Our budget has become a bit tight this year, but instead of whining around on how little we have and wait for trees to bear money for us, I want to make some realistic steps to save more and spend less. Here are some of the things I read somewhere and apply to myself and would like to share with you. I also want to hear tips from you, people. Care to share? 
1. Pay off your credit card debt
I don’t know with other countries, but credit cards here in the Philippines charge 3.5% interest per month. When you compare it to the interest you get from your savings account which is only .625% to .75% per year, it’s a lot. So tell yourself, ‘It’s unfair!’ and start taking steps. For example, if you have P10,000 sitting in your bank and you have P10,000 loan in your credit card, it is better that you pay your credit card in full right away to avoid incurring charges. If you don’t have that much amount yet, just pay. It doesn’t matter how little savings you have at the moment. What’s important is you are willing to pay. The first step to save is to pay off your debts.
This was my goal last year, but because some things came up and there were other priorities that I attended to, I wasn’t able to pay my balances in full. But I never forgot about it. So by next week, I’m paying my credit card balance in full and by next month, I will be seeing zero! Now that’s being fair to myself, especially that I don’t use my credit card a lot. After this, my husband and I are going to concentrate on his credit card bills.
Oh, and another thing. When you see your card’s annual fee on your next statement of account, call your credit card company and have it waived. My annual fee falls every November. So when I see it reflected on my bill already, I call them right away to have it waived. That’s P1,200 off my next bill! I have my card since 2003. Since then, I only paid for my annual fee once - when I didn’t know yet that I can have it waived.
2. Assign an envelope for each expense
My husband’s payday is on every last Wednesday of each month. This means when the money gets in, we have to plan for a month’s expenditure – not weekly, not every 15th and 30th, but monthly. For example, our salary for the month of February was received on Feb25, and the next payday is on Mar25, next is on Apr29 and so on. Some months have 4weeks, while some have 5. So depending on which month, I have to have a budget plan for 4weeks or 5weeks until the next paycheck arrives.
I have envelopes for each of our monthly expenses. One is labeled ‘utilities’, one says ‘insurance’, the others are ‘Jeff’s allowance’, ‘groceries’, etc. If you know exactly how much you’re paying for a specific expense, write on each envelope the amount intended for each. For example, I pay fixed amounts for our insurance – P3,220. On the envelope marked ‘insurance’, I also wrote P3,220. So each payday, I put the exact amount in that envelope. As well as groceries. I also have a fixed budget for it written on its envelope. Every time I shop, I put the receipts and the change inside it and keep it there until next month. With that system, I don’t miss paying anything, especially the bills.
3. Save what you saved
This is the fun part. If your budget for grocery is, say, P4,000 per month, and you only spent P3,700 for that particular month, you saved P300, right? Now where do you put that extra P300? Perhaps you go out and eat, saying ‘I deserve this as my reward’, or perhaps you buy a shirt or anything you want. Fine. But don’t overdo it. Remember, the objective is to save what you saved, not to spend it. So what do you do with the extra P300? Keep it in your savings account, or if you find it too small to be rushing to the bank to deposit it, put it in your piggy bank. I do. There’s this old piggy bank that Jeff doesn’t want to use anymore so I asked if I can have it and he said yes. (For some reason, Jeff likes keeping his savings in an empty Pringles canister and stopped using the piggy bank I gave him as a gift when he was small. Ssshhh! Don’t tell anyone, but he has over P1,000 there). Anyway, save that P300!
Here’s another example. Jeff’s cash allowance is P100/week (he brings packed lunch and water bottle to school). And because there are months that have 5weeks, I set aside P500 for him every month (P100 X 5weeks). March has 4 full weeks, so instead of P500, I will only have to spend P400 for his allowance. That’s P100 savings that’s coming in my piggy bank!
Here’s my trick. I told you that if you know exactly how much you’re paying for a specific expense, write on each envelope the amount intended for each. Well, it’s not only what I do. I also have a fixed budget for everything, including the expenses with no fixed amount. This includes Jeff’s allowance and the utilities. Utilities mean electric and water bills, cable, internet and phone. My sister pays for the internet and phone bill, while I take care of the rest. There are months that our electric consumption reaches P2,200 to P2,400 when the air conditioning unit is used more. Our water bill reaches P1,500 the most, while cable is fixed at P450 per month. With those figures, I set aside P2,500 for electricity, P1,500 for water and P450 for cable – total of P4,450. That’s the money I set aside for utilities each month. This month, here are our actual bills: electricity – P1,627.50, water – P1,374.61, cable – P450, total of P3,452.11. My savings? A whooping P997.89! Where is it now? In my piggy bank, of course! And will soon be deposited to my savings account when I find time to go to the bank. And when I say savings account, it is different from the account where my pay comes in. Bank A is the ’spending’ account. This is where Dario deposits the money he sends us. I use this ATM card for purchases (if no ATM machine is available) and withdrawals. Bank B is where the savings go. The ATM card was never used for withdrawal, except for emergency purposes only.
This vacation, couples with school age children can also save more money. Here’s what I do: Since school will be out for 2 months (April and May), my budget for Jeff’s (P500) and for my youngest sister’s (P1,000) allowance will go directly to my piggy bank. Before, I was happy that I am not spending it for them, but now, I am happier because I will get to save what I saved - P1,500 per month for 2months!
This wasn’t my practice before. I used to put the money I saved in the envelope marked ‘everyday’ – meaning, the money I use for everyday expenses like snacks, dining out and other non-important or immediate expenses that include things needed for school projects, cheap costumes for school activities, etc. The result? I tend to spend more because I see that there are still more money left in my ‘everyday’ envelope. I thought, ‘Hey! I still have money here and I still have some left in the bank. Maybe I should buy this and that. Blah blah blah.’ Because I see more money on hand, my thinking was I still have money to spend on something else, where ‘something else’ means unnecessary things. Well, with the crisis and all, I’m wiser now.
4. When grocery shopping, bring your list
This is the rule of all rules when buying grocery items. I always make a list, not because I want to really stick to my budget, but because I always forget what to buy. But when I’m inside, I look for better deals like discounted items on sale. Last Wednesday, I went to the grocery store to buy what we need for the month of March. I came in with my list as usual. Since I just ran out of cotton, I included it in my list. My usual brand costs P5.50 for a 15gram-pack, but it was out of stock. My next preferred brand costs P4.75, while the store brand which I haven’t tried yet is only P3.75. I chose the store brand because it is cheaper and I want to know if its quality is the same as the one I use. Of course I wouldn’t know if I won’t buy and try. And guess what. It’s almost the same as the one I regularly use. You see, I once bought a different brand of cotton to try out and ended up hating it. It has this small, rough, grain-like thing that when you wipe it in your face with your facial cleanser, the rough thing hurts you. Since then, I sticked to only one brand. But from now on, I’m buying the store brand which is a lot cheaper for almost the same quality.
Another good deal I just got was for the chocolate drink. Two of the major chocolate drinks brands here in the Philippines are Milo and Ovaltine. The 600gram-pack of Milo is P112.50, while 600grams Ovaltine was on sale – P87.50. I picked Ovaltine. For my hot chocolate pleasure, there’s Ricoa – 100gram-pouch is P26.50, while the one in the 160gram-plastic container is P60+. Which would you choose – 160g for over P60 or two 100grams pouch for P53? See the difference?
Running out of paper to make a list? Bind your old receipts and papers together in a clip and use the back portion. This will save you some more money instead of buying a new pad. Look at mine
5. Recycle
Jeff uses folders for his school projects. And because we don’t write anything on the front of the folder, we can still use it for the next project he will have – no need to buy a new folder! For pictures we pasted on the bond papers, we carefully remove them and keep them for future use. For old books, we don’t just throw them away. We keep some for cut outs and reference, while we sell the others in the junk shop. (Jeff gets the money for everything we sell to the junkshop and he puts them in his ‘Pringles’ piggy bank)
6. Sell your stuff
Do you have things that you don’t use anymore? Sell them! Jeff has old shirts and toys that we sold last December. The money went directly to his Pringles.
You see, with what I do, I also teach Jeff the value of saving. He knows how to budget already. Last month, instead of toys, Dario and I gave him cash for his birthday. He decided on what to buy and ended up getting the toys he wanted and saving some as well. He even treated me out for dinner one January night as a post birthday celebration.
There are so many ways on how to save more and spend less. Some of you may give up your subscription for cable TV or phone if you realize that you can live without them. Unfortunately, this won’t apply to us. That’s why I save in some other way. In any case, keep focused. If you failed on your first attempt, don’t be discouraged. Just start again. It’s not how little you earn, but the will to save that will get you to your destination of being debt-free and saving more. How about you? Any tips to share?
