The following article is a guest post by Jun Sanchez, a Frugal Pinoy reader. If you want to send in your own guest post, use the contact form to submit your ideas.

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Written by: Jun Sanchez

I’m a middle-aged man who was born to a lower middle class family. Although our parents worked very hard, they never earned enough to attain the kind of financial security that many hard working people do. They may not have been successful in making a lot of money, but to me, they are peerless when it comes to making the most of what we had.

Ever since I can remember, my father always reminded me and my sister of the importance of stewardship. This is the most important money lesson I learned from my father; he always told us:

“Whenever we buy something, whether it’s a big ticket item or not, take very good care of it because if we ruin or lose it, chances are, we may never be able to buy another one again.”

Long married and with kids, looking back, I am certain that I have imbibed this credo. Though, obviously we have replaced our TV sets and other household items more than once since my boyhood, most of our belongings outlasted their life expectancy simply because we took very good care of them.

I have a 12-year old stereo that still works almost as well as when I bought it. I’m typing this blog on a personal computer that, many say, has already seen the light days. I own a nine year old car that my friends say looks more pristine than many cars half its age. I can go on but I think I have already made my point.

Although my father never finished high school, I think he unknowingly taught us a very important lesson in Economics, the concept of Opportunity Cost. As defined, opportunity cost is the value or benefit a person foregoes (I’d rather use forfeits) for making a certain economic decision (in many cases, it’s the decision to buy something).

Money, being a scarce resource, always presents us with a challenge on how we should use it.

For example, if a lady spends her money today to buy, let’s say, a new cell phone, she can no longer spend that money to buy a pair of shoes and a handbag. She forfeited the shoes and handbag for choosing the cell phone.

If later, she’s still intent on buying the shoes and handbag that she forfeited in order to buy the cell phone, it’s either she focuses on earning and save for a month or two or… sell (or forfeit) her cell phone as a secondhand unit to buy the shoes and bag.

You see, buying doesn’t only mean acquiring, it has a downside: it also entails forfeiting!

Before spending, especially on something I can probably live without, I always remind myself that money spent, is money gone, and often, I decide against it. Economists love to say that “you can’t eat your cake and keep it too.”

But what if you live by the credo that my father taught us? What if you take care of your essential possessions to make them last twice or even just 1/4 longer than their life expectancy?…

Spending will be delayed at least… avoided at best. And you will have money either to save, pay off debts, invest, acquire other assets or pay off essentials like your kids’ tuition. Otherwise, you will have to forfeit all these options if, say, you are scrambling to save for a new TV set because the one you had lasted only three years when you could have used it for five or six years if you just took good care of it.

Take very good care of your possessions and you will minimize the cycle of spending and forfeiting.

Remember that in creating wealth, earning well is just half of the equation. Need I say more what the other half is?

Image by Vivek Chugh from sxc.hu

Why don’t you just enjoy your money?

This is something people ask me when they hear about my frugality. Whenever I hear this, it seems like people have the following misconceptions:

• that I deprive myself from enjoying life,
• that I always choose the cheapest products,
• and that I can’t pay for the things I want.

The thing is, I do enjoy my money. I get to spend my money on hobbies like carpentry, gardening, model airplanes, and art. I also have the money to travel for more than a week at a time, and to splurge on ingredients for culinary experiments here at home.

Still, I consider myself frugal because I try to get a bargain whenever I can, and I shop wisely. I also know that if I had zero income (and had no emergency fund), I can support myself and the 4 people living in my house for under P10,000/month. But obviously this doesn’t mean I’m not having fun.

Frugality is about achieving balance between your enjoyment of the present and the security of your future. It’s about ensuring that you can afford financial emergencies, retirement, and big purchases such as a house or a car. In other words, you have to prioritize.

What I’m actually doing is saving on the things that are less important to me and channeling them to my hobbies, travel expenses, emergency fund, and retirement fund. Here are some ways that I practice my frugality:

• I buy only food items which I know I’m going to use.
• I only dine out when necessary.
• I don’t buy signature clothing.
• I don’t call or text more than I have to. (Also, I don’t buy expensive cellphones.)

In other words, spend less whenever you can and don’t spend on something that isn’t important to you, or something you don’t need. If you’re not a photography buff, why spend P20,000 buying a new camera? If you only have two children and don’t plan on having more, why buy a 5-bedroom house?
Another way to be frugal without destroying your “fun” is to trim extra expenses rather than eliminate them completely.

If you find that your coffee habit is costing you over P1,000 pesos a month, you don’t have to quit cold turkey. You can cut back on one cup a week, then two, until you find the number of cups you can drink which allows you to get a caffeine without overdoing it. In fact, you might want to try brewing your own coffee at home, if you have the time. These things may seem like a sacrifice, but it’s nothing compared to quitting your fun habits completely.

You don’t have to give up the things that you enjoy or that make you happy. After all, your hobbies, favorite food, activities, and trips should be a source of enjoyment and not a source of financial stress.

Of course, I’m not telling you what to do. I’m just demonstrating that yes, it is possible to enjoy your hard-earned money without sacrificing your financial independence and security. It’s up to you to find your own way of doing that.

How do you balance frugality with enjoyment? 

Image by Richard Sweet from sxc.hu

Around this time last year I wrote a post about some frugal Valentine’s day ideas. I pointed out that this day should be a day of relaxation and fun, instead of a stressful day where lovers are fussing about dinner reservations and expensive out of town trips.  Here were some of my suggestions:

• Cook a meal together.
• Handpick and arrange flowers yourself.
• Take a walk together.
• Watch DVDs.

To read the entire post, click here.

This year, I’m adding more tips to that list.  After all, given today’s economic climate, most people can’t afford to splurge on Valentine’s Day.  Here are some other frugal things you can do with that special someone:

Moonlit stroll.  This is an offshoot of my “take a walk together” suggestion.  The twist is that you drive somewhere peaceful with a romantic view, such as in Antipolo or Tagaytay, and take a walk at night.  You can end the stroll with a bottle of wine, or even a picnic.  I won’t be a full moon on the 14th, but it will still be bright nonetheless.

Have a DIY spa date.  You can both get a romantic spa date in the comfort of your own home.  Get your massage oils ready, light some scented candles, and play relaxing music.  Here are some additional resources that can help you out:

• Yummy body scrub recipes (you can use brown sugar and oatmeal with vegetable oil to make your own body scrub)
• How to massage (instructions)
• How to have your own spa day

Give a scrapbook or memory box.  Look for the mementos that are relevant to your relationship, such as old theater tickets, wrapping paper from your partner’s Christmas gift to you, etc.  Put these into a scrapbook, and be sure to include some photos.  If you don’t want the trouble of gluing things and laying them out, you can just look for a nice box and put all the mementos in there.  Feel free to include small chocolates and petals in the mix.

Go on a group date.  If you have other friends who have significant others, or if you’re single and want to go out with your other single friends, then you can go on a group date.  If done right, it will be cheaper than a one-on-one date, especially if the group orders dishes meant to be shared.

Do you have other frugal Valentine’s day suggestions?  Go ahead and share them in the comments section

Photo by G & A Scholiers

“Your site doesn’t apply to me.  I can’t use your advice.”  I hear this comment a lot, especially from friends and family.

It could be true.  The blog posts here at Frugal Pinoy may not apply to you, especially if you’re…

• feeling so secure in your finances that you know you can provide for yourself and your family even if you lose your job and have no income for 6 months,
• a multi-millionaire who wants to learn more about aggressive stock market investing rather than saving,
• or someone who thinks “I know all of this already!  In fact, I can write a book on it!” every time you see a new blog post here.

If you’re any of the above, congratulations!  You might not need this site.  In fact, feel free to contact me and send a guest article containing advice that other Frugal Pinoy readers could use.  (I’m serious about this.  Guest articles are welcome.  Just click here to send me a message via the contact form.)

But if you hear yourself saying or thinking the following lines, then this blog will definitely be beneficial to you:

• “I want to make more money.”
• “I need to get out of credit card debt.”
• “I hope to save more money so I can afford the things I want.”
• “I want to save more money so I can afford the things I need.”
• “I still accept financial help from friends and relatives.”
• “If I get laid off tomorrow, I won’t be able to pay for my living expenses until I get another job.”
• “I want to have the financial freedom to travel and pursue my passions.”
• “I’m spending too much on clothes/food/entertainment/etc.”
• “I want to retire early.”
• “I want to leave the rat race and start my own business.”

What is Frugal Pinoy really about?  Why is it relevant to the people who can relate with these statements?  In one sentence, Frugal Pinoy is a blog about defining financial freedom and the steps you need to take to get there. I’m willing to bet that almost anyone who is earning an income (or wants to) would benefit from defining the word “financial freedom” in their own terms, as well as take the steps to get to this freedom as soon as possible.

Personally, I want that financial freedom myself.  The good news is that I believe I’m on track to financial freedom, even with the economic downturn (in fact, I’m thriving).  If you want to be on this journey yourself, then you’re welcome to use the advice on this blog.

The best part? It doesn’t cost you any money. It doesn’t make me any money either*, so you know I’m not out to sell you multi-level marketing products and other scams.

That’s all This post just serves to remind both myself and the readers about what Frugal Pinoy is for.

If you want to receive Frugal Pinoy updates in your email, please click here and fill up the form. (It only takes 3 seconds.)

Happy Wednesday, everyone!

Photo by: Melodi T

* UPDATE: As of December 2009, I started using ads here at Frugal Pinoy to help support the maintenance of the site. But they are secondary to the content. I’ll always be putting the reader first.

“In the middle of difficulty lies opportunity.” – Albert Einstein

Almost the entire world is facing a financial crisis.  During times like these, it’s important to cut back on our spending and save for the future.  But is it possible to do that without sacrificing your enjoyment of life?

Leo Babauta’s new free ebook, “Thriving on Less: Simplifying in a Tough Economy” addresses the steps we have to take to lead more enriching lives – and save money in the process. A much needed message in tough economic times.

Here’s what you’ll learn from the ebook:

• How to create a simple lifestyle
• How to focus on “enough” instead of “more”
• How to beat the effects of advertising
• Steps on how to make small financial changes
• How to look at large, long term expenses
• Tips on how to change spending habits
• How to get out of debt

If you want to download a free copy of this ebook, simply click here.

When I was in grade school, my Home Economics teacher told us that buying in bulk is cheaper.  I used to believe her until my own experience proved otherwise.  When I started being savvy in the grocery, I noticed that items packaged in bulk aren’t always cheaper than buying them in smaller, regular sizes.  Plus, it’s not always the wisest decision to buy products in bulk.

Still, products sold in bulk are usually cheaper.  If you do it right, bulk buying can give you more opportunities to save.  Here are some basic tips:

Always do the math.  If you carry a cellphone with you at all times (you’re Pinoy, so you probably do), you have a calculator.  Use it.  Find out how much the product costs per unit (gram, mL, piece) for the regular packaging, and how much it costs per unit for the bulk packaging.

Here’s an example.  A 100 gram bar of soap costs P17.00.  When the same soap is sold in packs of 3, each pack costs P45.00.  Which is cheaper, the 90 gram bar or the 3-pack for P45.00?

If you multiply how much a single bar costs (P17.00) by the number of bars in a pack (3), you’ll find that buying 3 individual bars costs P51.00.  Since the 3-pack is only P45.00, buying it would be cheaper.

Be careful, though.  Some manufacturers decrease the per-item weight of products in bulk to make buyers think that they are getting things cheaper. In the soap example given above, make sure that each bar in the pack is also labeled 100 grams.  Sneaky manufacturers might use 90 gram bars in the bulk packages.

Don’t worry about the math-induced headaches you might get.  It’s likely that you only have to do it once for each product you want to buy in bulk.

Buy non-perishables. Items such as toilet paper, plastic bags, dishwashing liquid, and other non-perishables are okay to buy in bulk.  They won’t spoil easily and won’t be a hassle to store.

You can only safely buy perishables in bulk if you know how to preserve them, will consume them soon in large quantities (ex. if you’re having a party), or if you have assurance of the product’s quality.  I found this helpful guide on how to freeze different food items.  Worth looking into if you want to consider buying food in bulk.

Consider other factors that are important to you.  We’ve already mentioned quality.  If quality is important to you (and it should be), you need to take that into account before buying a product in bulk.  After all, it isn’t a frugal choice to buy toilet paper in bulk if it breaks away easily and doesn’t absorb too well.

Another factor you may want to consider is how environmentally friendly your bulk purchase is.  Sometimes, products that are packaged in bulk are prone to excessive packaging – there’s one big plastic bag wrapping the bulk of the product, individual plastic bags wrapping each item, etc.  If you think a certain bulk purchase is less environment-friendly than its regular equivalent, then don’t buy it in bulk.

Know where to buy.  Makro is a good place to start buying in bulk.  Their bulk products are usually cheaper, especially the generic ones such as Savepak and Aro.  I’ve already talked about the good quality of the Savepak dishwashing liquid, so it isn’t necessarily true that branded products are better.

You can also go straight to the manufacturer if you want to buy a product in large quantities.  In fact, you might get it cheaper there.

The next time you think you’re getting a great deal from a bulk purchase, stop for a minute, do the math, and consider if you really are getting a great deal.  My Home Economics teacher was mostly right.  Buying in bulk can be a great money saver, but only if you do it well.

Photo Credit: Image from Luis Rock  from stock.xchng

Staycation is the new buzzword, probably because of the rising cost of gas.  Generally, it means staying in your own home or in your own hometown during a vacation instead of going far away.  What can you do during a staycation?

Take a photo walk.  If you’re into photography, you’d be surprised how many photo opportunities there are in your neighborhood.  For example, here are some thumbnails of photos taken by my partner in our subdivision:

Just go around armed with a camera and explore the area and look at it with a fresh perspective.  You can easily turn the regular, mundane things you see into something extraordinary.

Eat someplace new.  Whether it’s a new turo-turo place in your area or a hole-in-the-wall coffee shop, there’s probably some place in your hometown where you haven’t eaten yet.  I have yet to explore all the restaurants and eateries in Marikina. Doing this instead of an out of town vacation will prove to be interesting and it will introduce you to new nearby favorites.

Make a great home-cooked meal.  Nothing beats a delicious gourmet meal you make yourself.  If you have some free time and you want to learn to cook new dishes, use your staycation as an opportunity to do this.

My favorite site for recipes is AllRecipes, especially since users are allowed to rate or comment on the recipes.  Here are some great, simple dishes you can try:

• Scott Ure’s Clams and Garlic
• Hot n’ Spicy Spareribs
  
• Marinated Grilled Shrimp
• Lemon Garlic Tilapia
• Spinach Tomato Linguine

You can also go to  SuperCook to find recipes for ingredients that you already have at home.

Visit the local parks, museums, and galleries.  Most cities in the Philippines have museums, art galleries, and parks.  To enjoy them, we just need to know where they are and what they have to offer.

If you want more ideas on what to do during your staycation, I recommend taking a look at these other articles:

• 5 Tips for a green staycation
•  List of staycation suggestions
• 7 Tips for a fantastic and frugal staycation

WiseBread is giving away a free downloadable ebook titled “Wise Bread’s Wise Driving Guide: 108 Tips to raise your fuel economy”.

The tips range from the simple (make fewer left turns, keep tires well inflated) to the advanced (hypermiling, drafting). Anyone who drives a car can benefit from these tips.

To download the ebook, go to the site and subscribe to it via email or RSS.

You won’t regret the subscription.  Apart from the fact that it’s free, their tips are always practical and useful.  I’ve been reading WiseBread since they started, and I’ve learned so much from their blog.

Image Source: WiseBread.com

With most meat and fish costing more than P100/kilo, I can’t help but ask myself if it’s cheaper to be a vegetarian.  Check out the prices from various markets/stores below:

Balintawak Market in Quezon City:

Tomatoes (1 kilo) – P25
Kalamansi (1 kilo, big size) – P20
Carrots (1 kilo) – P30
Potatoes (1 kilo) – P28
String beans (per super fat bunch) – P10
Lettuce (1 big head) – P15
Saba (biggest size) – P1.80 per piece
Coconut (biggest size) – P15
Squash (medium size) – P20 per piece
Pechay (1 kilo) – P20
Broccoli (per kilo) – P40
Pineapple (medium size) – P15
Source: MoneySmarts

At the Marikina market:

Eggplant – P50/kilo
Red onions – P82/kilo
Ampalaya – P80/kilo
Squash – P10/ large slice
Okra – P32/kilo
Broccoli (one large stem with leaves) – P 48
Potatoes – P 28/kilo
String Beans – P 20/kilo
Lettuce – P20-P28 per head or P60 per kilo

At Makro:

Eggplant – P49/kilo (for a 2 kg pack)
Cucumber – P39/kilo (for a 2kg pack)
Ampalaya – P72/kilo (for a 2kg pack)
Squash – P17/kilo (for 3kg and above)

What would make vegetarianism exponentially cheaper is that if you buy in bulk and store most of your purchases in a chest freezer.  But not all vegetables freeze well – especially those delicate veggies that have a lot of water.  For example, you shouldn’t freeze lettuce, cabbages, and other leafy veggies, tomatoes, and cucumbers.  I’ve found a very helpful page with instructions on how to freeze specific vegetables.  Here’s an excerpt on how to freeze eggplant:

 Cut into slices, sprinkle with salt and allow to stand 30 minutes. Drain off excess liquid and fry gently in butter or margarine until just tender. Cool and pack into plastic containers. Seal and label. Keeps up to 3 months.
(Source: Freezing Vegetables from Garden Guides)

Vegetable prices may be cheaper than meat, but there are some ways in which vegetarianism might actually cost more.  It especially depends on the types of vegetables you buy, among other things.

When is it more expensive to be a vegetarian?

• When you’re shopping for a household that can’t live without meat.  For example, a family of 5 where only 1 or 2 members will be vegetarian.  In this case, buying vegetables for the vegetarians and mostly meat for the omnivores will just add to the overall household expenses (and overall cooking hassle!).
• When you’re dining out.  Generally, vegetarian restaurants tend to be more expensive than their non-vegetarian counterparts (not always, but usually).  This is probably because they are seen as “specialty” restaurants.  However, if you eat a vegetarian dish in a regular restaurant, the veggie dish might be cheaper compared to the other meat-based meals they offer.

So, the answer to my question is: it depends.  If you’re simply feeding yourself or an entire household that is willing to make the switch, then it’s definitely cheaper, especially if you’re buying in bulk and freezing the vegetables.  In my case, I have yet to convince my entire household of 4 to switch completely, but I am making more vegetable purchases than usual.

Do you think it’s cheaper to be a vegetarian?  How much of your diet is made up of veggies?

In this blog, we’ve already defined frugality.  Basically, it’s getting the best value for your money.   Value could mean quality, saved time, and convenience.  In the end, you’ll be the judge of that value.

But after defining frugality, I asked myself this question:

So what?

So what if I save money?  So what if I spend less on an item?  Does this make my life better?  Am I a smarter person because of it?  Am I being kuripot for the sake of being kuripot?

It’s probably time to talk about the reasons why I’m frugal in the first place.

I’m frugal because…

 … I want to save money to spend it elsewhere.  It’s true – I cut corners as much as possible so I can spend my money on other things.  This includes the following:

• Travel.  I want to travel as much as possible.  But doing so costs money.
• Hobbies.  I love to read, paint, and build model airplanes.
• Dreams.  Learning how to fly a plane is one of my dreams.  It’s also one of my dreams to build a house in the province.  Of course, if I’m going to turn my dreams into reality, I need to have the resources for them.
• Retirement.  Spending my old age relying on allowance from my kids and a measly pension terrifies me.  I want to live my later years as comfortably as possible.

To make these things happen, I need to spend money on them.  My frugality allows me to save thousands of pesos each month to reallocate into these 4 different things.  If I just bought groceries at the convenience store (expensive) and didn’t look for deals and bargains, I’d be able to spend less on these things I really, really want to spend on.

… I don’t think it’s logical to spend more than I have to for an item, unless convenience and time were a factor.  If I can buy an item for P30 at the same quality as buying it for P60, then why spend more?  It just doesn’t make sense to me, unless the 30-peso item is out of the way and hard to get to.

… I want to spend money on things I want without worrying. It’s okay to spend on big ticket items if you are truly passionate about them (like a technophile wanting an iPhone, or a coffee afficionado spending on exotic coffee beans).  However, what’s important is to plan for these things.  It would be very, very sad if the things you are passionate about (whether it’s iPhones or expensive coffee) will drive you into financial trouble. These things are meant to be enjoyed, not to make us more stressed worrying whether we have enough money left for bills.

So frugality is NOT about hoarding money and stashing it in a bank somewhere just to add to your net worth.  It’s about channeling your resources to things that are more worthy of your hard-earned money.  It’s about making independent decisions, and keeping yourself worry-free.

I may lose my job tomorrow, but my frugality has given me peace of mind.  It has also allowed me to step closer to my dreams.  This, my friends, is why I am frugal.

Why are you frugal?  What got you interested in frugality?