You have an emergency fund. Now what?

I’ve always been an advocate of having an emergency fund. In my previous blog entries, I recommend that you should have at least eight months’ to one-year worth of emergency fund (see story).

But what if you have already completed your emergency fund? What if you have managed to amass one-year worth of EF? What now?

First of all, congratulations! This is a great way to start your pursuit of financial independence.

Now that you have your emergency fund, make sure you keep this safe and sound. Place it in a time deposit that gives you a pretty good interest rate.

Any money that comes in now can be placed in other investment instruments or earmarked for other goals. If you’re planning to buy a new house, then you can start saving up for the 20% down payment. You can also start investing in mutual funds or bonds. You can also get additional insurance for you if you have dependents. Basically, the coast is clear for any investment you may want to take.

40 Ways to Save Money

Starting your savings is hard. Just like anything, the first step is always the hardest. But with a little discipline, creativity and work, you can start saving money. You don’t need to do all of those. Just a few will help you kick off your saving.

These tips and tricks, gathered from different resources, are the most common ways of saving money.

1. Pay off all your debts first before saving.
2. Keep track of your expenses.
3. Bring lunch to work.
4. Say ‘no’ to sodas. Drink water.
5. Use the ‘envelope’ method for your household expenses.
6. Leave your credit cards at home.
7. Set a fixed amount that you will save every month.
8. Minimize mall trips.
9. Read personal finance books, blogs and online boards.
10. Open a savings account that does not come with an ATM.
11. Cut back on eating out.
12. Stick to your grocery budget.
13. If you want to buy something, ask yourself if this is a ‘need’ or a ‘want.’
14. Take advantage of promos.
15. If you saw something you want to buy in a mall, wait for 30 minutes to see if the urge to buy disappears.
16. Don’t bring a lot of cash in your wallet.
17. Commute. Don’t take taxi rides.
18. Treat yourself to one major splurge every month.
19. Don’t eat at pricey restaurants.
20. Take advantage of the free stuff in your office like coffee, snacks, juice, etc.
21. Fly economy.
22. Save up for big expenses.
23. Keep your hairstyle short and simple.
24. Learn to pamper yourself at home.
25. Exercise at home. Don’t go to the gym.
26. Always do your shopping list and food menu.
27. Bring your leftover food at work.
28. Use your credit card only if you can pay the balance in full. Use it for the points only.
29. Plan vacations early.
30. Car pool.
31. Stay away from sales of items you don’t need.
32. Don’t follow fads.
33. Go into business to bring more money.
34. Do the grocery once or twice a month to save on gas and avoid impulse-buying.
35. Take care of your health.
36. Look for alternatives.
37. Coffee in convenience stores like 7-11 or Ministop is cheaper than from Starbucks.
38. Don’t bring your kid when doing the grocery.
39. Buy second-hand books.
40. When going to the mall, make sure you eat at home first and that you feel full.

2009 Goals: A Review

At the start of 2009, I listed down our goals for 2009 (see story). Goal-setting is an important component of financial independence as you need to see where you want to be and be able to keep track on how you are doing.

Since this is the middle of the year, it’s time for me to check on the status of our goals.

1) Additional personal savings of PhP120,000.
*** Status: Done. I expect to save more from my salary before the year ends.

2) Ebay net earnings of at least PhP10,000 (earmarked for travel)
*** Status: 60% complete.

3) Add PhP12,000 to our mutual funds in Philam Fund, Inc. and GSIS Kabuhayan Fund.
*** Status: 33% behind. We are running behind in this goal. This is largely because of the unstable market and I’m quite nervous of placing more money in our mutual fund.

4) Start a retirement account of PhP12,000
*** Status: 50% complete. Just right on track.

5) Completely get rid of hubby’s credit card debt.
*** Status: 26K left. We expect to complete get rid of his CC debt by August 2009, four months ahead of schedule.

6) Pay off our car debt in full by November 2009.
*** Status: One month ahead of schedule. We expect to fully pay off the car loan by October 2009, one month earlier than we committed.

7) Save at least PhP140,000 from hubby’s salary.
*** Status: 50% complete

Optional goal: Travel to a foreign country
*** Status: Our Singapore travel is scheduled on October.

How about your goals?

Money Lessons from Michael Jackson

By now, you have heard the news that the King of Pop Michael Jackson has died.

Years before his death, we saw how the media and the general public made a laughingstock of the pop icon, with his ever-changing physical appearance to his never-ending financial woes. Despite of many years of fame, earning obscene amounts of money, we have seen Jackson fall into the trap of the money (mis) management web. It is just disheartening to note that the musical genius probably died broke.

Here are some money lessons that we can learn from Michael Jackson.

1) Live within your means.
Celebrity blogger Perez Hilton once called the King of Pop “a millionaire living like a billionaire.” According to Hilton, despite the dwindling income of Jackson, he continued to live like a king, spending $400 for ice cream, lotions, etc.

2) Straighten out your life.
One major cause of his money problems was his never-ending legal battles. He paid millions in legal fees, shelling as much as $25 million to the family of the boy, who accused him of sexual molestation. Promoters also sued him for millions of dollars for breaches in contracts. All these could have been avoided (aside from the public humiliation he experienced) if he straightened out his life, kept his dick inside his pocket, and honored his obligations.

3) Be true to yourself.
Here’s where it all began, his pursuit to improve his physical appearance. Okay, Jackson suffers from vitiligo, a chronic dermatologic disorder that causes depigmentation in patches of skin. This is said to be the cause of Jackson’s formation from a black man to a white being.

But over the years, Jackson also had several surgeries to correct what he perceived to be his imperfections. He was also rumored to have used equipment to slow the process of aging. These treatments, whether aesthetic or medical, racked up his medical bills.

4) Learn to let go.
His Neverland ranch requires $3 million a year for maintenance. He was also unable to pay taxes for the famed tourist spot. Despite his increasingly dwindling financial resources, Jackson refused to let Neverland go. At the time of his death, he no longer has the deeds to Neverland.

At the end of it all, Michael Jackson was just like the rest of us. He committed the same money mistakes like any ordinary individual (of course, the amount is not the same). His life would have been much better—financially, physically, morally, mentally and emotionally—if he just got his act straight. I’m just glad that despite of all these, he will still be remembered as a musical genius.

Michael Jackson…gone too soon.

How to waive annual fee of BDO

Last week, I visited BDO to get the statement of account for my checking account. While waiting for the BDO personnel to get the document, I saw BDO’s flyer for its BDO Gold Credit Card.

Reading the Terms and Agreements of BDO Gold, I found that you only need an annual cumulative purchase of PhP180,000 to waive the annual fee. This also applies if the combined usage of the principal cardholder and the supplementary cardholder is PhP180,000.

However, this benefit only applies to the principal cardholder. If you are a supplementary cardholder, the annual membership fee is free for the first year only. You will charged for the succeeding years, irrespective of amount of card usage.

Why is this important? Because it is clearly stated in BDO flyers, BDO cardholders have the definite knowledge on how to waive its annual fee. Cardholders wouldn’t be given the runaround like what I experienced from BPI when I requested to have my annual fee waived (see story).

The PhP180,000 annual purchase is also not too bad. This is just about P15,000 a month. But always remember to pay in full after charging purchases to your credit card.

Can you afford a wedding?

It’s June once again and many couples are walking down the aisle to say their “I do.” Contrary to popular belief though, December is the “wedding month” rather than June.

If you’re one of the many couples, who are planning to get married this June or in the next few months, the number one is not love. Yes, you read it right. The number one consideration is and should always be money. If you and your fiancé/e are planning to get married, here are the things you need to factor in before you say your vows:

1. Set the budget.
Before setting the date and venue, set the budget first. Knowing how much money you have and need to still save will allow you to properly plan the date and venue for the wedding. Many couples have made the mistake of reserving a venue only to realize that it is way out of their budget.

Setting the budget also allows you to identify how much money you have and how much you still need to save.

2. Be creative.
Getting wedding suppliers can be very expensive. The more popular they are, the more expensive they can get. Your wedding is a great time to be creative to save money. If you’re into graphics design, you can make your own wedding invitations. All you need is a graphic software like Adobe Photoshop, some special paper, and you’re good to go.

You can also make place cards, name tags, and even wedding souvenirs via Photoshop. I also know some people who used their computer skills to design their own wedding albums.

When my husband and I got married, we did our own wedding invitations. We just bought some special paper and ribbons from the bookstore and other items from Divisoria. Ours was a “Message in a Bottle” and it was quite easy to assemble. We did everything ourselves from the design to the printing and the assembly. I think we just spent less than PhP500 for 75 invitations.

3. Tap your network.
If you’re not creative, you must have a friend who can do it for you. Instead of asking her to give you an expensive gift, her gift can be her labor of love. She can design the wedding invitation and you just have to reproduce it.

If you have friends who are into photography, ask them to take photos during the wedding. Friends and family members almost always bring digital cameras during weddings and you can just ask for copies of their photos so you can make a wedding album.

Friends and family members who know how to sing or play an instrument can also perform in your wedding. Same goes for those who can host.

4. Haggle.
If you intend to have professionals in your wedding, make sure you haggle. The practice among wedding suppliers is that they increase their rates every year. Make sure that when you hire your suppliers, you lock in the price so you won’t get surprised with an increase come your wedding day. Also make sure that you draft a contract to ensure that your suppliers deliver the terms and agreements.

Aside from locking in the price, ask your wedding suppliers to throw in freebies. When I ordered my bridal bouquet and flowers for the entourage from a Dangwa vendor, I asked him to give me freebies like the shower petals and the flowers for the bridal car.

5. Seek alternatives.
If you can’t afford this particular wedding supplier, choose another one. If the church you want is too expensive, consider another. Learn to roll with the punches and have other options. Don’t take an “all-or-nothing” attitude. This kind of thinking leads you to financial disaster as you will be tempted to borrow money, pay more than you can afford,etc.

If you can’t afford a church wedding, then by all means, consider a civil wedding. It is no less legal and binding.

6. Keep things in perspective.
Finally, keep in mind that your wedding is just a one-day event. Although this should be the most memorable day of your life, the rest of your life is the most important thing to focus on. Like what our elders say, “Wag gumastos ng sobra kesa naman magdildil ng asin pagkatapos ng kasal (Don’t splurge on your wedding and then be broke after).

Always resist the urge to borrow money to pay for your wedding. If you need to charge something in your credit card, it only means you cannot afford it.

A wedding may be a once-in-a-lifetime event but there’s also a “forever” after all the ceremony. You may indeed have the wedding of your dreams but if this means financial disaster for you and your spouse, then your forever may be a nightmare.

Event: Money Matters for Women

I just received this in my email and if anyone’s interested, drop by SM City Taytay’s Event Center for a seminar on “Money Matters for Women” on May 16, Saturday, from 4 PM to 6 PM. The event is facilitated by author Francisco Colayco.

For more information, contact (632) 637-3731, 637-3741 or email info@colaycofoundation.com. You can also visit the www.colaycofoundation.com. I assume this seminar is free so drop by and you may learn something.