A Filipina Mom Blogger

My family is no stranger to financial challenges. If there is one thing I often brainwash my children is this “No matter the state of our financial situation, we need to implement some sort of money management or else all that money will be gone in an instant”. During our early years in marriage, my husband and I often fought a lot in our spending habits. He tended to buy more than needed. I tend to be a tight-wad which often resulted to arguments. It became so bad that my husband took control of our finances from 1985 till 2004. Bad move indeed. We ended up having severe financial challenges in 2004 until I took control in 2005. Call it martial law but hard times called for drastic measures. He turned over all his declared income to me while I kept mine a secret. hehe.

Under my strong-woman rule, I imposed some rules to my family which my loving husband adapted nicely too. He had no choice, right? Let me share a few of my rules which might be useful to you because I know each family sets their own rules:

1. First, let’s set up priorities: know our regular expenses. Take critical look at our expenses and remove out those that don’t give real satisfaction.

The number one priority is food, housing, education and clothing but then again there are limits to this. Junk food is definitely the least priority. Buying luxurious home decors is also a no-no. What about clothing? Let’s not buy branded items at all. When it came to education, the priority is the state university if possible. Oh yes, I forced Marielle to enroll in the University of the Philippines (much to her protestations) after she had difficulty choosing schools.

2. Limit use of Credit.

We canceled a total of 3 credit cards and kept one credit card each together with a local credit card (BPI credit card).

Using a credit card is not all that bad. In fact, whenever we get a housing loan, these loan companies check our 6 month credit card statement to see how good we are in paying our credit on time. Even the US embassy takes a look at your credit card history (when you bring these documents over but they don’t keep it of course). So make sure your credit card history is solid. What we avoid is buying on impulse.

3. Put a plug on those spending leaks

Impulse buying–frittering away small amounts here and there on “little” things–can add up to a surprisingly big amount.

• Avoid shopping for groceries when your tummy is grumbling. You’ll buy more of those tempting treats that can run up your bill.
• Avoid “killing time” in the malls. (You’re sure to come away with something you hadn’t planned on buying.) Use a budget and keep within it. Once you can resist the temptation of spending “small” amounts, you’ll have more money for the things you really want.
• Avoid eating out for dinner and instead, let’s have home cooked meals.

4. Don’t be careless when shopping

There are always pressures on us to buy things. Our wants are greater than our needs. And media help exert this pressure. This leads to buying things we don’t really need and to buying without comparing values and prices.

Before buying, know the dealer and the store’s reputation. Read labels, understand warranties and contracts. Avoid pressure tactics by salespersons. Buyer beware is a golden rule to follow.

Identify your weakness and declare a moratorium in buying it. If your weakness is shoes, for instance, commit to stop buying a new pair in the next six months.

Oh, I just remember how my husband bought a whole set of encyclopedia when the salesman complimented him on his good looks and how he looked so similar to this popular basketball player. I was so furious.

5. Save even just small amounts.

When Lauren started to work, she suddenly found herself spending her salary. To encourage her to save, I demanded rent from her. I told her that saving just a little will amount to big amounts in a few months. Recently, I noticed that she saved her income for possible purchase of a real property and travel abroad.

6. Establish cash reserve

Financial experts recommend that every family create a cash reserve of at least 50 percent of their annual income. To acquire this means developing good saving habits and self-restraint in spending. There is a definite need to save so you have an emergency fund when unexpected expenses arise.
Having a savings account enhances one’s credit standing.

My dad was very good at maintaining liquidity. I fail in establishing that 50% cash reserve because I placed some of our cash in investing on real estate. Though not as liquid as cash, real estate investment protects me from two-digit inflation.

I think I might have ingrained the saving thing too much when I told my 2 girls that I planned on having my birthday dinner next week in a restaurant. I thought they’d be happy that for once, we will be eating out. I never expected their reaction.

Mom why make other people rich? Let’s just have dinner at home!

I was surprised, But we barely eat out for dinner! It’s a treat and it happens only once a year.

Their firm response: Mom, dinner at home is so much better! Let’s save.

ngek.

There are many ways to live within our means without scrimping our lifestyle. How have you managed?

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