She's Not a Budgeting Software But Her Idea for Staying Out of Debt is a Life Saver

“Do not spend more than you earn.”

This was an unsolicited advice that my mother used to drum on my head over and over again when I was still a small boy. When she talked about spending and budget she usually inserted this line.

Another way of looking at this principle is to imagine an empty glass with a hole in the bottom. If you fill it with water and leave the hole, then sooner or later the water will run out. If you don't manage your expenses then time will come when it will exceed your income. If this happens you are in an very unpleasant situation.

Tess earned around P3,000 bi-monthly (including overtime) as a factory worker in one of the American firms in MEPZ (Mactan Economic Processing Zone). As a single mom she had to shoulder all the expenses at home which cost about P2000. This covered the rental, food, electricity, water, etc. On top of this she was also paying P500 for her child's education. She used the remaining P500 as her allowance (for food and transportation) to work.

One day while passing thru Marina mall she saw a Nokia 3210 (latest model during that time) she felt in love with it that she couldn't sleep. Emma knew deep in her heart that she cannot afford the new cellphone but she just said "bahala na" (come what may).

The next day she borrowed money from her officemate who was into 5/6 business in order to purchase the celphone. As a proof of payment, she surrendered her ATM machine to the loan shark.

As a consequence she got buried in layers of debt for more than a year as she borrowed money from one person to another in order to pay her other debts. For example, she borrowed money from Pepeng to pay the loan shark, then later she borrowed from Rose to pay Pepeng, and the loan shark, and so on and so forth. In the midst of all this, Emma's automatic reaction was to complain a lot about her fate in life, but she didn't do much to change her situation. Instead of taking a serious look at her financial status (income versus expense), she just plodded along with life taking solice in the fact that she was not alone in her plight; her kumares in the workplace also had the same situation. Also, neither did she monitored her expenses nor made the necessary corrections to her lifestyle.

So the vicious cycle of “receiving income – dispose money until it runs out – borrow money – pray for an overtime” went on. Emma became depressed and frustrated but she believed that this was her destiny, and that she cannot do anything about it anymore.

Emma was wrong. There was something that she could do. And this is called budgeting. But the problem was she was not trained by her monther how to keep a budget because her mother was a trigger-happy spender herself.

There are so many Emma's out there who feels victim in life. But this doesn't have to be this way. One good measure to avoid being a victim of your own wrong choices specially when it come to handling money is to follow the advise that my mother gave to me.

“Do not spend more than you earn.”

This way you start fixing the hole in your glass. So be smart and live a peaceful life!

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.