Financing My 2012: New Year, New Decisions

HAPPY NEW YEAR!

First and foremost I would like to greet everyone who passed by here a very happy and prosperous 2012! This year is very exciting, just like every start of the year, there's so much in store for ALL of us and I hope we do our best and meet any challenge with a wiseass grin on our faces! :DD

Well on to the New Year update:
I've been long harping about having built a fund by budgeting and saving over the last year that was in preparation for my travel to Japan. You can see from the link above that I put away about 22% of whatever take home pay I get.

I've always been so adamant, so excited, so driven to save because I love to travel. Not just travel, but TRAVEL TO JAPAN. There is something magical for me about that country. Did you know that I studied the writing language since Sixth Grade just to be able to read Japanese comics? Haha!

I also studied formally at Mindanao Kokusai Daigaku for 5 months and took the JLPT N5 last December! You see, there has been so much preparation for me NOT to go there.

But the New Year left me thinking for myself. I grew pensive while I was alone in my nieces' room that I shared with them reading a book. I looked at the walls, ceiling and felt the hard foam at my back. I thought to myself that this year I would be 26 years old come September.

It struck me that I'm not THAT young anymore. And that at this age, I would at least stop sleeping on floors and stop sharing a room with my nieces, right? :( If not have a place of my own, at the very least I would have an area, no matter how small, to call my own...

In any house I lived in, except that short stint at I've always shared an area or a bed. I didn't have privacy. If I needed privacy, I go to the bathroom to be alone. But you can't sit in the bathroom for long until someone raps on the door for their turn to use it. Reading books is hard when kids are talking and fighting and trying to one up each other left and right. Getting stuff done on my computer is hard, especially when my nieces ask what time do they get to play. Sigh. My stuff is also haywire. I have my wardrobe cabinet in the other room, I sleep in the room fronting it, my personal stuff is in the other room all the way from the kitchen and my bookshelf is in my nephew's room :( You can't imagine how difficult that is doing my daily things going to and from rooms just for me to get things done.

That's why I want this!

All I want is a small, 7 wide room that's enough to stash a small bed, two tables, a computer, and a wardrobe cabinet :( It will be pretty tight, but for me that's already paradise.

I have talked with my sister about building it just adjacent to one of the outer rooms and she agreed! She asked me if I wanted to pursue this and I was adamant. She told me I could use the money for a house downpayment and I said I do not have the right amount of resources in the next few years to fund that much. I told her it would also help with the appraisal of our house if ever it would come to that point, and that maybe someday if I get married and have a place of my own I won't be living there anymore, one of my nieces can always take over my little room for herself.

But I think I'm going to be single for a long time :( so I guess this is the best option for me.

This is why right now, I am very sorry for having to let go of my dreams for travel. I think that a room is more lasting physically, and it will provide me the emotional comfort of finally having something all to myself. :D I've already talked with some home renovation guys and they can build my room in a short amount of time hopefully.

It's bittersweet for me to write "My Room" instead of "My Travel Fund" in my budget. I have to let go of that dream of seeing Sakura trees and eating oden and ramen on a cold Hiroshima fall night; but maybe I can dream about that in the room I'm about to start building.

WISH ME LUCK! :)

Thanks for reading.

Christmas Bonuses and Hitting Goals

Hello!

I have good news that I want to share. It's nothing really major but something that made me happy this time of the year. I got my Christmas bonus! For most of you this is just normal, but for me I am really psyched about it! It's funny and ironic how it pays to work for a capitalistic business.

So aside from my bi-monthly salary last December 10, I got a sizeable 13th month pay from our company. I am really happy about it because I have just about depleted my Cushion Fund (The fund that cushions my Safety Fund so I won't have to tap from that 'final financial frontier' as I call it.) because of sudden requests from my mom and dad.

Where did most of my finances go?

The roof at my parent's house was leaking so bad and the galvanized steel sheets and the wooden railings need to be replaced fast; so I shelled out of course, because my parents really don't have the money to cover the whole cost of the repairs. I am more than happy to give this to them because shelter is their basic protection. I can't have my parents living under bad house conditions.

You see the wheelchair my mom is sitting on? Mike and I shelled out for it using our pooled funds from our part-time writing gig and a portion of my Christmas bonus.

So between that and the leaking roof, I didn't put away the whole lot of my money. But I am still happy to be able to help. Money is important for me, because it is the tool that enables me to help the most important people that matter in this life.

What did I do with the rest of the cash?

I saved it of course! And due to this, I hit my Financial Goal for this year!

* About P50,000 in a brand-new, spanking Time Deposit.
* Aside from my Travel Funds that are in another account.
* PLUS! a new P5,000 Cushion Fund that I deposited in a new BPI account (ATM only) that I am going to slowly grow again the same way I grew my previous one.
* Some money put away for Christmas SHOPPING!!!!!!

I am so happy! These makes me want to work even harder.

Even though the Christmas heavy spending is so easy to get lost in, I have a good system and a good partner in crime during the Holiday spree, so I'm good to go. Will update about it a few days!

See you then,

Financial Security: Am I Going the Right Way?

My winding and challenging road toward financial freedom makes me feel like I'm crawling in a pit of Tar. Sometimes I console myself saying that, I have a lot of years to go but at the same time after a couple of years working, I scoff at myself for having built so little.
They say it's baby steps and I may just be impatient. I have a little now that I am able top put away but it's so little that more often than not I feel broke.

So where am I now?

Work and salary
I love my work. I come early everyday because I love sitting at my desk, turning on my desktop computer, hauling out my work laptop to turn it on too, and then logging in to check my emails and tasks for the day. I look forward to my boss arriving and my co-workers (including my boyfriend haha!) settling at their stations.

My pay is good. It's not extraordinary but our department pays highest compared to some other departments. I like my company too because they give out monthly incentives almost on time, perfect attendance bonus which I enjoy getting every month, and performance-based quarterly incentives that I get almost everytime. I recently passed an exam that could very much help with my promotion, it was very technical, mostly about my stock knowledge about networking, wireless devices, connectivity technology and such. I passed that so I am hoping that I get the promotion someday, it will certainly boost my take home pay!

Love Life
For a girl, your partner makes or break the progress you are making in life. Either you shoulder them like a burden, give you stresses, or they make you into someone better and boost your dreams. I think its important to find the guy that matches youin every way and that your dreams and his dreams should not echo, but complement each other. I taught him how to budget and it's his first time to actually have a chunk of saved money put away safely in a bank. I love that we're both frugal and we make do with what we have.

After a year of dating, we are happy, everyday we talk constantly, laugh and plan a lot of plans. Like a lot. He's the one I can talk to about anything because he is the smartest guy I know.

Me and My Family
I stress over a lot of things when it comes to my family. I'm living with my sister's 4 children while she's working abroad. In our household, my other sister also lives with her small baby. My first sister worries me because even though she has worked outside the country, she has virtually no savings in the bank. Everything she worked for just goes to the household, from food to clothing, utilities to tuition which take up a huge chunk of her pay. I only pay for the water bill in return and oversee the studies of my nieces and nephews. I am mainly worried about what the future will hold for her who has that many kids and no savings. The same thing with my other sister who has no job and no income, relying on the small allowance our elder sister gives her. I worry about the little baby's milk and food, clothing and doctor's checkup.

Aside from that, my mom and dad are reaching the age where they feel aches and joint pain as well as all those disorders that plague the elders. My mom continues her sari-sari but no one is there for her when her leg and hips start aching so bad, it's only my dad who's 76 years old now and he can only do so much. I want them to rest and not have a worry but I can't provide that for them. I try to give them money but it's only really very little. I can't buy my mom her medicine since its just so expensive, so I give them food supplements to help strengthen their bodies at least. I feel like crying everytime I think of how little I can help.

Future Plans
I've finished building about half of my emergency fund which is a significant amount for me. I divided it into one liquid ATM account ("Cushion Fund") and two Time Deposit Certificates ("Emergency Fund" and "Safety Fund") at PBCom and Metrobank, the latter has just matured this month and I'm thinking of getting a higher interest TD for it at another bank. I am sticking with TDs now because I am ultra conservative and I want my money semi-liquid.

I plan also to pay off my college debts of about 12k next year.

Next year I will be all about investing. A bit of savings and a huge load of business investing. Mike and I are planning to start a business. No details for a while since we have a vague idea of what we are going to do. We're planning to involve his brother in this who has become my very good friend too. We're planning to reach 25k each by March 2012.

That's about the long roundup...
I really hope 2012 will become a better year. I love 2011 for everything that it brought. I need 2012 to work like a charm. I will work so much harder.

Back to School: Education is an Investment

Some months after March 25, 2007, the day I shyly but proudly walked up the stage to receive my University diploma (which turned out to be just rolled A4 paper lulz) I immediately thought of ways on how to find work so I can pursue my career and start earning for myself. But even then, I really wanted to go back to school.

After four years of working, I have now the chance to go back to school again. It's not a Masters or any prestigious post-graduate studies. I'm currently enrolled in Nihonggo I, under the Mindanao Kokusai Daigaku system. I've always loved learning the Japanese language and have been self-taught on Nihonggo since sixth grade. I was so glad for this opportunity to formally study the language. It was so fortunate that the 5:30 PM - 7:30 PM class schedule worked so well with my 8:00 AM - 5:00 PM work schedule and add the fact that the school is just across the street where I work! Something tells me the world has finally conspired to give this to me. Finally. Finally.

Me and My Classmates on 7/7/2011 - Tabanata Day!

Wishes on Bamboo branches, traditional symbols of Tabanata day

Added my wish on it too! I hope it comes true~

It's been over a month now, and we have four more months to go for this 5-month language class. I think going back to school is a great way to be able to take a break from the monotony of work, with plus points of being able to pursue hobbies and ambitions that have long been buried in resignation. Now I've re-ignited that desire! I really wanted to travel and visit Japan, and I think this is a great way for me to do it, so once I take a vacation, I would be able to fully immerse myself in the language and have a deeper understanding and appreciation of their culture.

For such a fantastic opportunity as going back to school and learning a new language, I am only paying P1,000 per month, after the registration fee of P1,000. That's about P6,000 in total for the 5-month language class, two hours a day, three times a week.  There are miscellaneous things that can add up like my required books which are:

Nihongo I and Nihongo II - P700.00 (P350 x 2) 

But I don't mind at all. These books are already a steal compared to a 500-peso or 1,000-peso book that I would not fully appreciate and use anyway. These books are very user-friendly and understandable. It's really made for a classroom setting.

I also had to adjust my allowance as well to be able to eat out (instead of eating at home) because once our classes ends at 7:30 or 7:40, I usually end up very hungry. I am trying to figure out something as a workaround for this though:

Dinner (Eat out) - P50.00

I will try and find alternative food, like bringing 2x Banana bread P15.00 which I love eating, to help stave my hunger until I get home.

I really like all the things I'm learning so far! I can finally say I've completely mastered the Hiragana and Katakana characters, and I have added new Japanese words and phrases too! I can now ask questions properly, understand the answer to the question, give directions, receive instructions and so many more.  In some ways, I felt like I invested in myself and my dreams, which gives me a very fulfilled feeling!

Money Mistake: I Hate AXA Honey Saver 5 and AXA Philippines

 Welcome to the first ever Money Mistake Series on The Currency Of Everything.

Everyone has them, no matter how careful you may be with your budgeting or finances. Whether it's a wrong financial decision or a complete mistake, you still lost your hard-earned money. Who in their right minds want that to happen anyway?

Even for savers and investors, it's something that is unavoidable especially when you're also going through with trial and error the first time you try your hand at investing and what products to choose. It's hard enough to find money, plan for a good budget and in the end you will not even get to enjoy the harvests of your hardwork. It's also hard to admit that you made a mistake, but the only way to get over it is to accept and finally find a solution.

The opinion expressed below is solely my own, crafted from my own experiences.

My Money Mistake is Investing in AXA Philippines.

Getting their insurance account, Honey Saver 5, was a very immature mistake in my part. Even now, I know I'm still a novice when it comes to finances, but even now I already know what a bad thing it was to get the AXA insurance. It was almost a year ago when I opened an account with them, and at that time I was so glad that a bank-backed insurance company opened on my Metrobank branch, and it was very near my place of work. I was high with the fact that I was going to open something that could set me at a stable financial footing in the future, and I was very much glad that I could afford the premium, which was set at P1,222.27 a month or P12,886.00 a year.

This is the actual Policy document for AXA Insurance Honey Saver 5. This is my document, my own personal copy, my property.

So that's my Honey Saver 5 policy, a traditional 5-years-to-pay insurance policy that has a Basic Sum Insured of P100,000 until Age 100.
 

Insured for 100k

My understanding of how my policy worked was through the information given to me by my AXA Financial Advisor. Honey Saver 5 will require about P64,430.00 in a monthly installment over a 5-year period. The Sum Insured is immediately in effect upon the first day of enrollment and payment of the first premium.

In my mind, I wouldn't mind paying P64,430.00 if I was going to get insured for 100k until age 100. I was a trainee at that time, so the premium of P1,200 stretched my budget a little. I got the document, but I trusted AXA enough to just give it a once over, but I did my research, learned about personal financial managment in baby steps, and for 2 months now, my AXA insurance left me with an empty feeling.

AXA has Small Returns... Very small cash values

You can see from the picture above the breakdown of my yearly policy, the cash value it has accumulated as well.

In the First Policy Year, which I would have paid P12,886.00 for has a P0.00 value,
and my Second Policy Year I would have paid P25,722 in total for would be valued at P9,800.00.  

for me that's alright since that's always how insurance starts out. I've learned that for about 1-3 years of payment, it would go to covering the total cost of one's policy. But it is in the subsequent years that worry me.

On my Fifth Policy Year, where I would have paid a total of P64,430.00, my last year of paying, my policy has a cash value of P26,000.00, which is barely half of what AXA had hauled from my premium payments.

If one wanted to get back the total P64,000.00 one has invested in 5 years, it is about impossible. Once my policy reaches its 20th year (I would have been 44 years old by then) the cash value would only be P35,300.00.
.

In the end... you don't even get what you paid for....

I've been a good payer until this month. Because after so much deliberation... I decided to surrender my policy.

Yep. Money wasted... because this is my first year, I cannot get back the monthly premium I paid as the value of my policy is a big fat ZERO. It's funny how AXA can't even give back even a fraction of my money. Sometimes I want to lash out at the unfairness of it all.

I truly regret the day I joined AXA.

Me and My Quirky Budgeting Style

Payday is always a happy time! No matter how bad my mood is or how down I am, payday makes me cheerful. No, I'm not mukhang pera or anything like that, but I get happy because it's time to sit down, relax, and try to work on my budgeting so I can start anew!

My pay is not as huge as some of you may get, but with my simple lifestyle, savings-conscious budgeting style and once-in-a-while splurges, I'm good to go. So how do I go about with budgeting? You may think playing with numbers on a paper is so easy, but you can all attest how hard it is to follow through, right? It's so easy to write that you'll allot this and that amount to savings, and this percentage of your pay on this and that for spending, but once you actually get the money whole, sometimes those good, well-thought of plan flies away as easily as the money flies away from your hands.

This is why I adopted the Envelope Style method! It has worked so well with me, and the division of the money from whole to being broken down into its allotted amount helps me realize that even though I have this chunk of money I've just withdrawn, it is not unlimited and a specific amount has already been divided as per my budgeting.

Putting in money into their designated envelopes help me see where EXACTLY my money goes.

So what is the envelope style?

Envelope Accounting or the Envelope System is a method of budgeting where on a regular basis (i.e. monthly, biweekly, etc.) a certain amount of money is set aside for a specific purpose, or category, in an envelope marked for that purpose. Then anytime you make a purchase you look in the envelope for the type of purchase being considered to see if there are sufficient funds to make the purchase. If the money is there, all is well. Otherwise, you have three options: 1) you do not make the purchase; 2) you wait until you can allocate more money to that envelope; 3) you sacrifice another category by moving money from its associated envelope. The flip side is true as well, if you do not spend everything in the envelope this month then the next allocation adds to what is already there resulting in more money for the next month.
With envelope budgeting, the amount of money left to spend in a given category can be calculated at any time by counting the money in the envelope. Optionally, each envelope can be marked with the amount due each month (if a bill is known ahead of time) and the due date for the bill. - Wikipedia, Personal Budget: Following a Budget

Basically, what you do is get several envelopes and mark them according to what you have originally set on paper. My budget usually revolves around this percentages:

60% - Savings. And out of that amount here is the breakdown:

• 39% - Emergency Fund
• 39% - Insurance Payment
• 22% - Travel Fund

40% - Expenses. And out of that amount, I break it down to:

• 36% - Allowance
• 24% - Credit Card Bills
• 20% - Tuition
• 20% - Water Bill

Each of those break downs, I put it in the allotted envelopes, and that's it! The big chunk of my money disappears and I get a feel of how they are distributed according to their flow. It reduces the chance of overspending on one aspect and undersaving on another. This way, there is a place for everything and everything is in its place!

It has been so useful for me for the past two years. It has taught me to be disciplined, to recognize how much I'm putting into savings and expenses, and most importantly it avoids me having tap in to other resources by sticking to the contents of the envelope ONLY, and trying workarounds and money-stretching ideas. I like it because they are alotted neatly! But my envelope style is not THAT quirky, but I do get a lot of "wow, you still do that?" with matching wry smiles. I don't mind, well, it's not even unique but it works for me.

My Metrobank Time Deposit

I live in Davao where life is laid back and the people are unconsumed by the fast pace as well as societal stresses, things that have already swallowed other metropolitan cities in the Philippines. I attribute my own nature to my upbringing in Davao City, and that's why I always go for things that won't worry me. When it comes to banking, I'm this way, too.

I'm not one of those fortunate ones that already have trust funds from their parents, or have some kind of "mana" (inheritance) from my grandparents. I grew up without a cent to my name and my family lived within our means. Now that I'm all grown up complete with a job that brings in stable income, I will now be able to work hard and build something for myself even if it's from scratch.

Last year, after several months of saving dutifully, I ended up with a small amount of  money in my meager savings account. It's not impressive, but I was very much proud of myself. While my money is growing, I thought to myself that I could open a savings account in Banco De Oro (BDO). I've gone through several lengths just to be able to raise the money and, most importantly, KEEP IT INTACT even after almost a year of saving up for it.

If you're like me who likes to keep things very safe, try to remember that it is still UNWISE to keep a high amount of money in a low-bearing savings account. I decided to try, for the first time, a Time Deposit account. I was gunning for Metrobank, but I feared that my money wouldn't be enough. But I learned happily that you can even open a Time Deposit with a minimal amount with a choice of holding period of 30, 60 or 90 days.

My Metrobank Certificate of Time Deposit

This is what the certificate looks like! It's really very business like... so there's basically nothing there except a couple of numbers and a bunch of signatures. I'm glad that my money, no matter how small it is, is gaining slowly and steadily.

The only problem that some people tell me is that the interest rate for the my Time Deposit is 1.5% but it only looks small because they're used to higher rates for their high deposits. In my case, this is the first time I've tried TD, so I'm just cautious. But for 90 days (holding period) I am quite satisfied with even getting only the interest rate set by Metrobank because I am currently set where I am, I just needed a deposit product to keep my money safe and at the same time earn a higher interest compared to my savings account which is only .4%!

The maturity is coming up and I'm scrambling for my next move! I wonder which bank I will turn to, or what high interest deposit scheme I will want to use it for. I've researched for a lot of options, but if anybody has knowledge which bank or financial institution they successfully invested their money in, I would be very glad to hear about it!

Thank you for reading.