Are You Part of the Sandwich Generation?
The photo above may look yummy, but once you get behind the metaphor it isn’t so appealing anymore.
What is the sandwich generation? Basically it’s the people who are financially caring for their retired parents while they are also financially providing for their children. In other words, they are financially “sandwiched” between two generations that can’t provide for themselves. It’s a relatively new term, which just made its way to the Merriam-Webster Dictionary in 2006. Though the term originated in the US, it’s a common phenomenon here as well.
But how does this happen?
Read More5 Things You Can Do to Save an Extra P1,000 or More This Month
It’s a new month again, which means that it’s a new opportunity for you to find other ways to save money. If you don’t know where you can get extra money for your savings, check out these five tips and see if they apply to you:
Have a daily quota for using cellphone credits. If you find yourself calling and texting often, exercise a bit of discrimination when sending out messages. Avoid sending out forwarded messages the entire month. My cousin once asked me to be honest about how much I load my cellphone each week, expecting that I’d tell him a large amount. He was shocked to find out that I usually just spend P30 per month, and I almost never spend more than P90.
While I understand that there are some professionals that may find this difficult, at least try to cut back on using your cellphone for texting or calling friends and relatives. Opt for free ways to communicate instead, such as via instant messaging, landline-to-landline calls, Facebook, or email. (Of course, this isn’t applicable if you don’t have easy access to the internet, or if you need to call long distance.)
Don’t buy new clothes this month. Unless your house was accidentally set on fire or your clothes were stolen as you left them hanging out on the clothesline, don’t buy any new clothes this month. I know quite a few people whose monthly income is mostly spent on clothes shopping, and as they tell me they can’t find any money to save, I just want to slap my forehead in disappointment. Just eliminate shopping for clothes or shoes this month. It won’t kill you, I promise.
Discontinue newspaper and magazine subscriptions. I don’t subscribe to any newspapers, mostly because I just read them online. The Philippine Daily Inquirer, The Philippine Star, and The Manila Times all have online editions. Apart from the subscription savings, you’ll also have access to breaking news, and you won’t have old newspapers cluttering up your house.
I also don’t subscribe to magazines, but this doesn’t mean I won’t buy the occasional magazine that catches my eye. I just happen to be very choosy and I make sure that the content and value that I get from the magazine won’t be found for free elsewhere.
Cut dining and drinking out by half. If you find yourself going out often, such as more than once a week, cut this by half. This includes going out for coffee or lunch during the regular workday. Brew your own coffee or pack your own lunch instead. If friends invite you out and you don’t want to let them down, try my suggestions for making a gimik more affordable.
Automatically send at least P500 to your savings account as soon as you receive your paycheck. It’s wise to keep a separate account for your savings, apart from your payroll account (as I’ve mentioned in a previous post). By setting aside your savings as soon as you receive your income, you have a lower chance of spending it.
Do you have additional money saving tips? Please share them in the comments.
Image by asterisco from sxc.hu
Read MoreWhat are you doing with your extra cash this Christmas?
I’m receiving a sizable amount of unexpected income this month. Almost like a freelancer’s 13th month pay. This isn’t unusual during Christmas, where people get paid more, businesses generally have more income, and students receive money as gifts from their ninongs and ninangs. This extra money you receive is called “a windfall”.
What exactly is a windfall? A windfall is an unexpected extra amount of income or business revenue. Some examples include: inheritance payouts, Christmas bonuses, extra revenue, cash winnings, and cash gifts (the ones from relatives, not illegal ones form Malacanang hehe).
Although windfalls are common during the Christmas season, they also happen in other months during the year. Anything you receive above your average income may be considered a windfall, if the money has not been budgeted yet.
What to do with a windfall 
Most people spend windfalls by buying treating themselves or taking out their friends and family to lunch. While nothing is wrong with rewarding yourself, leaving the rewards unchecked or unmonitored often means the money will disappear sooner than you think. This is why I always have a plan for windfalls.
In case of unexpected extra income (which I usually have each month, since my income is not set in stone), I always have a hierarchical game plan on what to do with my extra money. Here’s where I stash them (in order):
- Fund for house in the farm.
- Fund for repairing my mother’s house.
- Retirement fund.
- Emergency fund.
- Travel fund.
How I divide the money into those 5 funds depends on how much my windfall is. If it’s only P5,000 or below, I usually put all of it in Fund #1, or I divide it between Fund #1 and Fund #2.
You can also do the same thing, set up a list of 3 to 5 things where you can put the windfall. Make sure your list is in order so you would know what to prioritize. Keep this list handy – whether in your budget notebook or as a file in your computer – so that you can easily refer to it before the temptation to splurge sets in. Don’t worry, you can always include “Personal Reward” in your list of windfall funds so you can enjoy that extra money a bit. Just make sure that your entire windfall doesn’t go there.
It may seem like I’m too disciplined or I’m not rewarding myself enough, but that’s not the case. Having the farm house built as early as possible will be a great reward for me. I prefer to live in the farm and have some place to retreat to when things are going too crazy in the city. It’s really all about setting your priorities based on the things you want to do and the dreams you want to fulfill.
Will you be receiving extra money this Christmas? What will you do with it?
Read More5 Ways to Make Saving Less Painful
Saving comes easy for some, but it’s an impossible task for others. When I ask some friends about their savings, they sometimes cringe or tell me “I don’t want to think about that!” as if I asked them about a life-threatening disease.
The act of saving doesn’t have to be difficult or painful. If done right, saving can be a wonderful thing you can look forward to each month. A few years ago, I didn’t really take saving seriously, but after implementing some techniques, it’s something I now look forward to with each paycheck.
So how can we make saving easier to do?
Automate it. Most banks will allow you to automate your payroll account to deposit monthly to a savings account. Check with your bank to see if you can do this with your payroll account. Saving can be much easier if you don’t have to remind yourself to do it regularly.
Focus on the benefits. I’m currently saving up to buy a house within the next 2 years. Of course, the way to motivate myself is to think about that house, which I’ll consider as my sanctuary. I also think of the pride of home ownership and the beauty of living in the province. This makes me wants to say “Yes! I absolutely want to put money into that dream every month!”
However, other types of savings such as for an emergency fund or a retirement fund tend to be harder. Maybe because their purpose and benefits still seem a bit abstract. For these types of savings that you aren’t particularly fond of, focus on the feeling of security you’ll have when these savings are in order. From my experience, it feels great not to worry about losing my job or getting sick because I know my emergency fund is there to catch me when financial problems arise. Plus, I just feel so free not being pressured to work super hard. That feeling of freedom and security, I wouldn’t trade for the world.
Have a mantra. During tough financial times where I was forced to live paycheck to paycheck, I used to have a mantra that I would recite in my head every time I was tempted to spend on something frivolous. My mantra was “Every time I spend on a short term want, I give up a part of a long term dream.”
Get visual. It’s also more encouraging to save if you can actually see what’s going to happen when you accomplish your saving goals. For example, if you really want to save up for a trip to Paris, you can cut up pictures of France from a magazine and place them in an area you’ll look at regularly – whether it’s on your office desk or by your bed.
Note: The visualization doesn’t work for everybody, especially those who forget that action is needed to make things happen. Some get stuck in the visualization without doing anything about it. In those cases, it’s not visualization – it’s mere daydreaming.
Reward yourself. Break down your savings goals into milestones and have a reward for each milestone you reach. For example, if you want to save P100,000 in your emergency fund, you can reward yourself for every P5,000 or P10,000 you successfully stash away for it.
Rewards are important because you won’t feel too bogged down or tired, thinking that all you do with your money is save it. Without rewards, it’s easier to fall back on old spending habits when you get too tired of saving.
How much do you save each month? What do you do to make it easier for yourself?
Read MoreOnly 1 out of 10 Filipinos save up for retirement
A recent financial IQ survey by Citibank shows some frightening results about the average Filipino’s financial well-being. According to the survey, only 1 out of 10 respondents have saved up for retirement.
only one out of 10 Filipinos is consciously saving up for retirement. The rest have some savings but don’t know if it will be enough, others have no idea at all on how much they need or have not started planning. – Agustin Davalos, retail bank director of Citibank Phils.
Personally, I’m not surprised by this. I went to my bank a few months ago and asked one of the tellers what my investment options were for my retirement savings (they’re currently in a time deposit, but I wanted to move them elsewhere with bigger returns). Her reaction? She laughed at me. She said that I was only 24 and should not be thinking about my retirement. Many people have reacted the same way.
They can laugh, but I know the facts. When I retire, I’ll probably be enjoying a nice vacation in Fiji while these people wait for “allowance” given to them by their kids, who are working full time by then.
If you’re young, the best time to save for retirement is NOW. Compound interest is your friend, people! Plus, if you’ve got a retirement savings fund when you’re 20, you have more chances to “play with it” and put it in riskier investments because you still have decades of savings ahead of you. But if you’re 50 years old, you can’t do the same because retirement is only some years ahead.
A more concrete example: my mother only started saving up for retirement 3 years ago. She’s 52. I also started saving up for retirement at roughly the same time. If we both retire at 65, she only has 13 working years left, while I have 41 years. Since I saved for my retirement earlier than she did, I will have more money to support myself then.
Odds are, I might even be supporting her to make up for the money she hasn’t saved. I do not want to do that to my kids. I do not want them to worry about my financial needs when they already have enough to worry about on their own. Because odds are, my children will need to support their own families and their own dreams. I do not want to stifle them financially. I do not want them to lead anything less than the lives they want and dream of.
If you’re not planning on having kids, or if that seems so distant to you, think about your own future. What kind of life do you want to lead when you retire? Do you think you have enough funds set aside for retirement?
Read MoreHelp Iligan and CDO
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