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Financial tips for the non-finance expert

Photo courtesy of Tax Credits

One month into 2017, and some of us may already be losing grip on the resolve with which we started. Hold fast! What is worth the change is worth the effort!

Year after year, people make their resolutions and commit to their personal revolutions. Studies show that, next to getting healthy/healthier, right along up in the Top 5 “I will’s or I must’s” is to develop better spending habits.

While I am by no means an expert in the field, I do have some top personal financial management tips. Financial tips for those of us who aren’t exactly the most knowledgeable, when it comes to matters of finance:

Do the math. Admittedly not one of my favorite subjects, doing the math is the first step to figuring your finances out. How much do you earn, compared with how much you spend? The answer may be a tad scary for some, and though reality may bite, this is key to improving your money management. If there always seems to be “too much month left at the end of your money,” then take a long, hard look and determine where cutting costs – especially unnecessary ones – can translate to savings. For example, I used to enjoy my twice a week Starbucks Tall Cappuccino with a shot of vanilla habit. Up until I found out how much it was actually costing me, and how much I could otherwise be saving. Doing the math, in this particular instance (and computing in Philippine currency, as I live in Manila), this indulgence worked out to roughly PhP1,550 a month, or PhP18,600 a year. And this is assuming I didn’t have a snack to go with the coffee. Now to some, that amount may be a pittance. But to me, it is a rather big deal to be blowing on signature coffee. Having said that, do I still occasionally enjoy that fancy cup o’ Joe? Most definitely. But no longer twice a week, every week.

Make hay while the sun shines. I have a general policy as far as work goes, which I do my best to keep – barring sickness and unforeseen events: Never say no to work. Work is a blessing, and I seek it out. And when work knocks on my door, I always answer. I am of the sound belief that the industrious shall never starve, and so far, this has proven itself many times over. Having said that, it is also important to strike for yourself a balance between work and life – lest you end up spending your hard-earned money on medical bills and therapy!

Set some hay aside. Store some of that precious hay for days when the sun doesn’t shine as brightly. Aside from having a savings account, I like to have not-so-secret stashes: Envelopes I designate for particular expenses at the start of each year. Things such as trips to the dentist, Christmas shopping, a new gadget, and some mad money. It really does work. The little that you put aside each day amounts to something, over time. I also have a penchant for shiny coins and crispy bills (yes, you may now wipe that befuddled look off your face), so these qualify as “instant” savings, as I do not like to spend them.

Be a smart shopper. Work out a budget of all your expenses. Compare prices of items at the grocery store. Compare prices between grocery stores. Use coupons, when you can. Keep an eye out for special deals and sales.

Just say no! Learn the immense power of that small, two-letter word. Walk by that third pair of red shoes. Put down that cute unnecessary knick-knack. And this goes for items on sale, too. Just because it’s a good deal, doesn’t make it necessary. Free yourself from the clutches of the money-eyed monster of consumerism. You’ll thank yourself for it later.

Plastic isn’t all that fantastic. WARNING! This next tip is NOT for the faint of heart! IT IS DRASTIC, and may NOT be for everyone! I gave up all my credit cards. Yes, I did. Wasn’t my idea, mind you; it was Oprah’s. Or at least one of her guest’s. Much as I tried to convince myself that the plastic was “only for emergencies,” many times, a cute blouse qualified as an emergency. Break out the sirens, that shirt is in my color and size! Well, bills snowball when you’re not looking, and could potentially turn into a credit-threatening avalanche of interest and massive debt. The day I paid off the last of my credit card debt, it was as though a weight was lifted from off my shoulders. I turned the last of my cards in, despite resistance from the account manager, and I have not looked back since. I am now much better able to stay within my budget, and live within my means – with the occasional over-spending slip-up. Are there pitfalls? A few. It is difficult to buy things online (I generally ask a friend), and I do fret now and then about the “what-if…” emergency situation. It’s also not ideal, when traveling. But in all, getting rid of the plastic has been more advantageous to me than not. If, however, this is not the route for you, then at least use your credit card(s) wisely, and do not let the interest pile up.

Learn the art of giving. No matter the religion or faith to which you adhere, or the absence thereof, it holds true: “Give and it shall be given back to you.” I do not know how it works – cosmic law, karmic cycle, faith principle, all of the above – it just does. I like to give to the most random of people, in the most random of situations – cabbies, street urchins, the person who looks like they could use a little help in line next to me at the grocery store checkout, etcetera. Of course, I do live in a developing nation, so opportunities for random giving abound. Giving does not necessarily mean money, either. You can give of your time and talent, as a volunteer in a hospice, children’s hospital, home for the elderly, school center. I also like giving in kind; like ice cream, treats, food items, a bundle of clothes to the street urchins I see. Be creative with your giving, and it will come back to you in the most creative of ways. Remember that hands that are open to give are also open to receive.

Make your money work for you. I must admit that I am still figuring this one out. Winging it a bit, with some tutelage from my dad. Once you have saved some money, look into ways to put your money to work – stocks and bonds, investments, maybe a small business. You might need to ask for some advice from someone with more experience in these financial fields, but this may prove well-worth the time and effort.

Cheers, to a financially rewarding 2017, for us all!