Finance 2.0.0 Increase Funds

Even when you are currently earning enough for your daily needs or living a frugal life you still thought about increasing your funds. Right? Or… right? So, why is there a need for doing it? What are some of the things you can do to realize it? Is balance in life a part of the equation? Let us see.

A Need for Increasing Funds

Honestly, while drafting this, I have to literally ask myself, “Bakit nga ba kailangang mag-ipon at dagdagan ang pundo? Para saan?” [Why is there a need to save and increase funds? For what?]. There are a lot of answers and it depends on your personal values. But, let me compress it into three reasons that could hit some of your personal reasons. These are: future expenses, getting rich, and uncertainties.

Future Expenses

There are various future expenses you might consider. It is so diverse that some are necessities, while others are just for convenience – and, even for some people, lofty reasons (whether you admit it or not). Some are of small amounts. Others are of great quantities. Perhaps you are thinking of building or buying a house. Or, maybe, you want to buy that dream car of yours. How about travel goals? Or, you want to marry? Not that you are going to buy your partner, haha – I mean, wedding comes with a cost and even marriage, especially on its onset. If you already have kids, setting aside educational fund might help. Have you watched the effective ads saying you need to buy an iPhone or a Galaxy? The list goes on and on, and on – adding up to reasons to increase funds a need. Having no money for future expenses, especially the planned ones will leave you breaking the bank – or your wallet, figuratively, of course.

Getting Rich

Just like what I stated above, people have different reasons due to different values. So, who are we to question those people who want to get rich? On another side of the coin, getting rich is somewhat vague and, maybe unattainable. Let say, if getting rich means one million pesos and you attained it, it is usual to want more, isn’t it? So, set your definition and find the balance – something we are to consider later in this post.

Uncertainties

So, you are earning sufficiently enough. So, you can buy all the things you need – and most of what you want. You are healthy, fit and strong. But, until when? Well, don’t forget uncertainties are inevitable. Sudden expenses come in – from thing-breaking needing repairs to heart-breaking events. (Let me just point out that gadgets are not included here.) Some of these will break the bank, so to speak. You might end up closing your bank account, selling some of your properties or resort to loans – ehem. Some people may argue that it will less likely happen. Exactly the point, there is still the likelihood that it could happen. It is better to save some in order to spend some when uncertainties strike.

Some Things to Do to Increase Funds

So, with all these reasons and some of the reasons that cross your mind – what can you do to increase funds?

Save Before Spending

One of the common things to do to increase funds is to save before spending. Are you familiar with these formulas: income – expenses = savings and income – savings = expenses? Well, they are mathematically equivalent, but let us uncover the psychology on it. The first means, after receiving your salary – the income – you budget it right away to your expenses and save whatever is left or worse you just spend as long as there is some cash. The latter, however, means you set specific value to save, then whatever is left you budget it among the usual expenses plus contingencies.

Extra Income

If saving before spending still results to unsatisfactory increase in your funds then you may consider looking for extra income. There are a lot of options and has two types – active income and passive income. Active income comes from your job needing activities that translates into funds – day job, selling items, food-cart attending – basically this is when you are working to earn. On the other hand, passive income comes from which only needs initial activities but does not force you to work to earn, later. Basically, leveraging is a must in here. You only need to establish the system so that the system will work for you later. A food-cart will do – that is after setting it up, training your staff (to do the job and be honest, if possible), and promoting it from time to time. Same is also true for other business type – transportation, internet, buy-and-sell. Networking scheme also uses leveraging – this is fine as long as the scheme will not turn into scam. Be cautious in considering this, though. Study how the system works. Determine if you can benefit from it, instead of “it” benefiting from you. Crowdsource. Asked some feedback. Weigh in.

You might also consider paper assets – unit investment trust fund from banks and mutual fund from other financial institutions, bonds, stocks, or bitcoin. If that sounds out-of-this world, be on the lookout for my blog post about it. Some types, like money market funds, bond funds, balanced funds, equity funds will be differentiated along with your personal condition especially how you look at paper assets. Likewise, net asset value per share/unit will be considered since some starters have some misconceptions about it.

However, what if you are very busy or those suggestions do not fit your condition? Or, for whatever reason, you are unable to do those? You might consider looking for another job – quit the current, look for better one. If that’s not possible, have the next suggestion on your list.

Cost-Cutting

Yes. Consider this: cut your expenses – at least tightened the budget. There might be something you spend for that needs to be cut – stopped, that is – or at least minimized the budget for it. You might consider travelling less or eating out less. One way to find out where to cut cost is to monitor your expenses (one of the things I do, strictly). List all your expenses and from there you will know where to cut. Look out for those small, yet frequent expenses – a small tear on a bag of rice will eventually drain everything. On a commute? How about planning your route? How about walking some distance especially when it’s near. Eating out? How about packing your own lunch or eat heavy breakfast to eat less on lunch time? These are just suggestions you may consider. You are that person who can precisely decide on where to cut cost – just be honest and it will be a smooth process.

More? You might have some tips in mind that you want to share aside from these – save before spending, have extra income and cut some costs. Please do drop them in the comment section.

Balance While Increasing Funds

Alright, you are slowly increasing your funds. You are saving more and cut some costs. But. But. But, you are not eating right. You dropped some weights, badly (unless it’s on purpose). You are tired upon reaching your workplace because you walked a mile or two just to save. And, oh, you sold some fish-balls last night. You even cut your kids’ allowance without them doing something wrong. You now it’s not balanced anymore. Yes, you increase funds along with some problems and issues you have to deal with.

Well, one of the things mentioned earlier is to monitor your expenses. This is not just to know where to tighten the budget. It will also help you analyze your lifestyle and determined what should not be compromised. One factor to consider to know if you are unbalanced when it comes to funds is to remind yourself about your goal. What is the main reason you are doing it? Are you preparing for unwanted uncertainties by increasing its likelihood? Like, you are saving in case of illness and you work so hard and get sick eventually? Definitely not, if your sanity is still intact, haha. So, know your limit, focus on your goal and do not compromise the important things.

Hopefully, you learned something from this blog post – or at least will learn something. According to some psychologists on learning, learning happens when there is a relatively permanent change in behavior. As somebody who is relatively new in sensitively managing personal funds, this may not be so simple – but I will be diving into this further by relating my personal experience on future blog posts. This might give you ideas or I might get some attention of those people who know better and modify my way of thinking. Please don’t hold back from reaching through the comments below.

Thank you and be on the look-out for more posts, here in SepChronicles.

Finance 1.3.0: Planning for Financial Freedom

If you fail to plan, then you are planning to fail. That usual cliché says it all. Who would like to fail? I mean, who on his or her right mind want to fail? So, if you have no plans regarding your finance, it’s time to make one. Start with the long-term goal (let’s call it the VISION), then the short-term goal (let’s call it the MISSION). It will be easier to go on to details after these (let’s call these details the OBJECTIVES).

VISION: TO BE ABLE TO ATTAIN FINANCIAL FREEDOM. Some financial educators might argue that there is still financial abundance, but I guess my mentality is not there yet. Make the vision realistic and doable.

MISSION. As of this writing, I am considering four layers to accomplish – and this FINANCIAL CHRONICLE series will rely on this four layers. I learn the concept from different people, so I will just use the term I am comfortable with. These are (1) INCREASE FUNDS, (2) MANAGE DEBTS, (3) SAVE AND INVEST, and (4) HAVE FINANCIAL PROTECTION.

Since objectives are detailed steps, I will be covering these on separate sections – depending on my MISSIONS.

This Chronicle is made public, not just to relate my experiences, but also to receive criticisms from others. At least, if I still have dangerous mentality, it will be corrected and may help others as well. By the way, this is Sep.

Finance 1.2.0: Exposing the Bad Financial Decision

Bad financial decision roots from misinformation. We gather it through our society – be it in the family setting, the school, even the entire nation through culture and traditions. What can you observe from our society? Some financial educators mentioned what is called “poor mentality” where financial management is given the least importance. In my case, what are the contributing factors, then, to my bad financial decision? I will consider just three.

CONTENTMENT AS I VIEW IT BEFORE. Before, contentment means being happy with what you have. There is no need to work harder or smarter. Apply for a job, receive your salary and save if a penny remains. It is okay not to have sufficient funds for the future – you don’t have to worry for it. BE CONTENTED WITH WHAT YOU HAVE RIGHT NOW. What’s the danger? No funds in case of emergency.

MONEY IS NOT THAT IMPORTANT. I had this mentality that you can be happy with less money – at times, I still find it true. But, when there are more reasons to feel the otherwise, I know that money can do something. My belief on this also root from my experience that fortunate things happen when I need money. I managed to finish college through financial assistance – not from parents nor from relatives. Likewise, I survived three years after college even with very small amount on my bank account. Never did I realized before that learning about money is VERY, VERY IMPORTANT.

WORK FOR JUST WHAT YOU NEED. Relative to contentment, I also did not tried harder earning funds. I let many opportunities pass just because I thought I will not be needing much soon. I should have experience working in a retail industry, in banks, restaurant and others that should have improved my skills and add up to my value – and the value that I can provide others. But… yeah, I DID NOT.

The mistake, or mistakes?

I DID NOT START EARNING EARLY. Except for what I did when I am schooling – after graduating – I did not forced myself to earn. I did not exert effort to learn anymore. I thought I was smart enough to live the CONTENTED life I aspire. I should be financially free right now if I started early. Well, the next one is a must.

I DID NOT INVEST ON FINANCIAL LITERACY. My course touches some of it – making me feel stupid, tanga. Is it correct? Tanga means doing things in contrast to what you should know. I know about how interest works. I know how time and money can work together. But, I think, I did not learn because learning means changing behaviors – and my behavior towards money did not.

I LET MY FUND SLEEP (OR DEAD) ON SAVINGS ACCOUNT. Related to my being tanga, I just deposited the money that I am able to spare from expenses to be on my savings account. Aside from emergency expenses, inflation also eats up my savings – very, very fast. In the Philippines where I live, there is an estimated 3-5% inflation rate - this September and October 2018 it even reached 6.7%. The small savings went even smaller in value.

I RELIED ON MIRACLE. Just like what I narrated, I seem to have something to get what I need. So, I thought, it will be the same over and over. I thought, there is a financial hero coming in for a help – it could be that one who gave educational assistance or through hand-me downs from kind people. It was proven wrong when financial crisis kicks in, it was disastrous.

Looking back, I blame myself for not doing the good decision. Again, I am still clueless why I am still sane (or am I not?). Well, there are some cases I talk to myself. In some occasion, I wake up at 2AM and tears just… you-know-what, sometimes for no reason, most of the time finding out the reason makes it worse. Include those problems that are non-financial, then, yes, it’s easy to go insane. But, shifting my attention to the brighter side, if you consider it is, I think I know better now. It’s inevitable to think what could have been or what should I have done. But, I guess, it’s better to think about what to do, now – now that I made a bad decision. I remember that one person who told me to capitalize on that experience to be better.

I will be covering that on the next section. Here, on my Chronicles.

Finance 1.1.0: The Bad Financial Decision, Made Obvious

The steep decrease on August 2016 was obviously the disastrous event that happened to me, financially. However, I should take a clue from slow decrease from January 2016.

Sometimes, you will realize that something is bad if the result is bad, as well. That was just what happened.

Before my eighth year on my job as a five-month-period contractual employee, it was made known that contractual employees will not be renewed. Regularization is dependent on possessing a masters’ degree. I have difficulty filling in my time-table. The work environment became so toxic, I mean very busy, that I can’t bear – regular workload, extension activities, other clerical work and obtaining a masters’ degree. To worsen, a family member got critically ill. As a not-so-good, yet not-so-bad son, I have to help financially. Just like most people… yes, I was caught unprepared. The money I had saved almost disappeared in a snap – that’s not an exaggeration. It happened when we settle the hospital bill. It happens in just one night, since we wanted our family member to be discharged from the hospital to avoid higher hospital bill. Since it is a critical illness, the expenses did not stopped there. Is there any help? Our relatives, likewise, have their own expenses. They also get sick. Somehow, they handed some amount to help. So, I resort to applying for loans, try to sell some items and ask some people to let me resell their items. The experience clearly defined what being broke means. I contained all of those and I am not sure how I made it – I am not even sure of my sanity.

Did you finally spot the bad financial decision? If you are still clueless, I will cover it on the next section. Piece by piece. This is my financial Chronicle and I am Sep, by the way.

You may also read the mirror blog at @sepchronicles

Finance 1.0.0: The Making of a Bad Financial Decision

My bad financial decision is written all over this article. Are you thinking that I will be mentioning it outright? I’ll make it a bit interesting (hopefully). But, to give you hint: it has something to do with culture. This is quite a long story, so grab some popcorn.

Our family’s financial status sits below the poverty line set by NEDA (National Economic Development Authority). I discovered it upon seeking a financial assistance. However, we seem to get what we need. We were raised with contentment in mind. We never have our own family computer (a gaming console), television when we were young and other things that other people consider a necessity. I remember harvesting crab on a river with my elder siblings and sell them, sell salted egg, and I-forget-some to have some cash.

My parents managed to send me to high school. I also received support from relatives for my school supplies. But most of the time, I recycled the old ones. Since my parents cannot send me to college and that my well-to-do relatives support others, I searched for some financial assistance programs. I was pleased to have some. I was financially independent since then, I even had a share for our family funds. I was able to buy all the things I need and some things I want.

I was not able to land a regular job right away for the following reasons: I am not so intelligent, not so smart, not so hardworking and not so skillful. Obviously, it did not result to what people call “flying colors” status of success. So, I end up doing part-times: computer-shop attendant; computer personnel of a local center of an international company; and both a private and center tutor. I think I earn too small. But, looking back, I never felt I am lacking. It strengthen my belief that MONEY IS NOT THAT IMPORTANT. I do not have savings. I do not think about the future finances. As long as I can buy what I need, then it is okay. Very okay.

Three years after graduating, I finally land a contractual job in a state university. It was quite a tough decision since I have to reject an offer from a bank to be a roving teller. The easier part was just an assumption – work for only 40 hours a week, no work on summer, and better benefits. Setting aside other noise, I felt accomplished financially. I earn more, and yes I spend more. I still have the family culture, so I really don’t spend much on what I want. I cannot avoid saving, since I have more than what I can spend. You might guess it – regular savings account is what I meant by saving.

Along the way, I read about concepts of investment… and then business finance… bonds… stocks. But, I never read ahead, I never really seriously think about it.

I already did the bad financial decision. Can you spot which one? The next section might give you the idea if you still have none.

This is Sep and this is my financial Chronicles.

Finance 0.0.0: Foreword on My Personal Finance Journey

Money. Finance. When have you started thinking seriously about it? What do you know before thinking about it seriously? What made you consider that it is important?

We have different answers for those questions – answers that are dependent on our experience. My answers? I started thinking about it seriously when I realized that I made a bad financial decision. Before it happened, I never thought that it is that important – especially when I compare it to real happiness. I considered it as important because I experienced to be broke – and I am still in this situation. In my opinion, there is only one way to get up and avoid the circumstances I have gone through – circumstances that even those people who are close doesn’t even know. There is also a large contribution of some Facebook community I joined afterwards – and some people who give encouragements – to make me think positively despite the negative experiences I had gone through.

I will be relating that bad experience on the first part of this series – after this foreword. You may skip that, but that part will give you the idea why I am starting to take responsibility of my own finances. Next to that, on this series, I will be writing about: increasing funds, managing debts, savings and investments, and financial protection. The discussion will start with the concepts and information I gathered from my inspiration (proper credit will be given), how I implemented it to my own, and what are my resolves in the future.

Through this series, I am hoping that experts will help me along the way and that some people who also experience the same will draw inspiration from it.

Honestly, this is the most important topic of my Chronicles – again this is Sep.

Waking Up My Chronicles

It was about seven years since the last update – and it was not even a worth-to-read post. Surely, getting up from a long sleep is both difficult and exciting one. It is synonymous from that morning right after a tiring evening – some of your senses are wide awake (my ears are usually the firsts), yet it’s too difficult to get up from that comfortable bed. However, you have a lot of interesting things to do.

That is just exactly how it felt upon writing this. I want to write everything here, but it may hold you back, my reader(s) – if I have one, from reading it. So, I’ll keep it short by citing the things I would like to write about for the next posts.

A lot of things happened and I was directed to different discipline that might be of your interests. The old interests are still here – music, photography and gadgets. The new ones include a bit more serious – personal finance, health and some academic articles.

Hoping to have fruitful blogging for the next months. Drop down your comments if you feel like we have something to talk about.

This is, again, Sep and these are my Chronicles.

P.S. You may want to read my past posts. Just to remind you, though, there are things that changed.