Sunday, October 28, 2007

Where does your salary go?

Getting ahead in terms of finances doesn't necessarily mean that you have to have a fat paycheck. Having lesser salary than your friends who've managed to save is not an excuse for not saving at all. This week i have been blog hopping around to see where Filipinas mostly put their money on, many are disappointed that all their salaries seem to disappear at once.

Here's a rough estimate of our top expenditures:

1. Food - you may think food is cheap but with all the tempting cafes sprouting about and posh restaurants that promise a better eating environment, we can't help but pay more to enjoy more. A hectic working day sometimes really deserve a fancy dinner to get you going.

2. Trinkets/Accessories - because we love mall hopping, we also don't want to leave empty handed. This is the next money vacuum out there. It includes bracelets, cellphone accessories, hair accessories, and beauty products.

3. Clothes and shoes - need i say more?

4. Family - empowered women serve as breadwinners to some families and they continue to help out their parents with bills, hospital expenses, etc.

The list goes on but I can only manage to write until the fourth one. How do we get around these expenses? Maybe, we should put ourselves in number one. Paying yourself first, no matter how small, think P100 pesos for every week, is not a bad idea.

Also, the next time you go to the mall, have a list of things YOU NEED to buy. Better, send your sister to buy it for you instead so you won't arrive with more than you need.

When it comes to food, we are actually paying for the right to eat in a certain environment, quiet, with the right blend of people, and maybe some music. How about scheduling a once a week dinner with friends? Just to avoid spur of the moment dinners and you can also look forward to this day when a stressful one hits you on the head. Tip: always look at the bottom of the menu if service charge and vat are included/excluded.

Family is always our priority, explore options of putting up a small business for your parents so they can depend on a regular stream of income, no matter how small it is, it will help.

Try this: On your next payday, try to list down EVERYTHING that you spend. from there you will discover useless purchases that you can scrap out soon so you can end up having more.

Saturday, October 13, 2007

Some weekend discoveries on how to increase blog traffic

It's a long weekend and what's better to do than surf and learn from internet almighty? I have been tweaking and submitting this young blog to directories in the hopes of getting more audience. Last week, i was very ecstatic that Pinay Money Maker ranks first for the keywords pinay and money in Google. I know it's not that great an achievement but it's encouraging!

Who doesn't want more blog traffic and earn at the same time? Try submitting your blogs to these directories so you can up your searchability:

Top Finance blogs

Directory of Finance Blogs

I also found out about BlogRush today. When you sign up, your blog will be displayed across similar blogs across cyberspace. You'll have to install their widget in your blog. Click here BlogRush to sign up.

Pinay Money Maker was declined haha because it doesn't have enough posts yet :(

Friday, October 12, 2007

A video on how to get out of debt faster

I still encounter many pinays who are problematic about their debts. It's like a gloomy cloud that never leaves the top of their heads. You can get out of debt, believe me! I've been a credit card addict before and it's my goal to lessen your debts too! Just focus and don't get hypnotized by shopping.

Here's a video i found that may help:

Thursday, October 11, 2007

Mutual Fund Basics

Aside from time deposits, where else can you earn higher interest rates? It's time to learn a thing or two about Mutual Funds. The concept is simple, you and a group of other investors pool in your money together and a fund manager from a mutual fund company/bank will be the one to invest all your money in various securities like bonds and stocks.

It's like having an expert decide where your money should be invested. This also addresses the problem of not having too much to invest because the minimums here can reach as low as Php 5,000. It won't be a problem because there are other investors like you who contribute to the investments.

There are four types of mutual funds which are:

1. Stock or Equity Funds
2. Money Market Funds
3. Balanced Funds
4. Bond Funds

The risks and gains vary depending on the type of fund you choose. You can gain from both interests and dividends in mutual funds. Remember that you can win or lose in mutual funds. The money that you won't use for around 2 years is the best amount to put in a mutual fund.

If you are interested or want to learn more, try asking your bank about their mutual funds.

This link may also help:
They have FAQs section that is easy to understand and they are a mutual fund company as well.

I haven't invested in mutual funds but i think we should act fast because time is ultra precious when it comes to investments! :)

Monday, October 8, 2007

Chinabank Saving Opportunities

I just opened a normal ATM account in Chinabank two months ago. From my fellows, i learned that they have an online banking system which really works. There you can check your balances and pay bills. As i was surfing their website, I saw several saving opportunities that can earn savers like you and me higher interest rates.

You can check their website and click on savings. I am keen on opening a Diamond Savings which is just like time deposit but it's called another name. The interest rate is around 4% for 3 months but my mom, who is an accountant says that its per year.

Here is the chart from their website:

Diamond Savings

Get better value for your savings with the Diamond Savings Account - a special deposit account that earns interest comparable to investment rates.

Key Benefits

Initial Placement Requirement P 50,000
Amount in Peso Interest Rate
1 Month 2 Months 3 Months
50,000 – 199,999 3.500% 3.750% 4.000%
200,000 – 499,999 3.750% 4.000% 4.250%
500,000 – 999,999 4.000% 4.250% 4.500%
1 Million & Up 4.250% 4.500% 4.750%

(subject to 20% withholding tax)
Effective October 5, 2007

I am not really sure so I am going there with my mom sometime this week. This will be my first time to open such account and I hope this experience will shed some light on us soon.

Friday, October 5, 2007

The Good and Bad about Credit Cards

Nowadays it's easy as pie to get credit cards. Go malling and you'll find agents handing out application forms and approving accounts within a week or so. They'll even text you to remind about your application and requirements.

Are credit cards a good thing? My answer is, that the answer lies on the hands of the card holder.

The Good

Credit cards are heroes when it comes to emergencies. Not shopping emergencies but when you find yourself short of cash for gasoline, food, or bills. Hospitals accept credit cards and somehow, a credit card becomes a status symbol of sort. Like a golden ticket to restaurants and other establishments. But with the onset of easy applications and approval, i doubt if this still holds true. Another plus is credit cards let some people manage their expenses more because they are logically presented in the bills. Installment payments are also enabled by credit cards and sometimes, it's 0.00% interest! You can get that laptop without having to evacuate the entire wallet.

In short, credit card gives the holder flexible terms and security in times of money shortage. It organizes their expenses and for some, the cash outlay will be more controlled because you'll only cash out once a month. It's also a bit safer to carry a card instead of cash.


And this i'll tell from experience. I shall coin this the "doubling effect". When you have a credit card and you are an impulse buyer, i suggest getting a pair of scissors and cut the card in the middle. Credit cards may make you feel like you have two times the money. Imagine, you can buy this on credit and you can buy that with your cash on hand. This is mostly the case of poor credit card victims.

When the bill arrives, you won't be able to pay the entire balance because you already exhausted your cash on hand. And here is where the interest ball starts rolling. 3% may seem small but when you pay 3% every month and it adds and adds up to the debt, it becomes a financial strain.

What to do

Personally, i suggest not getting a credit card at all if only for personal reasons. If you already have one, prevent yourself from swiping it for petty purchases wherein you can simply use cash. Paying cash hurts more than swiping a credit card, wouldn't you agree? and by using real money you realize that it is a real expense.

Credit cards are good to use for major and planned purchases like gadgets, appliances, or intangible services that are PLANNED. Especially with installment terms. Just make sure you already have the money to cover everything before buying. Simply use the credit card to give you an extension and flexibility in cash outlay.

I could ramble all day about credit cards but I guess these are the major points all of us, including me, need to remember. I've already trashed my credit cards since last year. Even when they tried running after me and give me new ones, i decisively declined. From then on I cured myself of the doubling effect and started saving more.

Monday, October 1, 2007

Employee, Entrepreneur, or somewhere in between?

At some point in a woman's life, she'll ponder whether she'd want to become a full time employee or an entrepreneur. I've a lot of friends, relatives, and including myself wrecking our brains out on what we'd like to become.

Most people today are directed towards becoming an entrepreneur. However, many just get frustrated because they realize that they lack capital and the drive, and the training to run a business. if you are a normal person earning a normal wage, deciding to venture into a business is as risky as getting into a lion's cage. If you fail, all the money you've saved up are gone and eaten by oblivion.

Being an employee forever may not sound too good too! So what plan should we have then? Why not try being an in between? Being in-between will raise a lot of eyebrows but this is worth a smart try.

The easiest way perhaps to earn money is by becoming an employee. The first step in venturing into a business is looping in capital. So by becoming an employee, you are somewhat preparing for your own business in the future (entrepreneurship). Believe me, imagining a business and planning one without sufficient fund is a waste of time and energy. When one has enough money, this is the time when you have the power to make more decisions as choices are wider when you have fat fundings. Just like when you go shopping, when you have more money, your choices are broader. you won't end up having the same bag like all the girls out there and when it comes to business, you'll have more choices than just putting up a cellphone loading station when the entire neighborhood has the same business.

To rub the point further, it's best to save first than venture into small, shaky, risky, energy-eating mainstream businesses but instead, do the selection when you have gained enough funds to make better decisions. Always remember to have a back up savings in case your business does not win and you do this by saving more of your salary.

Finally when you've gained enough savings/funds to select a business. I advice that you don't quit your job first, test the water and see if your business can really feed you forever. In this case, one foot is in being an employee and the other foot is in entrepreneurship. This is just a theory I'd like to share, really and again, it may not work for you. By being two at the same time, you gain first-hand experience and this is the best situation to decide which one you'd rather become. What ifs are diminished because there you are now and things are much clearer to examine. There are still lots of angles and loop holes BUT i'll make sure we discuss those too, soon :)

To answer the future question of what the writer is, i am an employee saving money to gain more choices and make wiser decisions in the future.