Wednesday, September 29, 2010

On Marriage and Finances

I am not yet married but it doesn’t mean I can’t make good advises when it comes to handling money for couples. I have seen many couples fight over money. And it is not a problem you can just shrug about.

Did you know that most annulments here and abroad are caused not by third parties but by problem on finances? Funny huh? But so true. Third parties are just the by-product of financial problems. Here is a classic example. Couple Ricky and Anna got married. They had clear visions and clear plans. They loved each other and adored one another. The romance went on for a couple of years. They had a great marriage life. Until one day Ricky had a problem at work and was fired. Anna took over the expenses hoping that Ricky could find another job the soonest time possible. But Ricky failed because of self esteem issue. So the stress of providing was carried on by Anna. After a year the wife complains and they argue. The woman nagged the husband and the husband found refuge from another woman.

To avoid having the same problem here are simple steps couples can follow on handling finances and have a lasting marriage.

Before getting married.

Couples should sit with a financial adviser regarding their future financial plans. The financial planner should be able to set the rules that is agreed upon by both parties (soon-to-be husband and wife).

Wedding expenses.

In this dialogue the couple should agree who pays what in the wedding. It is a common mistake for a groom not to talk about this issue. Be honest to your wife-to-be. Have a budget and spend according to your budget only. Do not overspend. Remember, the wedding is just 4-5 hours while the marriage is forever. Be practical in your own ways.

Retirement.

Retirement is not oftenly talked about before the marriage. This topic is oftenly on “come-what-may” basis. Have realistic goals when it comes to retirement and be supportive to each other to achieve this. You can either have a common account or separate accounts for this.

House.

It is ideal that the couple has a house already before getting hooked. But then again, downpayments and mortgages are too big for a man or a woman to shoulder alone. Agree on what type of house you want to have and on what type of community you want your children to grow. If possible, buy a house before having a child and pay it off the soonest.

Kids’ Education.

Prepare for the kids’ education early on. Do not rely on your salary-to-be. Of course parents want their children to have the best education there is but unfortunately only a few manage to prepare. Before the child is born, the college education should be in place already. Saving and investing a thousand every month fifteen years before college can be of great help when that time comes.

Longterm Healthcare.

This is commonly overlooked by the couples. They seem over confident that their medical expenses can be shouldered by their retirement fund. Unfortunately it wouldn’t. Retirement fund is different from longterm healthcare needs. They are somewhat similar but very much different.

Debt.

The wrong attitude: Your debt you pay. The right attitude: Your debt, we plan to pay and pay it off the soonest. Always extend a helping hand to your partner. Remember the vow, “for richer or poorer till death do you part.” Know the root cause why you are in debt and deal with it. Do not blame the person. Rather make the person realize that having debt can ruin a marriage and try avoiding it as much as possible.

Emergency Fund.

Anything can happen so better prepare for it. If you have separate emergency funds before getting married then well and good. It can be on separate accounts dependeing on what you agree upon. Please take note: giving birth to a child is NOT an emergency therefore the fund for this should not be taken from your emergency fund.


~till then

Tuesday, September 28, 2010

How I became a saver from being a spender?

I was 24 years old when I finally realized I am not saving enough for my future.
I read books and articles about saving money and apply it for quite some time but then I lose the drive whenever I see something from my favorite stores.

I was raised in a mindset that having branded things will make me look and feel good. There was even a part of my life that I compute everything I wear before leaving the house. I loved going to those "branded" shops. It made me feel good. Typical shopaholic huh! hehe. I realized I was like this when I attended a Christmas party and amazingly I can tell the brand and the price of the dresses of the ladies. I can even tell where to buy those items. hahaha...

A sad event made me realize that branded shoes, watches and dresses can't help me at times of emergency. That is why from then on, I promised myself I will save every peso I can and be financially independent before my 35th birthday.

Here are the small and big steps I took in order to achieve my goal.
1. I modified the way I think. Being rich is not equal to brands.
2. I freed myself from debt.
3. I save money regularly. I started small but I know I will end up BIG.
4. I have a clear goal in mind whenever I save.
5. I learn the art of investing money.
6. I changed my environment. I affiliated myself to a community that will help me reach my goal.
7. I freed my closet from the clutter I accumulated and start living simply.
8. I cancelled my gym membership.
9. I moved to a lesser expensive house.
10. I put up my own business.
11. I have a partner who helps me reach my short term and long term goals.

Now I am 25 years old and I am happy to say that I am now saving and investing regularly, I continuously build up my emergency fund, I already have my long term health care plan, I already have 4 mutual funds, I am into stock market also and I have a business of my own.


~till then

Things you should not buy brand new

Many people do not know that time and money have a deep relationship.

Time is gold, isn’t it? There is no time machine. It is just a fiction we see in movies and sci-fis. That is why we have “if only”. Value time because you can never bring it back. A time spent is a time lost.

Money is a tool we use in our day-to-day life. We use money to buy our food, rent/buy a house and buy clothings. We work hard for the money. We spend 8-12 hours (or more) working in the office/workplace just to have money. But never people will study how money works.

Why do we need to know how money works?

Because of the following.

Money does not get sick.

Money does not stop working.

Money does not complain.

Money does not go on vacation.

Money works 24 hours a day.

Money works even on holidays.

Money is loyal to its boss. (And the great part of it? The boss is YOU.)

Unfortunately, only few understand these facts.

I’ll give you an example. If paycheck comes, what comes to your mind first? Is it your savings/investments (I mean investments on mutual funds/stocks, insurance coverages, health coverages and emergency fund.) or the latest gadget/jacket/shoes/shirt/toy in the mall? One of the differences of the poor and the rich is the mindset. If you think first of the latest gadget, cool jacket, fancy shoes, trendy shirt or awsome toy then I am sorry to say but you have a poor mindset. You may have lots of money right now to buy those things but time will come you will lose every peso you have because you have not developed the value of saving and investing.

Here are some manifestations of a poor mindset.

If the paycheck comes, it’s a signal for them to spend.

They value comfort over success.

They want instant gratification.

They are afraid to take risk.

They think they know it all.

Question: Are you one of them?

Now, if you are NOT willing to take the plunge then stop reading. Otherwise continue.

I’ll give you a detailed discussion on how money works and how you can achieve your dream using this concept.

The Rule of 72.

The Rule of Compounding Interest or Rule of 72 is said to be the greatest mathematical discovery of all times. This was formulated by Albert Einstein. This rule simply shows us how long our money will double given a specified interest rate. 72 is a constant number divided by the interest rate will give the number of years the money will double.

If you have 100 thousand pesos in a bank right now, how long will it take your money to double itself? (Without you adding a single peso to that account.) Now here is the tricky part and I’ll try my very best to discuss it in the simplest way I can. Determine the interest rate of your bank. (As I write this article the interest rate of the bank is 0.75% - not considering tax) But let us simplify it. We will compute with 1% interest rate. Let us now divide 72 by 1. The answer will be 72, meaning it will take 72 years more before our money will double. If you are 25 years old right now and you have 100 thousand pesos in a bank right now then your money will be 200 thousand when you reach the age of 97. Apply it to any interest rate and you will have an idea of what I am saying.

For Example: At 4% interest rate per annum your money will double every 18 years.

If you are 29 years old right now and you have 100 thousand pesos in a facility earning 4% per annum your money will be 400 thousand when you reach 65.

What if you put your money in a facility which earns 8% per annum? Using the rule of 72, your money will double every 9 years. If you have 100 thousand right now, assuming you are 29 years old, your money will become 1.6M.

What if you know 12%? Then your 100 thousand will become 6.4M after 36 years.


~till then

Our 200 Peso-worth of Onions

One Saturday afternoon, when Paul and I were near a supermarket, I suddenly remembered that we do not have onions anymore. Without a fuss we went to the supermarket straight to the onion section and grabbed 2 packs. We were talking about dinner when we realized that we do not have butter and lemon for the dish that night. So we picked a bar of butter and 2 pieces of lemons and headed toward the counter. We will have a movie marathon that afternoon so we decided to pick up some snacks. We were amazed when we paid for our items. Our receipt read 200.30 pesos. We laughed while walking away from the grocery store. “How expensive the onions were.”, we exclaimed.

This only proves that if you do not plan for your purchases, the store will plan for you.



~till then

Saturday, September 25, 2010

PNKY


I was looking forward to see this place on our next visit to Baguio and I almost dragged Paul to accompany me.

We were so tired from our trip and will begin our endless meetings in about two hours and he just wants to stay in a place where he can rest.

He even asked me, "What are we supposed to see there?" And I replied, "A lot."

I was at the verge of getting mad when he said "Ok." Ha ha. That was a sweet victory.


PNKY is located at Leonard wood in front of the famous White House and very near 50's Diner.

The staff of PNKY were very accomodating. One staff led us to the showroom which is located at the second floor of the house. Everything in there was for sale. From the sofa to the paintings, chairs, tables, candle holders, cabinets up to the small decor had tag prices.

If only I had extra money that time I would buy a cute necklace or a wooden craft.

The bed and breakfast has 5 rooms. We were lucky to have a look at one of their rooms. I think staying here would be relaxing.

On the side of the bed and breakfast is the PNKY Cafe.

Lots and lots of colors here. The concept was very European and very unique. Of course everything you see is also for sale.

We just had our breakfast before going to PNKY so having a full meal is out of the question.
But i wanted to try something from this Cafe so I ordered ginger tea with lemon grass. The tea was made special because it was served with a small cup of honey. How lovely!

Enjoy some pictures we took during our brief stay at PNKY.

Hope to be back there soon.=)












~till then

Sunday, September 12, 2010

Staying Connected


I always want to be connected with friends and love ones. To do so, I have the following options: phone calls, short message sending, emails, online chat and social networking.


Our way of communicating to other people has changed drastically. When I was a kid I used to write letters to my friends. It would take days, weeks or even months before I can get a reply. Waiting is painful but I enjoyed it. For urgent messages telegram was used. Whenever we receive a telegram my heart trembled because I knew it was always bad news. Logic? Why would somebody send a message through a more expensive way when you can just send it through regular mail. I think telegrams were paid per word or per letter. I’m not really sure.


I was in third year high school when I had my first cellular phone. It was a two-liner black and white phone with a big antenna. It blinked green when the battery is still okay and it blinked red whenever it needs to be recharged. Sim cards were expensive then. it will cost you 500php if I am not mistaken. I was so happy I was one of the few students who had cellular phones then. When I graduated from high school I upgraded my phone to something slim without the big antenna and blinking light.


I went to college and there was the internet. I was never a “techie” person so it didn’t bother me not to have emails and stuff. My cellular phone was enough for me. After a few months there came a social networking site which allows anyone to connect to friends and love ones, exchange messages, upload photos and update profile status. Kudos to my hubby who made my email address I was able to connect through internet.


When I started working I can’t pass a week not to check my social networking site. I really loved browsing the updates of my friends. It made me connected.


Few years later I met a larger networking site. It has become an entity that I will not be shocked if someone would tell me it is involved in the stock market already.


This particular soial networking site has become so solid that most employers will look into the site of the applicants for background checking. So better be careful on the things that you post. The world is watching. As of today, it has become legal in many companies solely for information dissemination because almost everybody is connected.


I can't imagine what will happen next. What will be the next big thing. i just hope we are not exploiting anything with these technological advances.


Thursday, September 9, 2010

Dropping My Broadband Internet Connection


Having an internet connection at home gives anyone the power to be connected anytime of the day. But it also has some drawbacks. One, it consumes precious time. Instead of cooking my food I am stuck in my computer browsing and surfing. Instead of reading a book I’m stuck reading updates. Instead of having a good night sleep, I’m stuck chatting with friends. Two, it takes away cash from my pocket. I signed up for a broadband unlimited plan because I need it back then. Now that I don’t see the need anymore it takes a good amount in my expense budget.


I checked my expense sheet first before I decided to drop it. I am paying 800php a month for the connection. I used it for a good 8 months and it really served its purpose. Today I’m ready to be disconnected from the monthly bill.


I’ll let you see how I came to a decision.


If I continue my plan for the next 5 years I will be spending 9600 every year. That will be a good 48000php accumulated in the next 5 years. If I am going to invest 9600 every year for the next 5 years and project it 20 years thereafter compounded annually, it will amount to a whopping 658000php. Amazing how 27php per day can contribute to my portfolio 25 years from now.



Interest rate compounding annualy: 12%

Savings per Year

0.12

Total at the end of the year

9600

1152

10752

9600

2442

22794

9600

3887

36282

9600

5506

51387

9600

7318

68306


8197

76503


9180

85683


10282

95965


11516

107481


12898

120378


14445

134824


16179

151002


18120

169123


20295

189417


22730

212147


25458

237605


28513

266118


31934

298052


35766

333818


40058

373876


44865

418742


50249

468991


56279

525269


63032

588302


70596

658898



~Till then


Wednesday, September 8, 2010

Oh My Gulay!

(A Cool Baguio Experience)


It was our first time to eat at Oh My Gulay in Baguio City.

The restaurant was not familiar, I guess, because my hubby had to ask me twice where it was.


FYI: Oh My Gulay is located at the 5th floor of La Azotea Building along Session Road.

If you do not know La Azotea Bldg., it is on the left side of Session Road (coming from SM Baguio) beside Philam Building.


The restaurant was cool. The experience was great. And the dishes were delectable.




We ordered the Lumpia with salad, Pasta Puttanesca and the Chow Chow Noodles. They're really good.









Here are some pictures of our Oh My Gulay experience.

Try to visit the restaurant and experience fresh salads and pastas while chitchatting with friends and love ones.





Saturday, September 4, 2010

BenCab Museum Failed!



It was a sunny Monday morning. Paul and I decided to visit a secluded museum in Asin Road. We got up early and left the hotel around 9am and had a brunch at Soledad’s – a famous eatery beside Saint Louis University.


Around 10am we were bound to Bencab Museum. The address says it’s at Km 6 Asin Road. I was pretty sure that was far but I did not expect that the taxi driver would ask for an additional payment. That was not customary since Baguio taxi drivers were known to be very courteous. They will even give you your change up to the last cent. Nevertheless we agreed to pay additional 30Php for the ride. During our trip I silently agreed that we should really give the driver additional payment because it was far from the city and there was no possible passenger going back to the city because the people in Asin road opted for a jeepney ride instead of a taxi. (We rode a taxi because first we didn’t know where the jeepneys going to Asin Road were located and we were in a rush because we were set to meet someone in SM at 3pm.)


Upon arriving at the museum I noticed something was wrong. The door was closed. Nobody there but the security guard and an ice cream stick peddler. We alighted the taxi and proceded to the museum. When we asked the security guard he told us that the museum is closed on Mondays for day off. Bang! That’s where I failed in the planning! I forgot to check the schedule of the museum. To my dismay I sat on the stairs leading to the entrance and thought about Paul’s money wasted for nothing.


I asked the guard if he could open the museum for us. He told us he didn’t have the key of the museum. I pleaded and I even told him we were from Quezon City and we just want to see the artworks inside. He refused and told us, again, that he didn’t have the key of the museum. So we just took pictures of the fa├žade of the museum and sat at the entrance trying to regain our strength because there was a short walk before we could reach the jeepney waiting area going back to the city proper.


Maybe the guard felt sorry for us because after a few minutes he let us enter the museum garden through the guard entrance. And we saw a paradise created by an ingenious mind. We were given 20 minutes to explore the area but I begged for another 10 minutes. The guard was so kind and agreed.


Here are some pics we took during our short stay at the museum. We will be back next time to explore the artworks inside. We will just fix some schedules and itineraries.









~till then,



Thursday, September 2, 2010

Forest House


We were supposed to eat dinner at Oh My Gulay on our first night. Unfortunately Oh My Gulay closed early that Sunday evening.


Paul didn't have a choice but to dine with me at Forest House located along Loakan Road. As if I gave him other options. Ha ha!


There were a lot of restaurants in SM Baguio but we opted for something special. It was his first time in Baguio City after six months anyway.


We rode a taxi going to Forest House. It was already 8pm then and the weather condition made it hard for us to commute.


I love the place. The ambiance was homey. The waiters were accommodating. Even the tables were inviting.


I was supposed to take pictures of their souvenir shop but Paul said we should find a place to sit first. I never had the chance to take pictures of their cute souvenirs because we were seated far from the shop.


We were among the first few to dine here. I think only four tables were seated including ours earlier that night. When we finished our dinner I noticed that almost all of the tables were occupied.


We ordered the Forest House Bouillabaisse (Paul’s favorite), Sesame Crusted Fish Fillet and Forest House Salmon.


The experience and the food were g

reat. I never knew there’s a place like this in Baguio City. I’m so glad we had dinner here.


I will surely dine at Forest House again.



Here are some pictures from our Forest House experience.














~till then