Spend less, earn more.
With so many attractive things in the market, who can resist buying new clothes, shoes and gadgets? I raise my hand up. I can!
This came in the mail today.
I did not request for one. It came with a booklet with terms and conditions. Oh, come on!
If someone hands me a credit card where I do not have to pay annual fees (or beg for it to be waived), be my guest. For now, I love the feeling of real money in my hands. I had to call (at my expense) the credit card company to cancel the card.
This is the second time I received a credit card with my name in the mail. They came when I do not have a regular job. Ironic, huh? They want to take control over what little savings I have left in the bank by luring me with “freebies”. This is a trap. Who are they kidding?
Lessons from Suze
Suze Orman came to the Philippines through the invitation of BPI last February. Here are a few things she said:
“If you have credit card debt, what that says about you is that you are buying things that you can’t afford,” she said, urging banks to issue credit cards only to those who could responsibly use credit. (Source: Inquirer.net)
I am a responsible person with it comes to money but I think that the bank who issued the credit card just based their criteria on age of my account in their bank and the amount I have saved. I’ve been their client since 1997. They did not even bother to check if I still have a job or not. I will never buy things just because I want to let people know I can afford them. (Say hello to my 7-year-old Nokia6230i and Canon A510). I never cared for status symbols. I know who I am.
“Parents should teach their children financial responsibility at an early age…there’s nothing wrong in asking adult children who live with their parents to pay for rent or living expenses—even if the parents can afford to shoulder all household expenses.” (Source: Inquirer.net)
I lived with my parents even when I was already earning. (It is a common practice in the Philippines.) However, I was given the responsibility to pay the utilities (power, water, telephone, cable) when I got a my first raise. We all had jobs then yet I never complained. I thank my parents for that responsibility or else I will never know how to manage my money wisely.
“She reminded us that jewelry are actually bad investments and that people buy them only to impress others and not as a real investment.” (Source: rappler.com)
I agree. I know people who think jewelry can save them during rainy days. You can pawn them in times of need but pawnshops only pay a third of its value. You say goodbye to your precious jewelry when you cannot redeem them on time. The only accessory I like to wear is a watch. Now, I do not wear one. (My cellphone has a clock.)
“…start teaching children about money the moment they are born… Kids do not listen to what you say, they do what you do.” (Source: rappler.com)
My parents always had a bank account even if it only contains a minimal amount. When I was small, they opened a bank account for me. ” It is for my future,” they say. When my grandfather needed money and they used the money in my bank account, it taught me two things: I need to save for the rainy days and it is okay to spend money for your loved ones in need. I should not be greedy with money if I have something to share.
With the help of compounding, she said a person who would set aside $100 a month starting the age of 20 would end up with $1 million upon reaching 60. But if one waits until age 30 to start setting aside, the same person will end up with only $300,000 at age 60. This 10-year delay in starting an investment plan has thus cost the person $700,000, she noted. (Source: Inquirer.net)
I do not know how she got her figures or what investment scheme she is imposing. This is something to be happy about. Say hello to me, a (peso) millionaire in 2037. HA! I started working at 19 and, like any employed Filipino, my contributions to SSS and Pag-Ibig are mandatory. I think the monthly contributions were more than Php100 a month. So following her example, we will have several Filipino multimillionaires by 2037! By that time, rice might be P500/kilo and the millionaire label may not be worth anything. 😛
Crunching the numbers
I do have this excel table whenever I need to plan my savings. I used this when I need to buy an expensive item. Please note that the amount is for illustration purposes. I do not have that money.
If you have 100K, and you save 1K/month, you will have P710,000+ in 30 years at 3% interest.
Now if you can find an investment channel that will give you 9%, you will have P1,936,235++ in 30 years.
If you double your monthly savings at 9% interest, say hello to P3,131,000++ in 30 years.
This is quite a fun exercise but I do not get obsessed with it.
After all, money cannot buy happiness.
This is supposed to be Day 13 of the 30-day blogging challenge.