ON MONEY

Posted by APNET PROXY on Jun 22, 2011 in Lifestyle | 1 comment

By Jason Quizon

 

The financial crisis of 2009 really hit home hard for me and my family. I was the sole bread winner and once the base of the house is damaged, the house of cards tumbles down. Our financial state is similar to a house of cards built solely on one foundation, my paycheck as a worker abroad. Being jobless for 6 months has depleted our financial resources very badly pushing it to the negative side. I was very fortunate to have my little brother bail me out of the horrible situation. I have read stories of some people who kill themselves when in the same situation, thankfully I didn’t. I actually did not give it much attention back then. It is now when I am paying the aftermath of that event that I am feeling the brunt of it all. 18 months have passed, and the debts are still there. Looking at the bright side of it, the financial crisis and my being jobless for 6 months is the best thing that ever happened to my life’s financial aspect. My financial mindset is now facing 180 degrees and is moving forward.

A bunch of these me likes!

Reading has been an annoyance for me. I couldn’t stand reading a lot, I fall asleep. I am changing though, bit by bit as most of the goodies for financial education is already written. Partially thanks to YouTube a lot are also available for viewing. From all this reading I came out with a plan. It’s not as detailed, but I would like to record it so I can reflect on it, hone it and maybe even help others.

List – Make an excel sheet of the cash flow for each month and record every purchase and expenditure. This is the single most important thing that I and my wife ever did. Knowing how much is needed and where every peso is allocated goes a long way. It gives a record of previous activities and gives a perspective of what lies ahead.

Repay DEBT

Remove debt as soon as possible. Concentrate on those debts which have the highest interest like credit cards, bank loans, 5-6 or and the likes. Throw everything you got on those interest ridden debts until they are nil. If you have debts pay them, even if takes quite a while, the important thing is you pay them. The debt you owe your brother or a friend can wait since these don’t have interests, but be sure to talk to them as assurance that you will pay them. Be sure to thank them dearly for it. A simple thank you goes a long way. It is too much of a loss to destroy a relationship over money, so even if you are friends or relatives PAY YOUR DEBT. Relationships are more important than money!

Build an emergency fund – an emergency fund big enough to sustain me and my family for one year. This fund must not be touched, used or accessed except in the worst scenario. This is where the savings goes in no matter how small. As time passes by it builds up.

 

Start a small project – in my case, we started a small pig farm from the piece of land I bought a couple of years ago. This, should be something that will have a potential money making aspect,but the most important thing is you like to do it and it interest you. It should be small so as not to affect your financial status. Build upon it, study it and don’t rush it.

Live Frugally – If you earn 4,000 a month live like you only earn 3,000. 25% of your income should be saved if possible. In this way you can build up your emergency fund in no time. No matter how hard it is or how small it is, save money! Start with 1% and gradually increase it.

Learn how to cook and eat fresh – Cooking your own food is cheaper and you are sure of what you are eating. Eating fresh means buying food grown locally which are in season, not only are they fresh, chemicals were not used to induce ripening on fruits or veggies.

Save more, and then invest- saving more gives you more ammunition to establish your passive income generating endeavors. You can use this extra savings to establish a business or invest them in stocks. One can even invest on themselves. Acquiring new skills through education and training most likely will increase your professional value. In my case I am planning to take a Project management course and ISO training within this year. It’s not cheap but I know the certificates and knowledge I will get from these will give me an edge in the coming years.

Getting out of debt takes time. It takes even more time to build one’s financial machinery to become self sufficient. No matter how hard this seems to be, it starts with you. That decision to take over your financial sail to steer yourself to financial freedom is the first and most important decision one can make. This is the start. This is my template. It is my general plan. It may fail but it may also succeed, the important thing is that I have a plan which I can work with. It can be modified as needed. All the decision I make will be mine and I have to be responsible, my family depends on it.

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Reposted with the author’s permission.