If the adage of knowing thy enemy is true, then perhaps we can learn from that in the context of money. Viewed as a means to our wants and needs, some of us are caught, in not even the rat race–but a hamster wheel–a veritable cycle of constantly trying to make money for our ever-emptying coffers. Taking a moment to understand our attitudes toward money–how we view it, earn it and use it–could supply us with insight on how to begin managing and stop from simply surviving from paycheck to paycheck. Financial planner Gladys Jose shares some quick tips:
- Cash is King or plastic magic? When you buy big-ticket items, ask if you get a discount for paying in cash or straight charge. If there is no price difference, take advantage of the deferred payment arrangements your credit card offers.
- Want to go on a little credit card swiping spree? Study your credit card bill, take note of your Statement Date. If you want to maximize your leverage, use your card after its Statement Date. This means that your purchase will be reflected in the next billing cycle. This is one way of prolonging the periods between payments, but still–you have to pay the total amount due on or before the due date. It might be good to set a reminder either on your mobile phone or laptop a few days before your due date so you don’t miss it.
- Buried in credit card debt? Prepare a letter for your bank, requesting for terms on how to settle your credit card debt. With all earnestness, request that you just pay the principal amount–the amount that you really owe (not the entire amount including penalty charges and compounded interest). Be very honest with the amount you can pay. For example, you will pay off the debt by paying a certain amount over a certain period of time (i.e. PHP 5,000 for 18 months). Submit the letter to the nearest branch of your credit card company and have it duly received. Keep a receiving copy, indicating the date and who received your letter. Surrender your card (you don’t want to keep incurring more debt by using it, and it shows your sincerity in paying your debt). If your request is granted, pay off your debt according to the terms you agreed upon. If you are required to issue post-dated checks, be mindful that that you can be criminally charged if your checks bounce. Also, take note of the clearing time for the check that you will issue.
- Do you receive your salary once a month and barely survive until the next pay check? Divide your salary into four envelopes, and use up only one envelope per week.
- Shopping for gifts? Make a list and start as early as you can. Try having a gift box ready. Take advantage of bazaars and sales before the holiday season. If you can’t find the perfect gift, why not do do-it-yourself? Bake, cook or make something! Gift yourself a new skill and attend workshops to learn different crafts (like here, ahem ahem). It’s like hitting two birds with one stone. You learn something new and your creations can be given away as gifts to your loved ones.
- Want to save but can’t seem to do it? Automate your savings, arrange with your bank that a certain percentage of your income goes to a different account or a financial product like a mutual fund.
This list was prepared by Gladys Jose, financial planner (and crochet enthusiast). Check out the Financial Planning workshop she’ll be giving this weekend. Details and registration here.