Day#19: Quit an expensive habit.
This is Day #19 of “25 Days to Healthier Finances”, a series of blog posts where Frugal Pinoy readers and myself work on 1 task a day to make our financial lives better. Please stay tuned for the next installment of this series, which will be up tomorrow. Here’s today’s installment:
Today’s Task: Quit an expensive habit.
We all have habits. Some of them are healthy while others can be destructive if we do them mindlessly. The truth is that some habits have negative consequences on our finances. While we can live with most of these consequences, there are some cases where we can’t afford them. Here are some examples:
- That (almost) daily morning coffee.
- Smoking.
- Going shopping as therapy.
- Sending forwarded text messages to your entire contact list multiple times a day.
- Dining out with family or friends during payday.
- Buying lunch from fast food chains rather than bringing your own lunch.
But how do you quit a habit? The first thing you should try is to figure out how much it’s costing you. How much do you spend on that habit per week? Per month? Per year?
After doing the math, find out if your income allows for this kind of expense. For example, when I was still a student, I noticed that I bought bottled water and other drinks each day during lunch. This cost me P30 per day, and since I was usually at school 6 times a week, this seemingly minor daily expense cost me at least P700/month. At that time I was probably earning only P9,000/month since I was just starting out as a freelance writer. I was also the breadwinner, which meant that the P700/month was more than I could afford for something as simple as water. Realizing this, I just brought my own bottle to school every day and refilled it at the water fountain.
If your expensive habit is something you can’t give up completely, then consider simply cutting back. Instead of the daily cup of coffee, why not reduce it to three times a week? Even this simple change can give you a lot of “extra” money which you can funnel into your savings, emergency fund, or an item that matters more to you.
What expensive habits do you have? Can you afford to have them?
Image by vivekchugh from sxc.hu
Read MoreDay#17: Know the things you don't care to spend on.
This is Day #17 of “25 Days to Healthier Finances”, a series of blog posts where Frugal Pinoy readers and myself work on 1 task a day to make our financial lives better. Please stay tuned for the next installment of this series, which will be up tomorrow. Here’s today’s installment:
When it comes to time and money, we usually focus on the things we have to do. Paying the bills, finishing up that report, cleaning the house. While these things are important, we should be equally mindful of the things we shouldn’t do.
Today’s Task: Know the things that you don’t care to spend on.
It’s simple. Just jot down the expenses that really don’t matter to you. Here’s a short list of some things that don’t matter to me:
- Dining out
- Watching most films in the cinema
- Clothes and accessories (as a side effect of rarely going out)
- Cable TV
Things that matter to me:
- Books
- Good quality of food
- Maintaining a solid but beautiful house
- Hobbies such as woodworking and gardening
What does this mean? By making the list of the things that don’t matter to you, you’ll know what expense traps to avoid. For example, why would I spend P500 to try out a new restaurant when I can use that money to buy high-quality ingredients for a home cooked meal? Or, why would I spend P200 to watch a movie in a mall dahil wala lang akong magawa, when I can usually buy 5 books with that at my favorite used books store? It’s like building a list of “not-priorities”.
You can also do this exercise for a major purchase so that you won’t be distracted. When buying a new car, this may be your list of not-priorities:
- Color
- Exterior design
- Quality of speakers
By making this list before you look at cars to buy, you won’t be distracted by the bells and whistles that don’t matter to you. You won’t go “Shit, panget pala gas mileage nito, nadistract ako sa sleek, chromed-up design.” Conversely, if the exterior design matters to you the most, you won’t be distracted by sales pitches about payment terms or storage space.
When we have limited resources, we need to know the things we can “sacrifice”, and the things we don’t care about should be the first to go. That way, we know that we’re left with the things that matter.
Read MoreDay#15: Carry only one credit card in your wallet.
This is Day #15 of “25 Days to Healthier Finances”, a series of blog posts where Frugal Pinoy readers and myself work on 1 task a day to make our financial lives better. Please stay tuned for the next installment of this series, which will be up tomorrow. Here’s today’s installment:
Impulsive spending is one of the more common reasons why some can’t seem to take hold of their finances. I only have to look at the blogs and Facebook/Twitter updates of my peers to see how impulsive spending is a common problem, especially among young people:
“Sweldo na naman! Kaso maauubos ko lang pambayad credit card
“
“Hirap magtipid! Hirap magipon! Dapat di nauso yang credit card na yan e!”
If these sentiments sound familiar to you, read on. If you’re one of those people without credit card debt, then congratulations! You don’t have to worry about this:
Today’s Task: Carry only one credit card in your wallet.
But it’s even better if you don’t carry one at all.
So that’s it, remove all your excess credit cards from your wallet and hide them under a drawer. Or cut them up. It all depends on how deep in debt you are and how desperate you are to get out of it. Don’t just do this for today, do it for as long as you can.
Here’s a bonus task: on your credit card, stick a post-it note that reminds you to use your card less. It could be any of the following:
- A reminder of what you’re saving up for, whether it’s a house, car, or even a “want” such as a gadget or a trip.
- A motivational quote that will discourage your from using your card impulsively. Some examples:
- “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.” – Will Smith
- “Every time you spend on a short term want, you lose part of a long term dream.” (I can’t remember where I got this.)
- Or just the word “Don’t” or “No!”.
This task may sound too simple or even cheesy, but if you find that it works for you, then it’s worth it. Personally, I don’t have a credit card – but I know myself well enough to predict that if I had one, I wouldn’t be as financially stable as I am today.
Image by LotusHead from sxc.hu
Read MoreDay#13: Start collecting loose change
Here’s today’s installment:
Today’s task is especially useful for those who can’t seem to save any money at all. If you’re already good at saving, maybe you can skip this task, but it’s still worth trying if you want to beef up your savings a bit. Since it’s a workday, I’m keeping it easy.
Today’s Task: Collect your loose change at the end of the day. Every day.
You don’t have to include the change you’ll need to pay your commuting fare to work the following day. Grab a large old jar/can and start collecting.
What for? Well, if you’re having a really hard time saving any money at all, now’s your chance for a simple solution. It may sound too simple, but maybe that’s what some of us need.
Once you fill the jar, you can convert it to bills (via sari-sari stores, any bills you have, etc.) then deposit it in your savings account. What you’ll use your savings for depends on you, but if you don’t have an emergency fund yet, you can start with that.
Day#12: Evaluate Subscriptions.
We are all subscribers. Whether it’s for cable TV, internet service, magazines, or gym memberships, there’s always that extra something that we regularly pay for each month. We often think we’re getting a good deal or that we’ve minimized our expenses – until we review our subscriptions. So that’s what we’re going to do today.
Today’s Task: Evaluate your subscriptions.
Here’s a list of subscriptions you may already have (including the ones I listed above):
- newspapers
- magazines
- cable TV
- cellphone service
- internet
- gym memberships
- video rental shops (I’m sure a few of you still have these)
- online subscriptions (to certain apps, online tools, etc.)
Note how much you are spending on these things each month, and add up these monthly expenses to see how much you spend each year. If you’re spending more than you’d like, maybe it’s time to trim down these expenses.
Trimming Down Your Subscriptions
If you suspect you can cut back on these expenses, here are some ways you can do it:
Look for free alternatives. With major newspapers and magazines publishing their content online, there’s rarely any reason to buy the printed version. When I was a working student trying to make ends meet, I saw that my mom’s newspapers subscriptions cost us P750/month. That may seem like a small amount to you, but for someone who’s trying to support a small household with a part-time income, that’s a lot of money. It seemed wasteful to subscribe to them when I can get the same content for free (and with no paper waste too).
As for cable TV, if you find that the shows you enjoy are also aired in free TV channels, why pay for them? Unless you need the late night reruns or the latest episodes (which the free channels also show), there’s hardly a need to subscribe. If you’re a PLDT DSL subscriber, check out WatchPad, which allows you to watch some cable channels for free (if your internet provider has a similar service, take advantage of it).
Look for cheaper plans/providers. Canvass for options that allow you to get the same service at a lower price.
Go a la carte. Ramit Sethi discusses this in his blog, IWillTeachYouToBeRich. Basically, instead of paying a flat fee per month, try to find a pay-as-you-go model. Here are some ways to implement this:
- Instead of using a postpaid cellphone subscription, use a prepaid one.
- Instead of paying for a monthly gym membership, pay every time you walk in. People tend to overestimate the number of times they go to the gym.
- Buy your favorite magazines only when the covers or table of contents truly interest you.
Remember: the point is not to eliminate subscriptions altogether. It’s to evaluate them and see if there are ways we can cut back or be mindful of these expenses.
Read MoreDay #5: Pick 2 No-Spending Days This Month
Here’s today’s installment:
Today’s Task: Pick 2 no-spending days this month
Look at your calendar. Pick two days, it doesn’t matter if they’re one week apart or if you pick two succeeding days. Then, label these days as your no-spending days. Write it down somewhere, preferably a desktop calendar or something that you look at every day. Then, commit to it.
Sure, it’s impossible to have absolutely no spending in one day. After all, we use electricity, food, and water daily. In this case, when we say “no spending” we mean no cash out. Don’t even charge your credit card.
But what about transportation? Well, you can either pick a day where you don’t have to go to work or run errands. Or find a way to get to your destination for free (carpool, walking, biking) – as long as it’s practical. Or you can simply aim to spend less on transportation that day (take the jeep instead of a taxi, etc.).
What about food? Cook. I’m amazed when I hear about people who are college graduates and have been employed for a while yet can’t cook anything. That’s a very, very basic skill that everyone needs to learn. It’s your nutritional intake, for crying out loud. Kahit pagsaing lang ng kanin o paglaga lang ng itlog. Don’t know how to do these things? Learn. Kaya nga may Google.
Why do this at all? It’s not just about lessening your expenses, it’s also about doing a practical experiment to see what you can cut back on. It’s easy to overlook spending on daily coffee, convenience foods, and other unnecessary daily expenses, then wonder where your paycheck went. By seeing how little you can spend on some days, you’ll have a more realistic idea about the expenses you can do without. Who knows, you might end up having one no-spending day each week.
Personally, I’m picking December 5 and December 7.
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