card as well. It can be a hassle looking for an ATM when you’re in a remote place like the beach. Abroad, you may also get better foreign exchange rates by withdrawing local currency from your bank account using an ATM rather than having your money exchanged at the hotel. A credit card, on the other hand, will make it easier for you to make purchases and settle hotel bills.

5. Stay at a hotel that offers complimentary breakfast and free Internet access. This will save you a lot of pesos.

6. Bring snacks. Buying snacks at convenience stores will cost a lot more. And don’t raid the mini-ref in your hotel room. Good healthy snacks to bring include peanuts, trail mix, crackers, and cereal.

7. Buy pasalubong at the public market, rather than the mall or airport pasalubong counters. You’ll get the freshest stuff at the most affordable prices. In Baguio, strawberries and broccoli are best bought at the public market. In Cebu, head to the palengke for danggit and dried mangoes. Another plus: at public markets, you can bargain and make tawad.

8. Instead of patronizing the tourist-y places, go where the locals go and eat where they eat. Food in places frequented by locals are usually delicious and cheap.

9. Walk more instead of taking public transport. You’ll see more sights, put in some exercise time, and save money with just one effort.

10. Make sure your car is in tiptop condition. A flat tire, a conked engine, and an aircon running low on freon will not only inconvenience you; these will bore a hole in your pocket as well. Before you leave, check that your car is in good condition.

Have a great vacation!

Photo courtesy of Aladdin Cordero

I learned a few more things while preparing for my interview at ANC’s Shoptalk, as well during the show and would like to share them with you:

1. Use a budget. Makes you consciously think of what you put in your shopping carts. Write a shopping list.
2. If you must shop, go for frugal shopping hot spots. The psychological rewards of saying yes is the same whether you do it at Zara’s or Divisoria. (Read my previous post to to find a list of frugal shopping hotspots.)
3. Set aside a Christmas fund. In government finance, a sinking fund allows the government to set aside every month some money for future payments. We can do the same in our personal finances. A 12,000 budget for gifts and noche Buena every year for example will not be as heavy when you prepare for it by seting aside 1,000 a month from January to December.
4. Don’t forget the “hidden costs” of Christmas holidays, like contributions for company/church Christmas parties, Kris Kringles for children, etc.
5. The law of supply and demand in economics indicate that if you buy in January, you will get lower prices because demand is bound to drop. Not so, says Pia Hontiveros-Pagkalinawan, who is a self-confessed Divisoria shopper. She says apparently shop-owners have realized that children who get cash gifts during Christmas time go shopping in January!
6. Be a bulk customer: contact your company’s suppliers
7. Recycle gifts
8. Keep Christmas parties simple, go potluck!
9. Think of giving the gift of experience instead of toys
10. Don’t go overboard when buying toys. Some of the most expensive toys these days kill children’s imagination

Finances On The Edge Photo by DeadAir

For the purposes of analysis and policy-making, there is no escaping the pounding on the table and the endless debates on what caused this crisis, who is to blame, what could have been done to avoid it etc. etc. But at the end of the day, reducing all that talk to doable measures is a process that could end to be as convoluted as the shadow play that caused this crisis in the first place.

Personally, I would rather focus on things that we all can do—now—to deal with what’s happening. After all, crises are part of life, whether financial, emotional, relationship, spiritual. They will happen, again and again. Only the details will change, but the fact that they will railroad our lives and make us shift our priorities will not.

An excellent series in the Philippine Daily Inquirer has been showing readers how different households are dealing with the crisis. Some are moving to condo units near mass transit systems to reduce travel time and stress, some are really cutting down on expenses especially dinners outside the home—even if they are only trips to fast food places.

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The not-so-friendly bundle of grocery receipts have been winking at me for quite some time, so I finally got around to putting all the figures down into an Excel worksheet to make a Grocery Booklet—an exercise that reveal some pretty interesting lessons.

Here are some of those lessons:

From January to August, these items showed the biggest jump in prices:
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(Photo from Agence France-Presse)

Two of my girl friends and I went on a different kind of bonding trip recently. Off went our strappy sandals and on came our boots and sturdy walking shoes to check out fruits and vegetables in the Balintawak market in Quezon City.

Both Jenny Angoluan and Analy Pinaroc are busy moms with husbands and children who love vegetables and fruits, and with prices skyrocketing, the three of us thought it would be fun to see how the prices differ. Jenny’s husband waited two hours in the car for us, but loved the veggies.

Here’s the price list. Feast your eyes!
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Time flies by so fast. MoneySmarts quietly turned one last summer. To make the celebration really special, we are giving loyal readers first crack at limited seats for an interactive personal finance seminar.

Together with Citibank, which is celebrating its 100th Take Charge Of Your Money column for INQUIRER.net, and MoneySense magazine, we hope that this personal finance seminar will bring our discussions to a new level.

The promotions for this seminar is officially going to start Monday next week, but MoneySmarts readers who want to be there can email register (at) iluvlearning (dot) com beginning today.

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Could it be true? DZMM said this morning the number of cars that ply the EDSA route is down by 10 percent. Could it be that the age of carpooling and mass rail transit has finally arrived? With a P60 per liter price looming over everyone’s heads, Filipinos will be spending so much more on transportation, food and other necessities, leaving less money for everything else including big and new cars.

I dare predict that there will come a time when only men will be driving alone on EDSA during rush hour! (You know how men hate car pools. At least the men I know who hate what they call “small talk”). It’s nice too if Filipinos are cutting down on gimmick days, but hopefully not totally. I’m not too sure about the happiness index of hermits.

A Philippine Daily Inquirer editorial the other day pointed out that the rising oil and food prices have one unintended but good consequence: people are living simpler lives.

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