Money Saving Tip #3: Don't Put Your Money in Your Pocket

“Where did my money go? Two days ago I was sure I had P2500 inside my pocket but now I only have P800 left.”

Isn’t the above statement sounds familiar. (The amount might be different but the scenario is basically the same.)We spend and spend until we end up with nothing. That's the time we will start to wonder where did the money went.

It was a Friday and I was supposed to go to SM to pay some bills – electrical bill, telephone bill, and water bill. Unfortunately, I got tied up with a very urgent matter in my workplace on that day, so I was not able to pay my bills. Innocently, I tucked the crisp peso bills inside my pocket thinking that it won’t go anywhere.

Weekend went in a blip. All I can remember was that we went to supermarket to buy some grocery, some house maintenance stuffs, and some medicines for the kids. Oh, we also had lunch in the kids most favorite dining place -- where else but in Jolibee. On Sunday the family visited my mother in Mandaue City. From there we went to the children’s favorite play area – under the Marcelo Fernan Bridge.

When Monday morning came, I dug deep into my pocket to extract the leftover of the weekend – a folded but still crisp P1000 bills. Alarm bells went crazy over my head as I felt panic and guilt all at the same time. I was suppose to close three billings but with the leftover money all I can afford to pay now was the telephone bill (P600), and the water bill (P200). I only had three options then: skip payment, borrow some money or bore a hole through my own savings. With a heavy heart, I took the third option.

I hope you will agree with me but one of the depressing things to man is realizing that he spent a money tied up to something (bill payment or investment seed money) on something unplanned and non-urgent.

So what happened?

My realization is this, “Any money put in your pocket or your wallet is as good as money lost.” It’s like putting your money in the drain. Any time soon it will be flushed down the surge and you won’t even realize it until it’s too late.

I know this does not apply to all specially to those people who are so disciplined when it comes to spending their money, but in general I believe this applies.

So what is the tip?

The tip is, “Never put your money intended to pay your monthly bills, to pay a future expense (college education), to pay an investment, etc. in your pocket or wallet, unless you intended to use it within today.” The money in your pocket or wallet should only be those that you intended to be spent any time soon like your weekly allowance.

In my above situational example, the best thing that I could have done was to remove the P2500 out of my pocket when I got home, and put it in a safe place. This way I could have avoided the regrets that followed.

Putting money that is not suppose to be spent now in your pocket or wallet is similar to an Alcoholic Anonymous member who stuffed his house with Gilby’s, San Miguel beer, Red Horse, Emperador, Ginebra, etc. You are just setting yourself to fail.

Money has many purpose and usage. Just be sure to put in your pocket or wallet only those crisp bills that you can afford to lose anytime soon.

Be cool and be smart today!

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.

Money Saving Tip #2: How to Be a Smart Buyer?

Do you consider yourself a smart buyer? If you’re not and you wanted to become one then this post is intended to give you simple guides as to how to become one.

What is a smart buyer?

In my own humble opinion, a smart buyer is someone who spend using his head rather than giving in to his or her desires and wants thereby avoiding unnecessary expense.

Daphne just received his first pay salary since joining the corporate world a month ago. To go out on a bang, she went straight to SM to buy the bag of her dream. Yes, she loves bags. Feeling that she deserved to reward herself big time, she went straight to a Gucci boutique.

After an hour or so of looking, inspecting, admiring, and repeating the process all over again for countless times, she decided to buy the vinyl monogram large tote bag priced at P9000.

The price was more than one-half of her paycheck but she reasoned that since it was her own salary she could do anything with it. At the back of her mind she was thinking that in case she ran out of money for taxi fair, she could always ask from her dad.

The following payday, she went straight to SM again to go “malling”. This time a few of her lady office mates came along with her. When they passed the Guess boutique her sharp eyes spotted the glitters of a shiny red shoulder bag. She immediately called the attention of her friends who obliged to her plea that she will only take a few minutes. After an hour or so, Daphne came out of the boutique proudly carrying a paper bag with the guess logo on it; inside was a P2000 red shoulder bag.

After six months, Daphne had a closet full of bags worth P30000. What was disturbing was that she did not use all of these.

Are you a Daphne when it comes to purchasing items? If you have a bottomless pocket or a sugar daddy or a sugar mommy then it doesn’t matter. But if you’re like most of us, then turning yourself into a smart buyer would do more good to you and your love ones.

THREE SIMPLE GUIDES TO BECOME A SMART BUYER
To become a smart buyer one has to ask at least three questions before making a purchase.

(1) Do I really need this item?
If you have something similar at home that is still in good condition then you don’t really need to buy the item. If you have enough spoons, forks, glass and plates at home (even if you have guests) then you don’t really need to buy those kitchen utensils even if these are on sale for 50%, unless you want to go into a catering or food business. That is being a smart buyer.

(2) How soon do I need this?
Granting that you do not have anything like this item at home, and you can really use it then you need to determine how soon do you need the item. If you don’t need it soon then it is smart buying to forgo the purchase. Instead you can invest the money into something so that it will grow. Remember that money has a time value.

(3) Can I afford this now?
In order to become a smart buyer you need to keep a budget. If your budget states that you can only spend P500 to purchase an item for now then it is not smart buying to buy a P800 worth of teapot. It is smart to keep the P500 in a safe place and wait for the next payday when you can add P500 to the money you save today.

Being a smart buyer means you discipline yourself to follow your head and not give-in to your wants and desires or to the wants and desires of those around you. If people start calling you stingy, "kuripot" or "tihik" then think about this: Would you rather be called names than be a person who collect items that you won’t need or worse be a person who looks well-off but in reality is buried deep in debt?

Make the wise choice, be a smart buyer today, and 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.