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Tuesday, July 14, 2009

Money Saving Tip #1: Avoid Unnecessary Spending

We Filipinos like spending for imported goods most specially those made from the Big Apple or US of A. For us, it's not just quality but most importantly, a status symbol.

One of the American made we Filipino embraced is the idea of "Keeping up with the Joneses." In our dialect, "inggit" or "suya." Unfortunately, this cultural tendency is what usually put us into bad debt.

Take for example the simple case of Miguel and Rolly. Both live in the same apartment building though in different doors, and they've been sharing San Miguel beer for quite some time already. Miguel worked as a mason while Rolly worked as a carpenter. Both were young and single.

At around June of last year, Rolly bought a surplus 12" colored TV on credit. The main reason was that he wanted to watch the PBA. From that day on, both neighbors turned Miguel's 2mx2m apartment into a noisy, smoke-filled, beer-smelling hangout as they both watched Mark Caguiao, Jimmy Alapag made quick, and fearless shots to the hop. However, most often they got into heated argument as to whose team was better -- Miguel's Genebra or Rolly's Talk n' Text. At one time the argument got so bad that from they refused to look or talk to each other.

Five days later, a brand new 12" colored TV was delivered to the Rolly's door; he bought his own TV (on credit) even though with his meager salary he wasn't how to sustain the monthly amortization. But everytime he remembered Miguel his blood would race, and then he would reasoned out that God will sustain him somehow.

A week later, Miguel bought a 75W stereo on credit. (His income was stretched beyond the max. level. But he could never stomach the thought that Rolly was better than him so he said to himself, "Bahala na! (Come what may!)"

Not to be outdone, Rolly bought a 100W stereo. He knew that he could not afford it anymore but everytime Miguel hit the max. volume of his stereo, and his glass, plates, spoons and forks began to shake, he had to get his own stereo by hook or by crook.

The war blasted on until Nov. By this time, the recession in the Big Apple finally reached the shores of Cebu. And to cut it short, both got laid off. As a result, both their TV's and stereos were either sequestered by the appliance shop for lack of payment or mortgaged to buy rice and daing (dried fish).

When it comes to money, don't allow yourself to be your own worst enemy. Before you decide to buy anything, take a hard look at you income and see if you can still pay for your basic needs -- food, water, clothing, etc. If not then you only have two smart options: don't buy or look for extra income to pay for the amortization. Don't close your eyes, cross your fingers, say "bahala na" or deny the fact that you can't afford it. Any of those won't help you pay the collector.

If you think owning a new TV, stereo, cellphone, etc. is cool even at the expense of being buried six feet under debt, think again. Today you may be the top dog in your circle of friends, school, office, village, but tomorrow, if you cannot pay your debt, you will be the hottest topic of gossips.

Lastly, God will only help people whose intentions are noble and good. Envy is definitely not in that list.

So be cool and make the smart choice today. Get out of debt or save yourself from debt!

PS: If you want to know more how to save money, how to avoid debt, how to get out of debt, and how to make a budget then click HERE. This is the home page of my blog where I shared my knowledge and experience in budgeting, expense tracking, financial planning, and making a budget that is not only doable but I actually proven for 8 years. I also shared tips, which I actually use regularly, on how to save money, where to save your money, and in the process you will know how to avoid debt. Learning to avoid debt is easier than getting out of debt so I put more emphasis on staying out of debt. As a bonus, I also assembled information on how you can make your own financial planning and budget software. To get all this information for free, please click HERE.

PS: I am interested to know if you find this article helpful so please feel free to drop some comments.

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