My Finance Blog

Just recently, I came across some friends talking over a blog, comparing their earnings for the last month. One of them said his aim was to start earning $5,000 per month within six months from now. The others harped in agreement and said they’d like to start earning as much too. Thing is, when we get content with out jobs, we sometimes forget that our potential to earn, depending on our set of skills, might be bigger than what we thought it is. There are times in people’s lives when they need an extra push to be able to grow and expand their horizons. Challenging oneself is a sure-fire way to propel you to new heights as long as you do things correctly. So how could you instigate an effective financial self-challenge?

1. Set a Goal

Set a goal that you know is far unreachable in your current state. If your average earnings per month is currently at $1,000, set a goal for $5,000 but on a realistic timeframe. Financial growth is not instant, it might be exponential, but it could take some time for you to actually reach your goal.

2. Let Others Know of Your Challenge

Why? Well it’s because other people know of your challenge, you’re obligated to follow through. Unlike when nobody else knows, you could cheat or forget the challenge altogether. Be transparent and show other people your progress so you won’t be inclined to delude yourself. If possible, get others to join the cause so you’re not alone in your efforts.

3. Always Have a Back-up Plan

Things don’t always work out the way we want them to. Even if you have a good solid plan in your head right now, it might not be enough to reach your goal. Spread your wings, explore new horizons — think of other ways to make money. Work REAL hard for the first year and then you’d start seeing results.

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Everything’s laid out before you. You have an initial amount in your hands but it’s not enough so you decide to take a home loan. Friends and family refer to you to various lenders, you request quotes (not too many), you sift only the best deals and then finally, after long hours of deliberation, you make your choice. But are you sure you know everything that your supposed to know? Are you sure that years from now, you won’t be regretting what you did because you weren’t as thorough as you would have liked to be? But then, have you ever known what you should have known in the first place? Not many people are aware of what things they should know about home loans. Here are a few:

1. Interest Rates

At the beginning of your home loan consideration, you need to know what kind if interest rates your loan will accrue. Ask your lender whether it is a fixed-interest rate which does not change over time or an adjustable-rate which fluctuates and increases as times goes by.

2. Mortgage and Other Fees

Ask your lender how much the monthly mortgage will be. You need to make sure you’ll be able to pay it. You also need to know if PITI or Principal, Interest, Taxes and Insurance are all included in the monthly mortgage payment.

There are also loans which require you to pay an amount upfront. These are called prepayment penalties. Despite the fact that you need to shell out cash at the very beginning, the rates for this type of loan is generally lower.

3. Payment Schemes

And finally, you need to know what type of payment scheme will be in order. There’s such a thing called balloon payment. It entails a low interest rate during the onset with the loan being due in around five to ten years. There are those which have high interest rates but are due for a longer time. Bottom line is, you can choose which type of loan you think is best for you — just make sure you think of things carefully.

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For people, especially those with families, one aim in life is to have their own houses. There are many times, however, when even if you feel you need to have a house, you don’t have enough money to build one. And besides, even if you do, there are other expenses to think of — how can one live without even a modicum of cash on hand? At times like these, if there are no personal friends or family to lend people the needed money, getting a home loan could be the only solution. What are the basics of getting a home loan?

1. Find a Lender

It might sound funny since this one’s so obvious, but in truth, it’s difficult to find a dependable and lender. The best way is to get direct recommendation from friends and family you can trust. Just remember that nothing’s the same for any two people so it might not always be as smooth-flowing for you as it went for the referrer.

2. Getting Quotes and Filling Out Applications

When you have collected names of different lenders, request quotes from them. However, make sure to limit the number of lenders you ask quotes from because every time you ask for a quote, your credit score is checked. Too many credit score checks in a short span of time would reflect on your credit report badly. When you’ve found the right lender for you, fill out an application and ask for details on type of loan your lenders have given you.

3. Wrap it Up

If you can negotiate and bargain with your lender, then do so. Finally, review everything to ensure that all is in order, pay the upfront payment of your lender costs and seat back and relax — from now onwards, you can only observe as to how things will progress.

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Now that we’re through discussing scrimping and saving for ourselves, let’s discuss about saving for other people. If you have more than enough and would like to give to others, that’s great. However, that doesn’t mean you’ll shell out everything you have and give them all. For ordinary people, even giving to charities should be planned. If you do indeed what to give to charitable institutions, the money doesn’t exactly have to come from your living expenses. You can always find ways to save a little spare cash which you can then donate later. Here are some suggestions:

1. Keep a Piggy Bank

Yes yes, go on, laugh at it. However, saving spare change, I swear, could make a difference. My mother saved pennies on two big empty bottles some time ago and was able to save up to $200 which she will be giving to charity next month. It might not be anything big, but that $200 is just loose change she might have spent on something useless like candies. Just make sure you don’t get tempted to spend the money for your own unless you really need it.

2. Set Aside a Part of Your Income

If you have a vice or luxury you want to get rid of, this is a perfect way to help curb it. Determine how much of your monthly income you spend for your vice or luxury. This time, set aside that amount for charity. PRETEND (and believe) you have used the money for that purpose so you don’t get tempted to spend more. It’s all up to you to discipline yourself.

3. Ask another Person to Save For You

If you have someone you can trust (preferably not a part of your household), ask that person to keep a part of your income for you. That way, you’ll have no immediate access to the money.

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Last time I discussed about is a person can live earning below the minimum wage. Just like what I said before, “if you are earning below the minimum wage for now, scrimp and save up.” This is due to the fact that things change and in time you might need a lot more than what you are currently earning. So, here are some tips to help you start living frugally.

1. Eliminate the Want and Retain the Needs

You need to be able to identify what are the things you “need” as opposed to the things you “want.” That doesn’t mean you have to be hard on yourself — the occasional luxury is well-deserved, but refrain from binging on things you can live without.

2. Don’t Eat Out Frequently

You’d be surprised but you can save a lot by preparing your own meals. Restaurants, of course, would charge more that what the food is actually worth plus you still have to worry about the tip.

3. Find Coupons and Vouchers

There’s no shame in looking for coupons and vouchers for discounts. If you know there are discount coupons for the grocery, then find one.

4. Look for Freebies

Early this year, I looked for “free stuff” in Google and got everything I could find. I think it was a success, I got more free books and DVDs I could read and watch. I suggest you do the same. This will cut off on your “extra” expenses. Other than books and DVDs, some brands also give away free trial products so Google away…

5. Save Money on Gas and Do Everything at Once

At the beginning of the day, list everything you have to do. If there are errands to run, do them all at one go. This will not only save gas but also your precious time.

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I’ve been asked this question not too long ago. Can a person live earning below the minimum wage? Not the minimum wage of any particular country but the minimum wage in general. Let’s see…what does a human “need” in order to live? Let’s strip off all the icing from the cake and look only at the nitty-gritty. There would be food, water, shelter and clothing. I’m pretty sure I’m missing another element, but let’s go with these four. Earning minimum wage, one could afford these most basic needs. After all, how much do you think the plainest food and clothes would cost? Water could be free and with shelter, you could take on the most miserable abode. So do I think living below the minimum wage is possible? Of course. In short, I think the question needs to be rephrased.

The question should be — can a person live comfortable and decently earning below the minimum wage? Of course, it all depends on one’s views of what “decent” and “comfortable” are as they are both subjective terms. But let’s assume “decent” and “comfortable” living means being able to afford more than just the basic needs without having to borrow from other people.  My answer would still be “yes” but I would also ask, “for how long?” As you grow as a person, get married, have kids, your cost of living rises. So, my advice would be, if you are earning below the minimum wage for now, scrimp and save up. What you’re able to save, put into investments. There are many to choose from — time deposit, stock investment, forex trading, mutual funds, ETFs, etc. Seek ways to make your life better and don’t just be content being at the bottom of the barrel. Don’t be afraid to take risks or else, life might not improve for you for…well, forever.

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I talked about how to curtail and curb credit spending before. One of my suggestions was to stop bringing your credit cards altogether and opt to bring cash instead. And while I do maintain my stand on the issue, there’s the question of how much cash should one carry around. There are many aspects and elements to consider when deciding on how much cash to carry. Here are two of them:

1. The Environment

You have to think of what kind of place you’re living in or what kind of place you’re going to. In urban locations, ghettos and slums for example, where instances of being robbed are high, bringing big amounts of cash would be foolish.

2. The Amount You Actually Need

The bad thing about having to bring cash is that you’re compelled to spend. And if you’re not very good at restraining yourself, not bringing credit cards won’t do any good. So if you’re going shopping or eating out or just plain taking a walk, gauge the amount of money you need and bring only that plus a bit of extra in case of emergency.

No matter if its cash or card you carry, self-discipline is needed so you don’t overspend. Perhaps the advantage of cash is that you’re capped to what you have in your pocket. Which brings us back to this post. The amount of money you have in your pockets you should carry should always be planned. Do not bring a lot more than what you actually need and bring only what you intend to spend. It’s important to bring some money for emergency but if you do, keep it hidden and don’t spend it unless absolutely necessary. In a nutshell, finances should always be monitored whether they be cash or credit card and you should never lose self-discipline and focus.

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Admit it or not, some of us are hopeless with our own personal finances. I know I am. I keep an Excel file of all my earnings and expenditures but I always end up missing a big part of where my money goes and of my finances generally. I cannot, for the life of me, hire an accountant to get my finances in order. Not that I earn and spend much, but the disorganization is killing me. What more if/when I get rich? Chances are people would be nicking my money right under my nose and I won’t even know it.

Thankfully, software such as Mint and iCash are existent. In a nutshell, iCash and Mint are two types of personal finance software to help all those who have trouble with numbers, like I do.

1. iCash

iCash is a personal finance software for both Mac and Windows OS. Basically, it keeps tracks of all your finances and banking activities. You don’t have to do anything, just run the software and let it do its job while you watch. It’s like your own digital accountant except it’s cheaper.

2. Mint

Mint is a software akin to iCash. It has the capability to track any and all of your finances. It supports 3000 banks as well as credit companies across the US. All you have to do is register your online banking account(s) with Mint and the software will keep track of your account balance, debit and credit. You could even program the software to notify you if your balance is running low or a credit card payment is due. A pie chart is presented so you’ll know where your money’s being spent on. This is especially useful is you’re thinking of cutting your expenses off but can’t seem to figure out where all your hard-earned cash is going.

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I talked about credit reports and credit scores before. Just like what I said, having bad credit ratings could affect your future applications for loans and more credit cards (not that you need more credit cards if you’re already struggling to pay what you have). And truth is that, with plastic in your hands, there’s this urge to spend because you don’t need to carry lots of cash around, shops just swipe and the item is yours. How convenient. But convenience has its price, sometimes a BIG one, and you’ll end up with a long and dizzyingly large credit card statement by the end of the month.

Here are some practical tips on how to curb and curtail credit card spending:

1. Have somebody else hold onto your credit cards.

Find someone you can trust you can’t bully into giving you back your credit cards when you have this insane urge to buy something. Ask them to hide your cards from you or put them in a safe where only they know the lock combination to. Choose someone who can afford being hated during times when you’re feeling crazy and demand your cards back and they refuse. In short, don’t choose a pushover.

2. Don’t bring your credit cards with you.

When you go out, instead of carrying your credit cards with you, bring some cash. That way, you’re limited to what you have in your pocket and nothing else. If you’re used to shopping online and all you need is your card number and CVV, resist the urge to surf shopping web sites or better yet, if you really don’t need to, don’t go online at all until you’ve learned how to control yourself.

3. Hide your credit cards in hard to access locations.

If there’s no one else you can trust, hide your credit cards in locations which are difficult to access. This way, when you have this mad urge to spend and you’re on the way to getting your cards back, you have enough time to cool down before you get to you cards, and possibly, refrain yourself from spending.

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Continuing on with the topic of student loans, did you know that you can avail student loan “forgiveness?” Yep, you read that right. That means you’ll be debt-free (or at least almost) if you go out of your way to be “forgiven” of your debts. It sure sounds a lot better than slaving away and paying off your loans within thirty years or so. Don’t rejoice though, it’s not as easy as I make it sound.

Here are some ways to get rid of those student loans without paying for anything.

1. Join the Military

AHA! You really thought you’re getting the easy way out did you? Nope, not a chance. Joining the military pays off up to around 10 grand of your student loans. You get more money if you’re stationed in higher-risk locations. Nope, you’re really not getting off easy.

2. Do Some Volunteer Work

There are some corps and organizations which would pay off a part of your loan if you devote a set period of time volunteering for their causes. Examples include Americorps, VISTA, and Peace Corps.

3. Teach

And not just teach, you need to teach on designated areas. You have to agree to be stationed into areas of low-income families or where there’s a shortage of teachers. In short, volunteer work.

4. For Law and Med Students — Do More Volunteer Work

Law students in certain schools could be forgiven their loans if they agree to take on nonprofit work. For med school students, the National Health Service Corps will help you pay for a part of your loans if you serve in areas where medical service is in dire need.

See, I told you it won’t be easy. Still, if you think you’re eligible, there’s no reason why you shouldn’t try. After all, you won’t end up only paying for your loans, you’d also help people in the process.

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