Someone recently borrowed money from me. He says the P5,000 was for his rent. He earns P35,000 a month. It turns out he used his rent money to buy a new phone. I lent him the money, but made a mental note not to come to his rescue the next time this happens.
Listen up, everyone.
IF YOU HAVE TO BORROW MONEY OR CHARGE IT TO BUY IT, YOU SHOULDN'T HAVE IT. Please, stare at a marshmallow every morning and try to delay chomping on it.
I opened my first bank account when I was in grade two, depositing some Christmas coins and gleefully staring at the (unbelievably pitiful) interest it earned. Hey, I was a kid, gimme a break. It made me feel good.
Let me share a few tips on practical spending so you won't have to borrow money from me or anyone. Consider this my contribution to world peace.
1. Do the math. How much do you earn in a month? Divide your income (minus tax) by 30. (Let's say you earn P1,000 per day, clear of taxes)
2. Compute how much money you pay for rent, utilities, communication, transportation, food, etc. (Let's say you spend P400 for these per day)
3. You have P600 free money per day.
Now that the numbers are out of our collective hair, imagine how much you have per day. The basic rule is that you never spend beyond it. If you want that cellphone, save your P600 per day until you have the money for it.
Buy things that will make you earn more. If you like photography, find out where you can submit pictures before buying a camera. If you're a writer, geesh, you ought to have a computer at home.
Avoid people who never share their piece of the tab. They're not your friends. They're freeloaders who see you as a ticket to a free meal.
Invest in things that will make you smarter. Your knowledge increases your worth wherever you go or seek employment. Subscribe to Time or Newsweek or whatever it is you want to read. Subscriptions are cheaper.
Don't buy things now thinking you can charge it to your income next month. It never works. That's counting chicks while seeing eggs. Wait until you have the money in your hands.
Don't, never, get a mistress. They cost money and time. Your time is better spent earning more money or taking care of your family. This saves you from the drug rehab expenses for your neglected kids in the future. Or from the cost of additional college years you'll have to absorb because your kids squandered their time fooling around, unguided, while you were cheating on your spouse. It also saves you from annulment costs or alimony. It saves you from losing the house you may have to leave behind, which the offended spouse will surely get and nag you or the courts for. It also makes for a better family and a better society. I'm sure that sounds like a line from Ms. Congeniality (which I'll never be) but if you do the math, it is a sound argument.
Get a health insurance. It often costs just P500 per month and that's a thousand times less than what you will spend if you get sick. Example: I spent P10,000 on a lab test for my blood to find out if I have hyperthyroidism. The health card which I used to cover it plus other charges, only cost me P6,000 this year. By the way, I have two health cards. And yes, I have hyperthyrodism. Anyone here knows a good doc for it?
Get a pension plan. It will give you your money back in ten years, but that's better than nothing in your old age.
Invest in real estate. Own a piece of the earth. A lot in Subic or Cavite can cost you say, five thousand pesos a month, but it will surely double in value after a few years.
Spend for entertainment. If it's the movies you want, set aside money for it. Relaxing makes you a better person, but the cost should be minimal and within your budget.
Travel. It's not a vice, it's an investment for your brain. The greatest dodos I've met are those from first world countries who never used a passport and a visa. The more you widen your horizon, the better person (and worker) you will be. You solve problems more ingeniously, having benefitted from the practices of other peoples.
Travel to a new place once a year. It will prod you to earn and save more to see more.
Junk the credit cards. Aside from the punishing, bankrupt-inducing interests, it is likely to make you irresponsible if you already have the tendency to splurge. It also goes against the argument I made earlier, of spending only the money you have. I use my BPI Express Credit ATM here and abroad. It's cash on the go.
Keep two bank accounts. One for the bills, one for the savings.
Are you comforable with your lifestyle now? Are you happy with it? Then don't change it even if your new paycheck has a gazillion zeroes. As I keep saying, hindi iisa ang araw. Remember the lessons of numerous economic upheavals.
Never earn money illegally. Money you didn't work hard for has no value. In the end, your worth as a human being and as a worker, is determined by the value of your name.
No matter your economic status, be honest. The money will come.
Love your money. You worked hard for it, spent time and weathered pressures for it. Spend it wisely, let it enrich your life. That's the best thank you we can all give to the Big Boss Up There who gave us another day to work and have fun.
No one taught me these. But when you come from a background of extreme poverty, you find ways not to go back there. You have to.
I love having the capacity to buy fish.