Later on this evening, you can catch me on Lucy Torres’ show, The Sweet Life (QTV 11), where we talked about how to live on a budget without going “losyang” as Lucy herself calls it.

It was an interesting evening when we taped the show, as I had a front row seat watching fashionistas talk about how they have fallen prey to the urge to splurge (but have since learned their lessons).

Giselle Sanchez, a schoolmate at UP Diliman, was as usual funny, smart and very much honest with her spending binges. She talked of how she ended up buying almost all of the bags in a Louis Vuitton shop in Italy (guess how much it cost her), because the snooty manager tried to boot her out of the store because he mistook her for a Filipina domestic helper. (You must watch the show to fully appreciate her effort—albeit costly—to defend Filipinas).
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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

Is there anything wrong with enjoying the spirit of the season that’s fast approaching? Of course not. We wouldn’t want people to think we are misers who are only concerned with the glint of money.

There is nothing wrong with enjoying what we earn. But therein is the key—the words “what we have already earned.” We should be enjoying in moderation past income with some set aside for the future. But Filipinos have to stop enjoying future income, future bonuses, future salary increases. After all, what if these don’t come in? Then we have to live with the reality of bounced checks in January or missed credit card payments when the new year rolls in.

Break the cycle by refusing to mindlessly spend. The psychology of spending is a topic that I have been studying for quite some time. Unless we face the deeper reasons why we get into debt come Christmas season—and even after—we cannot really get rid of these urges to splurge.

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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 by Din Cordero)

Personal Finance Reminder: avoid busting your budget by shopping early for Christmas.

Early birds get more time to look for bargains, more time to stretch artistic skills to create unique and personal  (and less expensive) gifts, and avoid overcharging credit cards and paying hefty fees.

Sometimes, the late birdies do get rewarded, because retailers have been known to cut down prices at the last minute. But would you like to fall prey to an “if?”

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I’m intrigued by the phrase “scrimp and save.” It sounds so crunchy and delicious when it actually connotes discipline and sacrifice. :-p

It made me think of how far people will go to save money. The genetic footprint, as well as cultural background, can impact this tendency greatly. For example, some people can skip lunch to save for something. Some can’t.

While interviewing Jocelyn Sta. Ana, Bank of the Philippine Island’s vice-president for retail mortgage division, for my article “Goodbye easy home loan terms?” published in the Philippine Daily Inquirer today, she shared this amazing story about a friend and gave me permission to share it with you.
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We’ve been talking about money, money, money and how we must make more and lose less. Why we should dig deep to know our money personality. Use that to create a strategy for saving more and saving smart. Count our change and use them. How we must agonize over how to grow our nest egg well enough to fund kids’ education and retirement.

I don’t know why but sometimes, being broke and happy sounds like a mystical, deserted, paradise beach where the wind and waves can sound as sweet as Pachelbel’s Canon in D.

Pinoy Penman, who confessed to an addiction to eBay, says he is broke but happy.

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At the press briefing for the 2nd Philippine International Motor Show held last Tuesday, automotive manufacturers promised to tell car buyers what they really need to know to “get all that jazz with less gas” and what they need to do to squeeze more mileage for every liter of gas or diesel.

Homer Maranan, executive director of The Chamber of Automotive Manufacturers of the Philippines (CAMPI) shared the following tips:

1. Buy smaller engine vehicles if your family is small
2. Go for diesel-powered cars. He says it is a misnomer to say that diesel is dirtier than gas (although some “insiders” swear by that.)
3. Avoid stop-and-go driving and sudden acceleration as much as possible as this uses more gas
4. Paying for proper and regular maintenance is more frugal in the long-term

Watch my video interview with Maranan with reporter Izah Morales.

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(Photo from Agence France-Presse)

The other day, I felt like crawling inside a cave and hiding for the rest of my life. Oh, for at least 10 minutes.

This news story that originated in San Francisco in the US the other day that said a basic flaw in the Internet could allow hackers to take over the web triggered all sorts of warning signals in my brain.

Major software and hardware makers worked in secret for months to create a software “patch” released on Tuesday to repair the problem, which is in the way computers are routed to web page addresses.

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