Tag Archives: personal finance

Much Ado About Money

When I reached 35, I started becoming paranoid about money — more specifically, the lack of it.

financial-stability

I was afraid that I will reach fifty years old, with nothing to my name, stuck in a dead-end job and still existing hand-to-mouth. After witnessing first hand how people can be desperate when they have nothing no one else turn to; I vowed to be more responsible when it comes to my money. I became more appreciative of banks, of maintaining savings accounts  and of eliminating debt as much as possible.

Three years on after I made my vow to be more financially-savvy, I am still a work in progress. I still don’t have the following, which was included in my three year financial stability checklist:

  • Emergency savings equivalent to six times my current salary
  • Stock market options
  • Mutual Fund
  • Freedom from debt!

But the things I managed to achieve out of these three years – I worked hard for: I am now paying advanced amortization for my own condo unit; I have a life insurance that is now money-earning and set to mature when I turn 50 and I am working hard to maintain a healthy balance to my savings account, currently stashed safely in my trusted bank.

The savings account is a painful work in progress, as I tend to withdraw money just a few days after transferring them to my savings account. Following the current spate of worrying incidents concerning banks, a good friend — who knows my current financial journey, asked — do I still trust banks?

Well, to put it bluntly, — when it comes to money — I trust banks more than I trust myself and other people.

how-much-are-bank-ceos-paid-we-have-the-answer

Banking institutions spend millions of pesos to keep my money safe; and operates based on a strict code of conduct as dictated by the Bangko Sentral ng Pilipinas (BSP). They literally do business according to the watchful eye of the people, the government and the organizations they are a part of.

If I keep my money stashed away in my sock drawer, you can bet that I will manage to spend all of it as soon as H&M announces its latest Sale schedule. Burglary, threats of fire and other man-made and natural disasters are all threats to savings kept at home.

Recently, there was a big scandal when a bank employee was caught trying to siphon P17Million from a Union Bank in Pasig City, via an unauthorized cash transfer. The fact that the employee was caught says a lot on the impeccable security systems in place and the prodigious auditing and monitoring of the bank.

First, the woman was either too stupid or too brave for her own good, to even think about pulling off the caper. I mean, seriously? Come on – in this day and age where financial institutions have three-fold measures in place to fact check, audit and monitor to prevent fraud, does she actually think that 17M worth of money transferred will not raise red flags?

If my mother, who sells snacks as a side hustle, can keep a monitoring sheet to track her earnings – I am a thousand percent sure that any bank will have more than a monitoring sheet. The fact that what happened is an isolated case, one that gets caught immediately, tells about the how redundant security measures are in place.

If you ask me, there will always be threats directed towards financial institutions, considering the money they carry and manage at any given day. But, I take comfort on the fact that banks will always have has layers of redundant security, and expertise and then even insurance to protect my savings (no matter how measly they are). So yes, I’d rather have my savings money kept in the bank where I don’t have to worry about them.

As I continue on this financial journey, I’d rather focus on hitting my goals. Hopefully, by the time I reach the big 4-0, I would be more financially-fluid and more financially-savvy: a more debt-free existence, a healthy savings account kept in banks, a mutual fund for future expenses and a living in a condo bought by my hard-earned money.

They say it’s crude to think about money; and it’s bad taste to talk about your financial goals; but in my opinion — nothing is more unfortunate than growing old and still not being financially prepared.

 

 

 

Advertisements

The penniless has no pride

I have always believed that the poor have no right to get all proud and mighty. This can’t be more true with my current situation right now. I am so broke that I have spent the last two days holed up inside our room trying to think of various money-making schemes, scouting the net for possible freelance jobs and dreaming of the time when I will finally pay dirt and win the lottery.

image not property

I don’t know how I manage to lose money faster than I manage to earn them. I figured it must be the bills, the money owed to people, the daily cost of living and the occasional sense of what little luxury I can afford myself. It did not help that I am currently in the middle of a really bad fix and going through one of the roughest patches of my life. Salary day is still a few days away and there was still the usual worries of everyday expenses.

What can I say, grown up problems suck.

The funny thing is people think I am a trust-fund baby…that I have this unlimited bank account where I drew funds for my Japanese magazines, my travels, my fixation for cute shoes as well as my numerous books that I don’t get to read. I didn’t realize that I give off this vibe not until I was informed by a good friend that our colleagues have the impression that I am rich. The idea amused (yet never flattered me), how can this be–when I never owned anything that vaguely resembled a name brand, my clothes were mostly thrifted and would never cost more than 1,000 bucks a piece.My only indulgence is my hair coloring which happens every three months, or if my roots become annoying. My travels is made possible by saving up for eleven months, in order to spend the rest in a matter of week outside the country. I never owned anything of value, except my laptop.

I never spoke in an accent, nor the annoying colegiala, lilting way common to people who were manor born. I studied in a public state university where my semestral matriculation amounted to no more than PHP400, the usual cost you spend for a solo meal at Brothers Burgers. I had an exclusive, Catholic secondary education but four years were spent as a regular fixture on the promisory note list.

So when people at the office assumed that I was rich, and that they can borrow money off me, I am a bit confused and amused.

Being broke made me realize that you do not have business being proud when you have no money in your pocket. You swallow your pride and ask your mom to loan you money, promising that the debt gets paid by end of the week. You swallow whatever toughness you have in you, the painful words you get to hear and you are reduced into a stuttering idiot, extending her hand for whatever dole out that is available.

Last night before sleeping, I caught myself telling Him in my prayers, “I will never spend hard earned money on things that can get easily replaced.”

She works hard foh the money

Early this month The Hubby and I were talking on how we can further augment our income.
Don’t get me wrong, the money we earn as corporate slaves do pays the bill and allows us to buy things we need — but with plans to seriously look into building a family of our own, we need to earn extra cash.

So, the best solution (and most logical at that) is to start accepting freelance work for writing and PR purposes, things I could do as soon as I arrive at home from the office, and would only require my brain, a laptop and a good internet connection. This is the solution I arrived at since I am not the type of person who’d get rich selling various stuff (for Pinoys, it’s Avon, Natasha and all other stuff that required the use of a product catalogue, glib of tongue as well as endless patience (to collect the payment). I also didn’t want to do something that would violate office ethics of my current workplace.

Hence, starting last week, I’ve started doing some odd stuffs (letters, reports, etc) for one of the raket endorsed to me by my sister. The work load is easy and its something I could do in my spare time (meaning, 9PM to 12 midnight) which I often spend idly anyway — might as well earn something and do something productive)

I’ve been contemplating on buying a good laptop (via installment) so that I could go full blast with my raket and eventually accept future freelance writing jobs in the process. But as soon as I still don’t have the funds for my laptop, I am subsisting on a borrowed Dell Vostro, as well as good old lakas ng loob. My only motivation is the thought of earning extra–something which will eventually go to my little family.

With God’s grace and guidance, I know I can do it. He’ll find a way when everything seems to be impossible, and in vain.

That evil plastic thing

When I was younger, I thought having all the material things in the world would make me a lot cooler. I was such as stupid kid.

So when I started earning money, I became obsessed with having that “successful” world–which I then blidly equate with having the latest phones, accessories, clothes and a lot of stuff which, of course I do not need at all. And since my take-home pay is not enough to pay my bills, answer my obligations at home and fund my stupidity, I resorted to using credit cards.

That became my downfall.

evil

Of course, I paid only what I could–the minimum. And while it can decrease my total amount, this remained insignificant as I use the plastic again whenever I feel bad and resorted to shopping to boost my mood. This became an ugly cycle.

Finally, I woke up and realized how much shit I put myself into. I started paying bills, left and right–even if I have to suffer from lack of finances in the process. I was literally broke every time. I came to my senses when after pay day, I paid all my bills and literally came home with a thousand pesos left in my pocket–with 15 more days to go before the next pay day and with obligations waiting for me at home.

Now that I am married, I am starting to fix my personal finance. Just this morning, I came across Ready to be Rich, a website which discusses personal finance. I immediately linked it to my blog and started reading the articles. As someone who is basically clueless when it comes to money, having a reference point gives me the motivation to continue on fixing my personal finances.

I also came across an article on credit card debts, I am reprinting it here for your reference:

What happens when you don’t pay your credit card debt?

What happens if I don’t pay my credit card debts?
When you default on your payment, the bank will flag you as a delinquent card member. They will call you to remind you to pay.

If you continue your non-payment, the calls will be more frequent until you reach a pre-determined number of missed payments. After which the bank will dismiss your case and turn your account over to a collection agency.

The collection agency is not a part of the bank. They are a third-party business who buys the delinquent accounts. The collection agency will now take over the responsibility of convincing you to pay your credit card debt. Whatever they collect from you becomes their profit.

You said collection agencies BUY the delinquent accounts?
Yes, the bank sells the accounts to them. This will minimize the bank’s loss. The costs (legal and otherwise) that will incur if the bank continues to pursue the delinquent account can be expensive. Asides, it’s not worth their time anymore – that’s a simple way to explain it.

Furthermore, the bank cannot just freeze and take the money in your savings account to pay for those debts. They would need to have a court judgment against you to make it legal for them to do that. And that will again, cost them money and can take a long time.

So what happens when your account is turned over to a collection agency?
Then it just remains there. The collection agency will do their best to convince you to pay because that’s how they will make money.

I know there are a lot of horror stories when it comes to credit card debt collection. That’s a sad reality that many people around the world actually experience. The best thing to remember is that all those are just empty threats so stay calm and don’t worry.

Read the rest of the article here

Credits
http://www.fitzvillafuerte.com