Tuesday, February 27, 2007

Money Matters

I was watching this show called "Big Spender" over the weekend. It just so happened I bumped into while flipping through the channels. The show is all about this financial guru who'd help people to overcome their money blunders. That particular episode featured a young couple who are earning around $20k a month but still have a lot of debt, no savings, cannot pay credit cards. Pretty much, everything's a wreck!

It's interesting how the focus of the issue was more about the girl. She spends around $800/month just for personal care (going to the parlor, doing her hair etc). I can't remember exactly if this includes clothes as well. She wears designer clothes with price tags of $200+ to infinity. Whoah! They also pay around $200+ a month for bank charges and overdraft fees because of excessive withdrawals, etc. Talk about crazy people.

They were even on a brink of a painful divorce just because the couple can't settle their money issues. Sad huh? You'd come to realize how finances can affect couples' relationships.

I've learned a lot that day. The "guru" analyzed their spending patterns and had created an action plan for them so they could have a better control of their money. Below are some of the items I took note of:

1) It's not how much money you earn, it's how you spend it.
2) Instead of using plastic everyday, settle with cash.
3) Prioritize paying all credit cards.
4) List down every penny being spent every single day.
5) Allot $1000 automatic savings that would go to their savings account.

I am proud of my husband because he has a pretty good grip on our spending. He's the one who reminds me whenever I fall astray at times. I'm not as bad (nor even close) as how the girl from show handles money, but I know that I am an impulsive shopper. I could last without shopping for clothes & shoes for months and months. But if I do, I'd spend really big. Ha, baaaad, I know, but I'm learning.

All of the items I've listed above are almost the same principle my husband teaches me. All bills are taken cared of automatically as soon as we get our paychecks, we had an automatic setup to pay certain bills, mortgage, and of course savings most importantly.

I read lots of "If-you-wanna-be-a-millionaire" books. They all pretty much have similar principles. They said we'd be suprised to learn how the millionaires next door live their lives. Most often, they DON'T own brand new cars, DONT live in castles, DONT wear rolex watches, etc etc. They're just the plain Joe's and Janes. I really really like that. Low profile millionaires. Hmmm, sounds cool!!

We know someone who when you first meet him, you would think he's a small time farmer or something. He wears jeans, eats breakfast at McDonalds with other "older" people, lives in a very humble house. He lives in Hawaii and he's been retired for more than 10 yrs. Yeah, in Hawaii, for 10 yrs. Who the heck could afford to retire in Hawaii??? Everything else is expensive out there! All his houses paid off, no outrageous bills, no-nonsense!

Funny thing is everytime we go there to visit him, sweeps and I would actually come back home and be few bucks richer. Just because he knows we're just starting out our lives together so he always gives us money. Yeah, this exact same guy who wears old jeans and white shirt and slippers who you'd think couldn't even afford to buy some decent clothes for himself. Sooo ironic because everytime I go back to the Phils, people who wear nothing less than Lacoste shirts, with super nice high-techy cell phones, super flashy cars... are the same people who ask for money & complain for the lack of it... hmmm... something's not right.

Sweeps & I wanted to be where this guy's at, financially. Most of our friends make fun of us because we both drive some crappy cars. All of our vehicles are waay more than 14 yrs old. We also made sure we get the cheapest house we can afford in a very nice neighborhood. We only spend on things we know would matter to us down the road. That means no Hummer for me (yeah, my dream truck), no fancy furniture (thank God for Ikea), no designer clothes & shoes. I'm guessing we're on the right track.

I'm glad both sweeps and I are on the same page of living a very very simple life. We both wanted to keep it that way until we both retire in about say... 5 yrs time? I'm just kidding!!! Ha! If there's anything worth spending on at this point, it's definitely travelling around the world, meeting people & understanding their culture.


Surfergirl said...

hi berns! thanks for dropping by our multiply site :) i know naguguluhan ka na ata sa dami ng sites haha! but my main personal blog talaga is http://bookofjean.blogspot.com
the multiply one is just mainly photos :)
gosh super small world naman your bestfriend is from ipoh! mark's family is from there as well :)
let me know if you and john are going down to australia and/or NZ we could meet up!
i love this money matters post. i should start reading up on money books i know nothing about budgeting as in! mark is the 'regulator' so to speak in terms of spending hahaha. but im not a big shopper din--its just that sometimes i have no control over books.
anyway, we also admire low key people! it all depends on priority. most people in pinas prioritize on clothes, latest phones, cars, etc--part of the society to be "IN"
mark and i also sacrifice on some stuff--gosh pretty much like you guys. cause we really do want to travel the world. we think its better to invest in that rather than clothes, cars, etc.
but then i also know people whod rather have the latest and most expensive stuff even if they dont get to travel. oh well, kanya kanya lang siguro.
o sya, napahaba na tong "comment". story na sya.hehe take care!


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