If you asked me 2 years ago what I knew about money, I would say I was pretty much like Rebecca Black’s awkward friend in her music video for Friday.
I had an accountant who deposited my checks and reminded me when my taxes were due. All I had known was that my bank account would be replenished and I would have enough to spend on food, clothes, etc.
Can you believe that I used to spend for gas monthly that amounted to as much as my driver’s monthly salary?! I had a parking slot in my condominium in Eastwood but I would send my car and driver to mom’s house in Antipolo because that’s where he stayed-in. I didn’t realize I was wasting so much money until I complained about my expenses and Jim said that I was definitely overspending. It’s these things that add up to the reason why I wasted so much of my hard-earned money all these years.
Aside from my ate Unna, everybody else in the family took up arts in college and we weren’t required to take up accounting. The only money-related thing I knew how to do perfectly was writing a check (thanks, mom!). In fairness to my mom, she’s also the one who taught me how to open my own bank account back in college and how to enroll it to access online banking. Long story short: as long as my bank account would never reach zero, I was good. I was doing great, or at least that’s what I thought.
Unlike me, Jim is GREAT with money. Slowly, he’s been trying to teach me how to manage my expenses to build a secure future. Nakaka-in love, diba?! I just want to share some of the tips I learned from him just in case you’re as clueless as I was before.
CLEAR YOUR DEBT
As much as possible, DON’T use your credit card. If you must, make sure you pay for it in full every month. DON’T pay just the minimum fee. I did this for years not realizing I was losing so much money on interest fees! I told you I was pretty dumb with money. Huhuhu. If it’s too late and you absolutely can’t afford to pay the bulk fee, follow the next tip but instead of setting aside money for savings, when you get your income you have to prioritize paying for your credit card bill first. Try to pay at least half of it, maybe you’ll be able to get rid of it in just 2 months. If you must, only use your card for fixed expenses. I use mine for gas and I enrolled my Internet and TV cable bills to automatically be charged. My online subscriptions including Zinio and Audible are also charged monthly on my card. I’ve gotten rid of the shock that comes whenever my bill arrives because it’s always around the same number monthly. Side tip: make sure you actually use all your monthly subscriptions — otherwise, UNSUBSCRIBE!
INCOME MINUS SAVINGS EQUALS EXPENSES
When you get your income, you set aside part of it for your investments. Only then should you pay for your fixed expenses and budget for your variable expenses. Sample scenario for working girls: you get paid 25,000. 10,000 you keep in your mutual equity fund account, 2,000 you set aside because you’re saving up for new running shoes. 8,000 you use for fixed expenses (electricity/phone bill/rent), the remaining 5,000 you budget for variable expenses (groceries, movie dates, and whatever you want). No guilt if you finish it all because you already set aside your savings! YAY!
HAVE AN EMERGENCY FUND
Just within the past year all of these things occurred: I got dengue, I got repeatedly punched by a bunch of drunk party crashers (remember??), I severely sprained my ankle (stupid manhole cover was in the way), and Joey got bladder stones (FvCK SODIUM!). I got a hospital bill of around 50k, needed to get a CT scan for the punches I took worth 14k, had to get my ankle x-rayed and underwent physical therapy for a total of around 12k, paid for Joey’s operation and meds worth about 20k. These are just a few of the things that took me and my wallet by surprise. Life won’t always be peachy, there are really some low points and you’ve got to be ready for them. That’s why Jim and I have been tucking away a little bit of our income to make an emergency fund available for such situations. Try to do the same and make sure you have at least 3-6 months worth of your salary on standby. I highly recommend opening a bank account for this. Do NOT touch for bags or shoes. Haha! This is also very useful in case you lose your job — you will have enough money to keep you adrift while looking for the next job opportunity. If you don’t have a fixed income (if you’re freelancing like I am) then you have to calculate your monthly expenses and how much you need to live comfortably for the next 3-6 months — that’s how much you should have in your emergency fund.
TRACK YOUR EXPENSES
It’s a pain in the ass but it’s really effective if you’re diligent. Download an app on your phone. Jim and I use EXPENSE MANAGER. The interface isn’t as pretty as YNAB (You Need A Budget) but I haven’t mastered YNAB and he prefers the other app. Since he takes care of the budgeting for now, I just input my expenses and export it via e-mail whenever he asks for it. He then makes an expense report and we have monthly budget meetings just to discuss how we did for the current month and what to expect for the next. Believe me, we dreaded these budget meetings at the beginning because we would always end up arguing. I would get upset because I wouldn’t understand the process and I would just always give up. I am allergic to Microsoft Excel files. Jim had to talk to me and reassure me that just because I’m the woman in the relationship it doesn’t mean I have to take care of the budgeting for our home. He was happy to do it and all I had to do was listen. Now we pour ourselves some wine while discussing the numbers and we’ve been doing better than ever with our finances! YAY, TEAMWORK! If you’re not in a relationship with someone who’s good with money, I suggest you try to understand the You Need A Budget app because it comes with a lot of tips too. I promise I’m gonna master budgeting someday… Maybe today. Haha. After I finish this post. LOL. I am so much more conscious about my spending because I have to write it down now. When I’d go into Topshop I used to just blow a ton of money on clothes but now I think twice, even thrice, if I REALLY REALLY like something as much as Carly Rae Jepsen likes her crush.
GIVE YOURSELF A CASH ALLOWANCE
I was so used to spending all my money without realizing it. It used to be that as long as there was a number greater than zero in my account, I would spend. I liked sharing my blessings too and I don’t think that’s all bad but looking back, I used to treat my friends to a lot of food, drinks and even trips out of town! My sister Maxx is still like that today hahaha! We all love her for it but I’ve been trying to help her understand that her money could be going elsewhere. We obviously got it from our parents: mom always encourages us to “go buy it!!” and my dad always liked living in the moment. The fact that we like to make everyone feel comfortable and happy enough for us to spend on making priceless memories is not bad at all. I just think we can make invaluable memories for much less. I decided to withdraw ONLY what I’ve budgeted for my variable monthly expenses so that I am forced to stick to it.
I am still learning a lot about money and how to be wise with it. Once in a while I like going back to my old self and telling Jim he should buy the shoes he wants. As long as we work hard, we should be able to make room in the budget for fun stuff! You gotta be careful: there’s a fine line between being wise with your money and being way too stingy. Even if you save a ton of cash, you don’t want to end up being The (Lone) Wolf of WALEY Street. LELZ.