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.

Image by doctor-a 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.

I think it’s about time that I wrote an “introduction”post in this blog that gives readers an idea of my personal ideas about money, how I make my financial choices, etc. This might help some of you understand why I’ve written some posts the way I did and why I make certain choices. Please share with us your own personal story about money in the comments.

I don’t like money for money’s sake. Some people say “I want 100 million pesos!” or “I want to win the lotto!”, but when you ask them what they want to do with the money, they tell you they don’t know. Or they’ll buy the same standard set of things – a big house, some cars, etc.

When I make personal goals about money, I have to know what the money is for. I don’t believe in getting rich just to get rich and buying things just because they are uso or everyone has them. The money means something else for me. It might mean security, adventurous travel, and doing the things you want to do – not necessarily having the things you want to have and saying to yourself “Basta, yun ang gusto ko eh”.

See, most of the time, when we really reflect on why we want some things, we find that the real reason behind the want (or a part of it) is that we just want to keep up with others. Or for the cool factor. It’s okay to admit these things to yourself – I’m guilty of them sometimes. Just be aware of them.

However, at the same time, while I believe in making frugal choices, I still believe you should make the purchases that are important to you – even if the price tag seems a bit heavy. As long as you can afford it, of course. Frugality is different from being cheap. You should still be able to buy the things you enjoy.

An example: I always need to have some tea around. Although I have some inexpensive Jasmine Chrysanthemum Tea (Healthy Lifestyles, P15.00 for a small box of 10 teabags) my favorite tea in the world is the Twinnings Apple Cinnamon Tea, which is roughly P220+ for a box of 20 teabags). I love the Twinnings Tea. So I buy it.

In other words, for me, being frugal isn’t about living so well below your means that you don’t get to enjoy the things you really enjoy. It just means being mindful of where your money goes and the value you get for each purchase.

One final thing – I think wealth is relative. It all depends on what your values are and how much your time is worth.

For example, Juan Dela Cruz earns almost P1Million a year. However, he has to work almost 18 hours a day to earn it – sometimes even on weekends. I’m not impressed. That, to me isn’t wealth. I prefer a per hour measurement of income compared with how much income it takes for you to live the life you want. If you do the math, you’ll see that Juan only earns less than P200/hour.

For example, if Maria DelaCruz earns P1000 an hour, but only works 7 hours a week so she can spend her time with her kids – I think she’s wealthy. At the end of the year, she’s only made P336,00, but I think she’s still wealthier than Juan.

How about you? How do you define wealth and frugality? Please share your ideas with us.