My Finance Blog

We’ve talked about finding the right business for 2008 before. Hopefully, with that, you’ve been given an idea on what you want to do and how you want to achieve financial success, or in the long term, financial freedom. By financial freedom, it means you’re no longer obligated to work for your everyday needs as you have enough money for normal expenses. Financial freedom is often brought about by businesses and investments. As is generally known, not all people are meant to be entrepreneurs. There are many, many reasons why people are afraid to take the plunge into investing their money. Fear of losing, fear of the unknown, fear of uncertainty — these are but a few of them.

But, what really hinder your way to financial success are your own insecurities. You may be afraid of aiming too high due to your prior experiences in life. If you were financially-challenged before, it’s understandable to be afraid of gambling your money. Others feel they’re not qualified because they didn’t get to go to college. Others claim they’re too busy with full-time work to do anything else. Still, others lack focus and tend to try too many things at one time.

To be able to truly be financially successful and free, one needs to cast aside these insecurities and aim for the sky. Don’t think that because you don’t have a diploma, you can’t get to own your company. Being a small country boy/girl does not, in any way, make you any less competent or qualified to build your own business. Don’t be afraid to take calculated risks. As long as you study the business you want to get into extensively, you have a fighting chance at it. Don’t be hindered by any restriction — you should control your life, not the other way around.

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Electricity is a staple in modern-day normal life. Going without electricity means you have to be in dire financial straits. As such, I reckon many of you have encountered shockingly huge electric bills before. When saving money on electricity is mentioned, people immediately think that they have to spend thousands in purchasing new eco-friendly, energy-saving appliances and fixtures for their homes. In truth, you can save electricity even now using your current appliances. All you need to have is constant vigilance, as you need to monitor your home quite frequently and ensure that everything’s according to plan.

One simple way to save electricity is to unplug everything. Did you know that unplugged TV sets, VCRs, stereos, components, etc., still use 25% of their usual electric consumption even when they’re off as long as they’re still plugged in? Patrol your house every night and unplug everything. Another would be turning down the heater during winters. Bundle up all day and night so you can tolerate the cold. This helps tremendously to save up. When you have the need to use an oven, it’s preferable using the smaller options such as microwave ovens. Big electric ovens can consume up to 75% more energy than smaller ovens do.

Instead of using the dryer, you can opt to hang your clothes to dry. It might be more work for you, but with training, you’ll get used to it. Instead of using dish washer, you can wash the dishes yourself, of course, using only an ample amount of water along the way. Also, don’t leave the lights on in places where you don’t need it to be. Trying to save money on electricity might seem like a daunting task. With a bit of effort though, you’ll save pennies per day which would translate to something more worthwhile per month.

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Late last year, I talked about the plunging economy for 2008. And it’s really not only me. Everybody in various niches is tackling the recent plunges in economy. While the US economy drops, the stock markets in numerous countries plummet. When the world’s biggest economy suffers, the rest of the world’s economies do too. In situations like these, it’s time to start thinking about creating sources of passive income. The idea of having your own business might be intimidating, but if you do things right, you’re going to profit from it in the long run.

Scope out the Field

If you’re looking to start your own business this year, better start doing research. Take a ride around your neighborhood and find what’s in and what’s hot with the people around you. Business owners might not be too keen on sharing insights with you, but you’ll find people who’ll be willing to share if you look hard enough. Research is important for any venture. Don’t jump in any kind of business without scoping the field first.

Think outside the Box

Don’t just consider traditional brick and mortar businesses. There are a lot of other options available that might not be accessible and obvious at first. Stock investing, forex trading, mutual funds investing — these are only some of the vast number of options. Do your research. Find money-making-centric forums and read what other people have to say.

Be Prepared to take Losses

New business would always have losses at first. Don’t be disheartened; it’s all part of the game. Chalk it up to experience and be positive. Although having your own business is definitely trying, you’ll emerge as the winner in the long run, provided you made the right decisions and displayed fortitude all throughout.

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It’s a new year. We’re all burdened with having to pay taxes and at the same time, work on a financial plan for 2008. It’s time to rethink our financial goals and saving habits. It’s time to take out our piggy banks and look if we’re actually able to accomplish anything over the last year. This 2008, you can start doing the things you wish you did last year and at the same time, plan on new financial goals for the end of the year.

1. Set an Income Goal

If your income is not fixed, set an annual income goal for 2008. This goal will help you set your sights into making it happen all throughout the year. Think of it as an added boost of encouragement. If you have something to aim for, you’ll work even if you’re not feeling up to it.

2. Set a Figure You Want to Save

Same as with setting an income goal, setting a figure you want to save by the end of the year certainly helps. Make sure you’re setting money aside for something truly worthwhile so you won’t lose your steam midway.

3. Identify your Waterloos and Work on Them

If you spend a lot without knowing why, you need to identify and point out what your weaknesses are so you can combat them effectively. It’s only by admitting your faults to yourself will you be ready to move forward.

4. Follow Through

You can plan all you want but unless you are bent on following through your plans, you’ll never seem to completion. The best you could do after setting goals is to set mini-goals for days, weeks and months so you won’t get overwhelmed and be able to make it happen. We will discuss how to create mini-goals next week.

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The forecasts for the 2008 USA economy aren’t looking good. In effect, the rest of the world would have to take the blow too. It might not be apparent for those already in the US but a depreciation of the US dollar would mean appreciation of local currencies in many other countries. While appreciating currencies would mean a better economy at face value; that is usually not the case. When a country’s economy becomes better, the effects would be felt around two to three years later. Which means while the local currency becomes devalued; the prices in the market remain the same for another two to three years. So, even if it’s just the US which would have an economic turbulence next year, many countries will also experience the same problem. How does one survive on a plunging economy?

1. Invest Your Money Now

I remember when we had built our family business. The dollar had such a high value during those times. It’s a good thing we went through with it because two years later, what we have bought from what we had couldn’t be bought with the same amount today.

2. Keep Emergency Funds

Even if you invest your money, you should ALWAYS have cash on hand or in the bank. You will never know when you’ll need the money or if your investment pays off. In short, don’t spend everything you have. Your investment should only be an asset which could be liquidated at a latter time.

3. Be Frugal and Save Up

Saving up might make the difference between starvation and opulent living even in the midst of a financial crisis. Tighten your belt. Don’t eat out unless you don’t have a choice. Don’t go on shopping sprees. Limit credit card spending.

4. Pay off Your Debts Now if You Can

If you have debts due next year, pay now if you can. With no debts to worry about next year, it might be smoother than what we all imagine.

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The Holidays has always been synonymous with feasting and more often than not, we find ourselves spending more money on food than we’d want or can afford to. You don’t want yourself buried in debt just because you can’t contain your hunger, now, do you? In spite of the fact that it’s the Holiday season, we all still need to watch what we spend because once the euphoria fades, we’ll end up feeling sorry for what we’ve done. To avoid that, here are some ways to budget your food money for Christmas dinner.

1. Go for Substitutes

The old adage “You can’t always have what you want” goes into play here. If you cannot afford that expensive smoked ham, go for something more affordable. Go for substitutes even in the smaller scale like ingredients for your dishes.

2. Don’t Prepare Too Much

Don’t, in light of the season, cook too much just for the heck of it. If you know you can consume three smoked hams and four turkeys before they go bad, then don’t cook them all. Calculate how much food you’d be able to consume and prepare just a bit more than that that.

3. Make Use of Left-overs

If, even if you prepared just a bit more than what you can consume, you still have left-overs, don’t throw them away. Instead, prepare them the next day or keep them in covered plastic containers inside your refrigerator and use them for future dishes. Make sure to use them before they go bad. With a bit of creativity, you can put left-overs to good use and make a brand-spankin’ new dish out of them.

These tips, my friends, are how my family’s been able to minimize costs for Christmas dinner. How about you?

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Holidays are ’round the corner. With the Holiday season comes trips, hotel stays, frequent restaurant meals and everything similar. Unfortunately, paying the bills for hotel rooms and dinners isn’t the end. If your bill doesn’t cover service charge, tips are also part of the expenditures. When you decide on how much cash to carry, it’s always best if you consider tips as part of the expenditures. Not that I think it would amount to much that you’d need a hefty sum especially set aside for tips. And not that I think you would only carry only the EXACT amount of cash you’d need. Still, it’s always best if you include tips when considering how much you’ll spend for vacations or meals out.

We all know we need to tip waiters in restaurants and boy bells in hotels. There are others which you might not know you need to tip too. To sum it up, in a vacation, you might find yourself tipping frequently and thinking about the overall sum of your tips might make you want to back out of a trip. One way to go about it is not to think of it beforehand as “tip” expenditure but rather as part of the service you’re availing.

Some services wherein which you might neglect tipping people who deserve it include massages, spas, facials, valet parking personnel, baristas and bartenders among a slew of others. When tipping, the universal rule is usually 10% of the total price of the service. This might not be, however, applicable to every kind of service you avail. At times like these when holidaying is common practice, it’s best to know how to tip. To know how much to shell out, exactly, read The Ultimate Tipping Guide by The Frugal Law Student.

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Since I’ve tackled how not too splurge too much on last minute Christmas shopping, let’s tackle more ways on how you can tighten your budget on the season when everyone’s inclined to be frivolous. As a suggestion to save up this Christmas or as a way to have enough just in case you’re short of cash this season, why not try re-gifting? Honestly, I’ve only done this once, last year, when I was really broke but needed gifts. I found items I bought but never really used before, so I wrapped them up nicely to give away. Some people might find it unethical and some, eve insulting. However, in light of the fact that money doesn’t grow on trees (too bad, huh?), we need to make do of what we have at times.

1. Don’t Give Out Bedraggled Old Stuff

The ten-year old beat-up teddy bear won’t do, even if you’ve had it dry-cleaned. Don’t give out old, faded clothes or chipped mugs. Antiques are one thing. Giving away old things you wanted to throw out in the first place is another matter altogether.

2. Take Note of What Your Give to Whom

If possible, don’t re-gift to people with one group of friends. Just imagine what the one who originally gave the gift to you would think if they suddenly found their gifts with another one of your friends.

3. Don’t Give out Personalized of Hand-Made Items

With regards to personalized items, I think it’s self-explanatory why you can’t give them away. And as for hand-made items, can you really bear to give away a hand-knit sweater, for example? Even if it looks horrible, someone spent lots of time trying to make you something personal. Keep them in a chest, if you will, but re-gifting hand-made items is bad idea.

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We’ve got to admit, not all of us have the self-discipline not to take out too many loans or curb our credit card spending. Those who do so, however, have to deal with a bad credit report and score which ends up in them not being able to take out future loans or apply for new credit cards when really necessary. When you apply for your credit score and find out you have a bad credit, you’d know it’s time for credit repair. According to the Federal Trade Commission, when in need of credit repair, commissioning credit companies to eliminate your bad credit shouldn’t be an option. In fact, FTC exposes the fact that many companies which offer credit repair services are scams. Some signs of a credit repair company being scam include asking for upfront payment and suggesting you create a fake identity which is, of course, against the law.

If your bad credit is a result of a mistake, you have the option of filing for an investigation. The FTC will then conduct a thorough 30-day investigation on your claim. After that time, when it’s decided that the bad credit was indeed a mistake, it would be removed from your report. If the result of the investigation isn’t in your favor, the fact that you’ve asked for an investigation will be included in your credit report anyhow. If, however, the bad credit is really as is, you can only wait it out. Unpaid loans and such could take around seven years to clear out while filing for bankruptcy will be recorded for 10 years. This doesn’t mean, however, that you don’t stand a chance in getting a loan or a new credit card within that amount of time. Ask around, different companies view things differently and some might only look at your most recent credit record and help you out.

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How fast can the days go by? I blink my eyes and it’s already December. While everyone else was doing their Christmas shopping for decorations by November, I was still too busy with work to do so. I just came back from a day at the mall, where I unknowingly splurged a lot more than what I would have. Yes, I’m guilty of not following my own advice, but as I said before, when you’re saving up, allow yourself to splurge a bit if and when necessary.

I’ve always been big on holidays and our house hasn’t seen a Christmas tree since 1994, so now I can afford (a fake) one, I dragged my mother to the mall. When we got there, however, I wasn’t able to control my expenditures since I had my debit and credit cards with me. Last minute Christmas shopping could do that to you, really. How then could you not spend more than what you can afford during times such as these?

1. Plan What You Want to Buy

In reality, you won’t be able to follow your plan to the last detail. However, having a solid plan of what you want to buy gives you a goal and hence you can focus on it before anything else.

2. Don’t Bring Too Much Excess Cash

While it’s prudent to bring more than you plan to spend, make sure it’s not TOO much more than planned.

3. Don’t Bring Your Credit/Debit Cards With You

No, really. It’s what got me spending more than what I’ve planned. The knowledge that you have plastic with you gives you some sort of shopping invincibility. You know you won’t run out of money, so you keep on spending.

4. Keep Sane

Don’t get sidetracked by goods you haven’t planned on buying. Keep your sanity and with a bit of self-control, you’re all good.

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