Posted in July 2010

Motivate Yourself to Save

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Sunday 4th July 2010, 5:53am

How proper motivation can teach us to save money.

Sometimes, when I look at my bank account, I think that I am not saving enough. Well, I do feel a bit guilty on this department. I do know for a fact that 10% of my salary should go to my savings account, but there are times that something would come up and it would be impossible for me to make the cut. And I do know that I am not alone here. Most people end up using their savings as a financial cushion whenever the money problems arrive. And they forget to put money back so they end up with less and less money in their savings until there is none.

I’ve managed to get past that dilemma by setting up a different strategy. To keep my mind focused on saving, I make a goal and put it in my wallet where I can see it every day. For my goal to go to Paris on my birthday, I had put a picture of the Eiffel Tower in my wallet. My friend, the one who originally suggested this idea to me, would use his goal as his password to motivate him subconsciously (in my case, it could be “triptoeiffel”).

To prevent myself from using the Paris money on emergency cases, I also kept a separate account as my emergency financial back up. The only reason that my savings would get withdrawn is if it goes beyond the back up money.

Even if sometimes I fail to make the cut, I know that I am still on the right track. Watch out, Paris, coz here I come!

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Even Big Spenders Can Save

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Sunday 4th July 2010, 5:51am

How big spenders can become big savers. :-)

My aunt and her family is a good example of a big spender turned to a big saver. Before, they would always run to me to help in paying for either their bills or their credit cards. Since I am bothered at how much a family of three (my aunt, her husband, and their 3-year-old daughter) could spend so much in a week, I decided to track their spending habits in the past two weeks. Guess what I found? Hundreds of dollars going down the drain just because of poor money management.

I knew that its time that we have serious money talk. I was glad that her husband was willing to listen to my blabber. But I surprised them even more when I showed them the figures of how much each of them has spent. After a little confrontation between the couple, I then suggested some changes to make sure that they would get to save even if they tend to spend a lot.

First thing I noticed was that the couple tends to go for take outs and deliveries. Their fridge is actually empty except for a few perishables like milk, fruits, and mashed food. They shop only what they need and when they need it. What they didn’t know is that they could have saved much more if they chose to cook instead.

I also advised them to go use cash instead of credit cards when shopping. I told them to keep just one credit card in their wallet so they don’t get tempted into impulse buying. And that credit card shall be used for emergencies only.

There was a bit of hesitation at first, and adjustments were hell. But with my recent visit last week, the couple was already all smiles. They’ve managed to start paying off some of their credit card bills now. And what’s left of their money is now put into their daughter’s college insurance. If this keeps up, they would be able to clear their credit card debts and be financially secure in no time.

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Everything Starts out Small

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Sunday 4th July 2010, 5:49am

Great problems start from small neglects. Enough said. ;-)

Sometimes, it’s the small things that we ignore that tend to snowball into big and dangerous events.

One good example is your credit card balance.

We get to a point that we leave a small amount of credit card balance unpaid for whatever reason. But if you only tend to pay the minimum monthly payment, it would take you a really long time to clear off your card and finally get it over with. And because of interest, you end up paying more than the balance you originally left off.

Since we don’t want that to happen, you would have to start paying your balance right way. But if you currently don’t have money to pay it off, go ahead and get a personal loan to use in pay for it. Sounds like a crazy idea? Yes. But consider this: personal loans have lower rates than credit cards and are not secured by assets. Thus, it will be much easier to pay off a personal loan than your credit card. With this, you can pay for your credit card and be done with it, then start your payments on your personal loans.

Don’t ignore something just because it’s small. Sometimes it’s the small stuff you ignore that turns out into disasters in the end.

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Do Sweat the Small Stuff

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Sunday 4th July 2010, 5:47am

An article about paying parking tickets and thus avoiding future headaches.

While helping out my roommate clean out his closet, I found several parking tickets that have been left unpaid. So I asked if he want me to put it away since they were still unpaid. I wasn’t actually surprised when he said that he wants me to throw them away instead.

A lot of people nowadays fail to pay their parking tickets, thinking that such a small amount of money is irrelevant. But the truth is small payments like this one can snowball into disaster just because you failed to pay them.

What you don’t know is that your tickets, if left unpaid, can gravely affect your credit score. This also goes for old library fines. Both of them are now being turned over to collection agencies which can take off around 100 points or more from your credit score. And if payments are not received by the libraries or city agencies, your accounts will be marked as delinquent as well.

The only way out of this is to take care of your library fines and parking tickets as soon as you get them. With this, you eliminate the likelihood that you forget to pay for them, and avoid the complications afterwards.

I wish I haven’t told this to my roommate though. Now he owes me the money he’s going to use to pay off his parking tickets. *sigh*

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