Saving Money High on New Year's Resolution List in 2008

LONDON (Reuters) - Saving money tops the list of 2008 resolutions for young people, taking priority over more common vows like dieting and exercising, research shows.

Some 54 percent of 18 to 24-year-olds say they want to put more money away for a rainy day next year while 44 percent resolve to exercise more and 31 percent to go on a diet, according to a poll by ICICI Bank.

It said this showed that the credit crunch was making people think about their financial future and rein in their spending.

Overall, one third of 2,100 adults surveyed said they would resolve to make savings high on their agenda for 2008.

That was beaten only by the intention to exercise and diet (44 percent and 38 percent respectively).

Some 18 percent said they would make being "green" a New Year's resolution, 8 percent plan to give up smoking and 2 percent want to give up alcohol.

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With this startling statistic, this only shows that more and more people are realizing the value of savings.

Saving for your future is every persons dream. But for it to become a reality. We must carry the right philosophy in money "It's not how much money you make but how much money you save."

We have to be consistent in disciplining and controlling our spending habits.

Here are some practical ways on how we can save for 2008:
1. Quit smoking.
If you spend P30 pesos a day for smoking, that will be an equivalent of P900 a month and a total of P10,800 a year.

2. Quit buying coffee from expensive coffee shops.
One cup of coffee will cost you P80 a day, that will be an equivalent of P1,600 for 20 days and a total of P19,200 per year.

3. Control your mobile phone bill expenses.
If you can save at least P500 per month that will be a total savings of P6,000 per year.

4. Quit using your credit cards.
Statistics shows that you increase your spending by 30% if you use your credit cards for purchases. As much as possible use cash. If you need to use your credit card for convenience. Make sure you pay the following week to avoid penalty charges.

5. Eat at home.
Eat out less often. If you and your spouse will spend at least P500 for every meal for just even once a week. That will be a total of P2,000 a month and a grand total of P24,000 a year.

From this 5 tips alone you can save around P50,000 a year.
There are many more things you can cut down in order for you
to start a new life this 2008.
So start the year right and you will experience a fruitful and a
debt free year of 2008.

Will Your Parents Have Enough When They Retire?

To all parents,

You sacrificed a lot to raise your family, sent your children to school, and provided to the best of, and at times even beyond, your abilities. But once your children graduate from college, I think it’s time for them to start earning and become responsible individuals. That’s the ultimate goal of every parent ⎯ to train and teach their children to become independent adults.

Sad to say, I have seen young adults in their 30s still living with their parents and dependent for allowances. Some even have started their own families but still living with their parents under one roof. This will put so much strain in the financial resources on any family. Everyone is just dependent on one breadwinner.


Parents, it is time for you to let go. You have done your part. Now is the time for you to think about yourselves. Once you reach your golden year of retirement, the only people who will be next to you will definitely be your spouse. Regardless of your age, sex, or marital status, you need to know a few things about your and/or your spouse’s retirement plan. When setting your retirement goals, you shouldnot leave anything to chance. Getting the answers to these questions can eliminate future surprises.

These are the questions we need to ask ourselves before we retire.
1. How much money do you have in your savings before you retire?
2. Do you have a pension retirement plan already in place?
3. What will be your expenses when you retire? List everything down.
4. Just in case you lose your capacity to earn, will you still be able to pay for all your bills even if you don’t have to work for another day in your life?
5. What are your passive sources of income once you retire? Will this be enough to cover for all your expenses?

If we don’t handle our finances well while we’re still young, we will definitely experience hard times once we retire.

In life, “if you fail to plan, you plan to fail.”

Money Behind 80% of Separations

Fifty percent of all marriages fail, and financial problems are the leading cause of separation by a factor of 4:1 or 80% of all causes. Isn’t that alarming? Yet, it is true that the number one cause of marital problems are arguments on money. This is one sad fact about money, but this is the reality.

I don’t know if you have experienced this, but financial problems usually do not even emanate from either you or your spouse. It can be because of a third party. Do you get what I mean by third party? Well, as Filipinos, we are clannish. There is always that probability that one side of the family, say your immediate relatives, needs money.

I would like to share with you some practical tips on what my wife and I have agreed on how to avoid conflicts with regards to money.


Tip No. 1: Open Only a Joint Account

Never keep a separate or secret account from your spouse. Friends and relatives will usually come to the wife or the bride-to-be and offer unsolicited advice, such as “If I were you, I will open another bank account. You do not know what will happen in the future. You know what I mean, just in case.” If you open another account and listen to the advice, unconsciously you have opened the idea of a possibility that your husband will cheat on you someday. You have already allowed the negative idea that your husband will not remain faithful in your marriage. The foundation of all marriages is trust. Trust must be preserved right from the first day of marriage.

Tip No. 2: Keep Your Personal Income Private

Never allow any of your immediate relatives to know how much money you are making in a month and how much money you have in the bank. Why? Let’s say your brother knows that you have saved P100,000 in the bank. The money is intended for the tuition of your children. All of a sudden he needs P30,000 for personal reasons. Who do you think your brother will call for help? Ghostbusters! I don’t think so. The first person he would think of and call will be you. Even if you explain that the money is for the tuition of your kids, he may still feel sad that you weren’t there for him when he needed you most.
What if your immediate relatives ask how much you are making in a month? My wife and I have agreed on a standard answer, “Just enough!” If they insist on asking how much specifically, we just tell them that we are making just enough to meet our needs.
These issues, if left unresolved, will cause strain as well as a tense environment in the relationship as husband and wife. So discuss, disclose, and agree as a couple on what are the limits you want to set in terms of extending help and support to your immediate family. This will help avoid miscommunications, disagreements, and stress in your relationship. In reality, money will be a constant concern in our lives.

DO YOU HAVE A BUDGET?

Very few people ever bother to budget, which is why so many people are in debt. Few really realize just how much they spend on worthless expenses and in the end regret for the expenses they’ve made. If you want to keep your spending under control, it’s essential that you make a budget. What is a budget? A budget is a written plan on how to manage your money. A budget allows you to get a handle on the flow of your money⎯how much is coming in and where it goes to. With that information in hand, you can make intelligent choices about how to spend. In order for us to gain financial freedom, we need to be conscious of things and attitudes that are crucial to our finances. A budget is one such thing.

Goals of Budgeting
What are the goals of a budget? I made an acrostics of the word called BUDGET.

B for Boundaries⎯If you know your boundaries and set your limits for your expenses, you’ll able to live within your means. It also helps you stay away from debt.

U for Unwanted stress and pressures⎯Bills and utility expenses should be expected month in and month out. So if you have set aside the money before it even comes, it helps you relieve unwanted stress and pressure in life.

D for Debt-free⎯A written budget is a key to succeeding at being debt free. This may mean eliminating costly activities such as getting rid of cable, traveling less, eating out less, and watching fewer movies. It also helps you know how much money you can devote each month to paying off debt.

G for Generate more and give⎯It will help you to determine specifically how much money you need in order to meet your needs. It will also help you know how much you want to believe God for excess in order for you to be a blessing to others. God will take whatever you give to others and give it back to you. Remember what we sow is what we reap.

E for Eradicate impulse buying⎯It helps you manage your money effective, you need to fight impulse-buying tendencies and stick your spending to your budget plan. When you enter a supermarket or department store, normally you will see many items on sale that may trigger your impulse to buy. Hence, when you have a budget, you must be firm on how much you want to spend. If you are kind of person who cannot control his spending habit, leave your credit card and extra cash at home.
Remember, if you don’t have it, you can’t spend it.

T for Trust God⎯It will help you determine how much money you need to ask and trust God for more. Believe that He will provide not only for our needs but also for the desires of our heart.

Shop Till You Drop

Let us ask ourselves these questions. What are your spending habits? Are any of these reasons keeping you from getting ahead and keeping you in debt? If so, you will want to work towards breaking those habits. Spending habits can be changed. You need to identify the spending leaks that give you immediate pleasure or satisfaction. Then substitute desirable spending behaviors that will help you reach your financial goals.

Some practical tips to control spending:

• Avoid exposing yourself to things that tempt you to spend. Stay away from stores, except when you have something you absolutely need to buy. Make a list and stick to it when shopping and then leave the store. Just browsing can lead to buying.

• Plan your shopping. Go with a purpose in mind. Use that list! Extras you don’t really need can certainly push up the total at the cash register.


• Limit your number of trips to the mall or restaurants. It is so tempting to eat or buy food outside even if we know that there are food prepared at home.

• Don’t shop in a weakened condition. By shopping when hungry, tired or depressed, you may find yourself overspending.

Remember for things to change we have to change.
Change our habits and we change our lifestyle.
Change our lifestyle and we change our destiny.

Use Money As A Tool

What is the purpose of a tool, is it to make life easier or harder? I think the answers seems to be pretty obvious. It is to make life easier.

The way we handle our finances is an indicator of what is inside our hearts. Show me your bank statement and I’ll tell you what kind of a person you are. The way we spend money and the way we handle it, tells much if we are using the money in the right manner or in wrong manner.

This reminded of me of a story of a rich man. There was a man who had worked all of his life and had saved all of his money. He was a real miser when it came to his money. He loved money more than just about anything, and just before he died, he said to his wife, "Now listen, when I die, I want you to take all my money and place it in the casket with me. I wanna take my money to the afterlife."

So he got his wife to promise him with all her heart that when he died, she would put all the money in the casket with him.

Well, one day he died. He was stretched out in the casket, the wife was sitting there in black next to her closest friend. When they finished the ceremony, just before the undertakers got ready to close the casket, the wife said "Wait just a minute!" she had a shoe box with her, she came over with the box and placed it in the casket.

Then the undertakers locked the casket down and rolled it away.

Her friend said, "I hope you weren't crazy enough to put all that money in the casket."

She said, "Yes, I promised. I'm a good christian, I can't lie. I promised him that I was going to put that money in that casket with him."

"You mean to tell me you put every cent of his money in the casket with him?"

"I sure did, " said the wife. "I got it all together, put it into my account and I wrote him a check."

We need to understand that money is just a tool. It is to make our life easier and better. For example, what is the purpose of a chair? A chair is use for sitting. What if there was a big typhoon? Since you did not bring any umbrella, you used the chair as an umbrella. Aside from the fact that it will be ineffective. How do you think you will look like? Definitely funny! Because we are using the chair for the wrong purpose.

So now let me ask you a question. How would we know if you are using our money the right manner or the wrong manner? If the money we are making is making our life easier and better it means to say that we are using the money the right way. But if the money we are making is making our life harder and difficult it means to say that we are using the money the wrong way.

My hope is that our financial decisions will be based on being content with the basics, food, clothing and shelter. Wait patiently for the right time to come for the things that we may want and desire in our life.

Let us not focus on the things that we have and not on the things that we do not have.

For Godliness with contentment is great gain. Let us first stick to the basic and allow God to provide for the right time. When God blesses us with something in the right time he adds not trouble to it.

Introduction

Hi there! This will be my first official blog under this site. I am encouraged by Pastor Dennis to write my blog more on the serious and the educational and inspirational aspect specially in my area of passion FINANCES.

When I do financial seminar. Most often the questions that I get is how can I create wealth?

Personal finance is easy . Yah! Your right! It is easy if you know the fundamental law that governs your money. If you master this, you have mastered the entire game: To gain wealth, you have to spend less than what you earn and do it for a long long time.


That’s all it takes. Think of it another way. Think of it like an arithmetic equation:

[WHAT YOU EARN] - [WHAT YOU SPEND] = [WEALTH]

If you spend more than you earn, you are losing wealth. You are accumulating debt. You are heading in the wrong direction. However, if you are earning more than you spend, you are accumulating wealth. The greater the gap you can create between earning and spending, the faster you will accumulate wealth. There are only two things you can do to gain more wealth: spend less and earn more.

Spending less is something that you can do right now with little or no effort. Just stop spending money. Seriously. That’s it. Don’t buy things. Sure, you need to buy some things, but if you learn to pay less for the essentials (food, shelter, clothing), and if you can learn to reduce your wants, you can trim spending by a shocking amount. Learn how to shop for groceries and to make your own food. Develop a frugal mindset. Live simply.

Earning money is the other half of the wealth equation. If you can increase the amount you earn, you will accumulate wealth more quickly. Because earning money is so important, many personal finance books stress that your career is your most important asset. Your most important asset is not your house; it’s not your investment account; it is not — heaven forbid — your car. It’s your career and your capacity to earn.

This is why a college education is so important: it can help you land a better job, can increase your earning power. This is why your professional reputation is so important: what your employer thinks of you, what your co-workers think of you, what your customers think of you all play a role in your success. If you treat your career like a prized possession, you’ll have greater success at finding better paying, more-fulfilling jobs.

Smart personal finance really is this simple: spend less than you earn. What do I do with the money I make? First I set aside my best for God, my tithe to Him. Because He is my partner and the one who gives me the ability to produce wealth. Second set aside ten percent of what I make for savings and the emergency fund then adjust our standard of living to whatever is left. Let our standard of living adjust to what we make rather than asking our income to adjust to our standard of living. That makes a lot of difference.

If we continue to live a simple, frugal and discplined lifestyle of spending less than what you earn. When you grasp this concept, financial success and freedom is obvious.