Current Headlines


Sunday, November 22, 2015

How Overspending Can Be Avoided When Extra Money Comes

By:  Gilbert M. Forbes
Financial Wellness, Stewardship Advocate

Christmas Season is coming too fast once ber-months is around.  And this month of November, most of our employees or workers in the government sector are starting to receive their bonuses.

Once, we receive additional money, we begin to think of things to buy e.g., new clothes, gadgets, We even justify that it is needed, let say for instance, the need for a heater or a replacement to an aging cellphone.  Until, we just wake-up that none is left already.  Worst case scenario is to be in a budget dilemma because we forgot to buy things that are necessary like the food on the table for Christmas and New Year.  For sure, we will resort to credit or debt which of all the things, should not have happen.

This could be avoided if we will do the following:
  1. Budget and carefully plan your expenses.  In your budget, include all your payables and irregular expenses for at least three to five months. Think many times before buying some thing by asking, is it really needed? Is there no other alternative but to buy it?  What will be its effect to my general finances or cash flow?
  2. Save It All.  Correct, if you are not in a tight budget, save it all.  Just get the budget for Christmas to your existing irregular expense account savings.  Be sure that what you will take is only the amount budgeted and actually allotted for it.  Don't over-spend, otherwise, your other irregular expense needs in the future could be affected badly and so your monthly cash flow or finances.
  3. Invest.  You may get an additional insurance protection if your current protection has not yet reached the suggested minimum.  Or you can get additional health insurance apart from your PHILHEALTH hence it is not usually enough to cover hospital bills whenever ourselves or any member of the family got confined.  The bigger the coverage, the better.
Let us always remember that all financial benefits we regularly receive is not part of our salary and so not part of the so called active income that we are suppose to spent to make a living.  Financial literacy experts are constant and united on their suggestions that it should not be spent, instead save and later make it grow.

After all, delayed gratification today, is worth a thousand joy and peace of mind.We are to choose.

Monday, November 9, 2015

Simple Importance of Irregular Expense Savings Account

By:  Gilbert M. Forbes
Financial Wellness, Stewardship Advocate

Suddenly, your washing machine runs out of order.  Then in just a couple of minutes the CPU of your desktop computer.  As if your day turns to a bad fate, your DVD player too.  What will you do then?  Its still a week earlier before the pay day.  And even if it so, your net salary is just enough for a living.

It would of course be not a big problem if you have a withdrawable savings account in times of unexpected events like this.  This is the so called irregular expense savings account.  A savings account intended for seasonal needs, including emergencies,  tuition fees, birth day party, fiesta etc.

With an irregular expenses account, there would be no problem in looking for money in times of emergencies and seasonal needs. Most of all, you will not be tempted to apply for a loan and have debt.  Of course, having debt will mean you have to pay it later including the interest and its impact on your monthly income would certainly be great for it will mean decrease in your buying capability instead of increase.  But this can be avoided.

Personally, it just happen to us for this year is a good year.  One by one, our household appliances just broke.  The first were our two stand-fan and desk fan last summer.  Then, just more than a month later, our washing machine, then our CPU and CRT monitor and just recently, our two-burner stove was discovered to have a leak.

Just try to imagine if you have no extra cash for the said appliances repair and replacement?  What will you do?  For me, I took the zero interest credit facility to purchase a 16-inch LCD PC Monitor and TV into one at Php3,499.00 only payable for three-months.

You might ask, so you fall into debt.  Yes but its a good debt because we could have paid it in cash but instead of paying it at once, we used first our budget for it from our buffer fund for leverage. The double burner gas stove will follow after paying in full the said monitor.

These are just simple things.  It still doesn't include quite serious matters as family sickness and destruction brought by both natural and man-made calamities.  You are the one to decide folks.

But one thing is sure. We can make things simple or complicated depending on our choice.  So what is your choice then?