Look back for the lesson, move forward for the future

Past is past and the only things that we can learn from it are the lessons. Anybody can forget the past but never forget the lesson. If you have done something wrong in the past then let it be. It’s time to make a conscious choice of living in the present and hoping for the future.

This is also true when it comes to finances. You may have lost a lot of money during your early years because you felt that having a lot of pretty knick-knacks are the things that will make you the “it” person of your times. You may have been a travel junkie and have visited all the 80 provinces in the Philippines and maybe a few outside the “perlas ng silanganan.” These dramas are okay because the fact that you are reading my blog about finances is a conscious realization that you want to change something in your finance now. J

As I’ve said, it’s time to move on. Make the right decisions today to improve your financial life and work towards financial stability. You cannot go back in time and collect every single centavo that you’ve spent. Acknowledge that you have done wrong and admit it. That will only be the time that you will start to accept the reality and move forward. First focus on how much you are making today and start saving small percentage of it – say 10%. Then increase as necessary. If you have built the habit of saving then create emergency fund and start looking for other (legit) high yielding funds. As long as your savings plan has a goal, you will surely end up with it sooner or later.

Happy saving and investing. J

Do you feel miserable when budgeting?

I have read so many blogs about budgeting having the common description as “necessary evil.”

It may seem to be that way but for people who are used to it see it as a need for the family finance to work smoothly. For me, budgeting should not hinder your personal satisfaction. Rather, see it as your guide in achieving your personal goals. If you really want the new gadget then budget your way to it. It also pays to be smart and reasonable when choosing your goals.

Make budgeting fun!

Budgeting can be FUN!

Why not make a dream board and put the pictures of your goal/s in it then make it a habit to track how much you have saved for it? Fun isn’t ist?:)

Budgeting can be EASY!

Budgeting is easy. My personal strategy is “Save first then never mind.” Let me clear this. What I mean to say is, I save first then make the remaining money enough for me until I get my next pay. For example, I want to buy a bike worth 6000Php. I’d like to buy it 3 months from now. So I will be computing how much I should be saving for the next 3 months to realize my dream.

6000 / 3 = 2000

That means I should budget my money such that 2000Php will be saved for my new bike for the next 3 months. Now here comes the adjustment. What if, I am only able to save 1500Php per month? Well, the sound response to this would be to delay my bike until I have come up with the money needed. Another option would be to assess how I spend my money and work it from there. Maybe I should just bring my own lunch instead of buying from the cafeteria. Or I should just commute for a few weeks to save on gas and put that savings on my bike fund. Or maybe I should not drink soda for the mean time and put the saved money to my goal.

Remember, little things add up. It’s just a matter of perspective.

This was I hope I made Budgeting Enjoyable.

Till next time. J

Saving Effectively: Pretend You are Paying for a House and Lot

If you have problems in saving money, here’s a tip: pretend you are paying for a house and lot or a car.

Many people are more effective when they are paying for a loan or a mortgage when saving money. It makes them more disciplined.

Applying it to the concept of saving money, pretend you have a mortgage amounting to 1M. This becomes your target savings. Then decide how many years to pay. Of course the longer the period you pay the smaller the monthly amortization but the higher the interest rate. Luckily in saving money the higher the interest rate the better.

Let’s pretend you don’t have any money to start with. But you plan to have a house and lot after 10 years. To start with you are required to give a down payment amounting to at least 10 percent payable within a year with no interest. Then the succeeding payments will be distributed over the remaining 9 year period at an interest rate of 6% (per annum).

Selling Price	1,000,000.00
Down Payment	100,000.00
Monthly Down Payment	8,333.33
Remaining Balance	900,000.00
Monthly Amortization	6,526.67

You may think that the computation is crazy because the monthly amortization is lower than what it should be. Actually it is. The difference of the monthly amortization presented to you by your real estate agent and my computation is their gain which translates to money working against you.

Now you can foresee that it is easy to accumulate one million Pesos in a matter of 10 years.

~Till then