Swine(Hog) Production (Piggery)
Swine raising is common and practical among farm families. This is because of the many advantages it gives the raiser which allows them to lessen the costs they spend while farming. For example, pigs convert feedstuffs and waste materials not used by man into pork, swine also has shorter development period which can add to the income of the raiser. The farmer/raiser can also use hog manure to fertilize his farm. Also, pork is the most common source of protein.
Popular Breeds
If you want your swine business to succeed, choose the right breed to raise. Below are the characteristics of breeds that grow well specially in Region 2.
Duroc - It is a heavy breed with color that ranges from light to very dark red, almost like the color mahogany. Durocs are productive, good mothers and milkers. It has good quality meat with very high dressing recovery percentage. It is excellent for cross-breeding.
Landrace - This is a light breed. It is white although you would commonly see black spots. It has a long body, square meat, short legs, ans medium to large drooping ears. They are good mothers, heavy milkers, and produce large litters from 14-18 piglets with very good growth rate and good food use. The thickness of the body and weak hind legs can be improved by crossbreeding with Large White or Duroc.
Yorkshire or Large White - It is heavy and is all white. The face is slightly couping and its ears are erect. They grow fast and give you high quality meat. They have string legs, are excellent mothers, have good character and wean from 10-12 piglets to a liter. It fine for them to be confined, have very good growth rate, and high feed conversion ratio.
Hypor - This is a hybrid. It was developed from four synthetic lines from carefully selected breeds. They are white with fairly long body. Ears are medium sized and drooping. They are good mothers, produce an average of 9 piglets to a liter. Have well muscled backs, well developed hams, and superb carcass quality.
Seigher - This fellow is from Belgium. It is entirely white with occasional black spots. Although they have weak feet, and they can't adapt well to rugged conditions, they have well-developed body, well- muscled back, medium to large drooping ears, very good mothers, good milkers and meat quality. They also have high growth rate and feed conversion ratio.
Selection of Breed
These are the things you have to observe so you'll know you have chosen to raise an animal with a good breed. This will help in the success of your production.
Genes
The genes of the animal helps a lot in the success or failure of your swine business. The environment, though, contributes, or otherwise, to the performance of you pigs. To improve your production through breeding, select the desired characteristics. Below is a summary of heritability estimates of characteristics of swine:
Trait and Heritability
Length of body - High
Length of legs - High
Number of vertebrates - High
Number of teats - High
Conformation - High
Carcass length - High
Loin eye are - High
Backfat thickness - High
Percent lean cuts of liveweight - High
Ham-loin index - High
Weight of pig approximately 6 months - Moderate
Rate of growth - Moderate
Feed efficiency - Moderate
Litter size of birth - High
Litter size of weaning - High
Weight of pig at birth - High
Choose a boar that has well-developed testicles. The size of the testicles is related to its ability to produce sperm. So do not allow boars that have defects in this area to reproduce, because this is highly hereditary.
A well-arched or straight back is good because it means the animal can move around well for mother pigs, a long body is good, along with even-distanced teats.
Your animal should also have good reproductive characteristics. If it gives birth to NOT less than 8 piglets/birth, it means it has high ovulation rate, low embryo deaths, can produce large quantities of milk, and is a good mother.
Good feed efficiency is also a good trait. This means, it is a trait of a good breed if there needs a lesser amount of feeds to have gain weight. This is trait can be inherited.
Housing and Facilities
Selection of Farm Site
Select a site that is well- ventilated and has good drainage. Damp and unhealthy environment makes the pigs prone to diseases.
Water is also important. The pigs needs lots of water for better performance, and water is also needed to maintain cleanliness and sanitation, as well as to keep the animals cool during warm weather. Put up your hog house in a place where not many visitor/ people go. And for good drainage, a slightly sloping area.
If yours is a backyard operations, you can use locally available materials for roofing, like bamboo, nipa, or anahaw. Use lumber or bamboo for sidings, and a concrete floor. Don't use preservatives on the lumber as this may cause irritation to the animals. Put together in one pen the gestating, farrowing, and nursery pigs. Put together in another pen the growing and finishing animals.
For semi-commercial operations, make a piggery using more permanent materials such as concrete floors and walls, and galvanized iron sheets for the roof. In this pig house, make compartments a) where the pregnant animals stay until farrowing time, b) as a farrowing unit, c) as nursery unit where sows an piglets are kept until weaning, d) as growing unit where pigs are raised form weaning until they reach about 45 kgs. and e) as finishing unit where pigs are kept until they are ready to be marketed.
Plant trees around the area as windbreakers.
Age/Weight : 6-10 weeks(weaning to 35 kg)
Floor space (sq m): 0.5
Height of ceiling (cm): 75
Feeder/ WatererSpace (m): 0.2
Age/Weight : 10-15 weeks(36-60 kg)
Floor space (sq m): 0.7
Height of ceiling (cm): 85
Feeder/ WatererSpace (m): 0.3
Age/Weight : 15-20 weeks(61-90 kg)
Floor space (sq m): 1.0
Height of ceiling (cm): 100
Feeder/ WatererSpace (m): 0.4
The floor of your pen must be concrete, and should be slightly sloped to allow good drainage thus keeping the pen dry and free of organisms that might cause sickness to your animals. Don't make you floor too rough as this may cause sores on the animals, and not too smooth because it will be slippery when wet and is dangerous for pregnant sows.
A farrowing stall reduces crushing of piglets. Put up a farrow stall by placing rails around the pen 20-25 cm from the walls and the floor. Waterers and feeders should be installed 30-40 cm high from the floor for breeders and growing finishing pigs, and 20 cm high for weanlings. Make sure that waterers and feeders hold at least the daily amount of water and feeds by needed by the animals.
Newly born pigs are not able to control their body temperatures until they are 2-3 days. Give the piglets heat by lighting them especially during cold days. Hang the lamp 40-70 cm above the floor, and adjust the height of the bulb upward as the piglets grow larger.
Marketing
Marketing is the last activity you do in raising pigs for business. You should get up to date information of market prices of pork, or where it is needed and how much is needed (supply and demand information).
Hogs are usually sold to middlemen who in turn will act as buyers and sellers for big meat processors. But you can sell direct to these meat processors where you can bargain for a higher price for your produce. But here are tips in marketing your pigs:
a.sell your hogs when they reach 80-90 kilos. If they are heavier than the said weight, they may contain more fats.
b. Allow your mother pig to recover from the stress of milking before selling.
c. You can choose not to sell to middlemen. They are experts in the trade and usually, the producers are in the losing end because the prices are always underestimated.
d. Sell the hogs in weight basis and not in per head basis.
Source: Region 2 Technoguide DA, Swine Raising LDC Technical Bulletin #1 DA
Monday, October 26, 2009
How to Start a Pawnshop Business
How to Start a Pawnshop Business
Pawnbroking activities in the Philippines are governed by Presidential Decree No. 114, otherwise knowm as the Pawnshop Regulation Act. Only Filipinos may own a pawnshop organized as a single proprietorship. For partnerships and corporations, foreign ownership should be limited to 30 percent.
So what's the procedure involved in starting a Pawnshop Business?
1. CALL Bangko Sentral ng Pilipinas (BSP) pawnshop hotline, (02)524-8713, to check if the pawnshop name you want is already taken.
2. Register your business either at the Department of Trade and Industry (DTI), for single proprietorship, or the Securities and Exchange Commission, for partnerships or corporations.
The DTI is at the Trade & Industry Building, Sen. Gil Puyat Ave., Makati. In the provinces, DTI offices are in or near municipal buildings. Application forms are also available at DTI's website, http://www.dti.gov.ph. Only Filipinos may own a pawnshop organized as a single proprietorship. For partnerships and corporations, foreign ownership should be limited to 30 percent.
3. Secure a business permit from the city or municipality where pawnshop will be located.
4. Register with the BSP. See http://www.bsp.gov.ph/regulations/forms.htm for the complete list of requirements. These include permits from the DTI or SEC and the local government, an information sheet, personal data sheets, bank certification of at least P100,000 capital and location sketch.
5. Pay the processing fee of P1,000.
6. It will take two to three weeks for the BSP to process your application. Make sure you open your business within six months after the application is approved or your permit will be revoked.
Source: Jamie Alarcon, Chona Galang, PDI Research
Pawnbroking activities in the Philippines are governed by Presidential Decree No. 114, otherwise knowm as the Pawnshop Regulation Act. Only Filipinos may own a pawnshop organized as a single proprietorship. For partnerships and corporations, foreign ownership should be limited to 30 percent.
So what's the procedure involved in starting a Pawnshop Business?
1. CALL Bangko Sentral ng Pilipinas (BSP) pawnshop hotline, (02)524-8713, to check if the pawnshop name you want is already taken.
2. Register your business either at the Department of Trade and Industry (DTI), for single proprietorship, or the Securities and Exchange Commission, for partnerships or corporations.
The DTI is at the Trade & Industry Building, Sen. Gil Puyat Ave., Makati. In the provinces, DTI offices are in or near municipal buildings. Application forms are also available at DTI's website, http://www.dti.gov.ph. Only Filipinos may own a pawnshop organized as a single proprietorship. For partnerships and corporations, foreign ownership should be limited to 30 percent.
3. Secure a business permit from the city or municipality where pawnshop will be located.
4. Register with the BSP. See http://www.bsp.gov.ph/regulations/forms.htm for the complete list of requirements. These include permits from the DTI or SEC and the local government, an information sheet, personal data sheets, bank certification of at least P100,000 capital and location sketch.
5. Pay the processing fee of P1,000.
6. It will take two to three weeks for the BSP to process your application. Make sure you open your business within six months after the application is approved or your permit will be revoked.
Source: Jamie Alarcon, Chona Galang, PDI Research
How to make Tocino
How to make Tocino
Ingredients and Weight
Shoulder 1.0 kg
Salt 20 g
Sugar 80 g
Prague powder 4 g
MSG 4 g
Black Pepper 4 g
Phosphate 3 g
Water 100 ml
Procedure:
1. Slice the meat across the grain.
2. Dissolve all the ingredients.
3. Mix in the sliced meat thoroughly.
4. Cure in the chiller for 24 hours.
5. Package.
Sausages
How to make Skinless/Fresh Sausage
Ingredients and Weight:
Pork lean trim 600 g
Pork fat 400 g
Salt 18 g
Sugar 90 g
Prague powder 4 g
MSG 4 g
Black Pepper 4 g
Phosphate 3 g
Water 50 ml
Garlic 10 g
Corn starch 10 g
Pineapple Juice 30 ml
Vinegar 10 ml
Anisado Wine 10 ml
How to make Smoked Sausage
Ingredients and Weight:
Pork lean trim 600
Pork fat 400 g
Salt 18 g
Sugar 30 g
Prague powder 4 g
MSG 4 g
Black Pepper 4 g
Phosphate 3 g
Water 50 ml
Garlic 10 g
Corn starch 10 g
Skimmed Milk 5 g
Pineapple Juice 10 ml
Vinegar 10 ml
Anisado Wine 20 ml
Procedure:
1. Grind lean and fat, mix thoroughly.
2. Dissolve all ingredients for each type of sausage per kg meat.
3. Mix ingredients with meat.
4. Cure for 24 hours.
5. Stuff and link
6. Smoked sausage and native sausage are smoked for 3 hours.
7. Chill the smoked sausages.
8. Package and store in the freezer.
Source: www.da.gov.ph
Ingredients and Weight
Shoulder 1.0 kg
Salt 20 g
Sugar 80 g
Prague powder 4 g
MSG 4 g
Black Pepper 4 g
Phosphate 3 g
Water 100 ml
Procedure:
1. Slice the meat across the grain.
2. Dissolve all the ingredients.
3. Mix in the sliced meat thoroughly.
4. Cure in the chiller for 24 hours.
5. Package.
Sausages
How to make Skinless/Fresh Sausage
Ingredients and Weight:
Pork lean trim 600 g
Pork fat 400 g
Salt 18 g
Sugar 90 g
Prague powder 4 g
MSG 4 g
Black Pepper 4 g
Phosphate 3 g
Water 50 ml
Garlic 10 g
Corn starch 10 g
Pineapple Juice 30 ml
Vinegar 10 ml
Anisado Wine 10 ml
How to make Smoked Sausage
Ingredients and Weight:
Pork lean trim 600
Pork fat 400 g
Salt 18 g
Sugar 30 g
Prague powder 4 g
MSG 4 g
Black Pepper 4 g
Phosphate 3 g
Water 50 ml
Garlic 10 g
Corn starch 10 g
Skimmed Milk 5 g
Pineapple Juice 10 ml
Vinegar 10 ml
Anisado Wine 20 ml
Procedure:
1. Grind lean and fat, mix thoroughly.
2. Dissolve all ingredients for each type of sausage per kg meat.
3. Mix ingredients with meat.
4. Cure for 24 hours.
5. Stuff and link
6. Smoked sausage and native sausage are smoked for 3 hours.
7. Chill the smoked sausages.
8. Package and store in the freezer.
Source: www.da.gov.ph
How to Make Ice Cream
How to Make Ice Cream
Ice cream is a delicious frozen food that is a real treat when it’s homemade. Making ice cream at home can be a fun family project with a job for everyone. If you have a hand cranked or electric ice cream freezer, everyone can enjoy a tasty dessert right from the freezer.
The most important ingredients in ice cream are:
• Milk solids, often added as nonfat dry milk, give body to the mixture and allow better whipping.
• Cream, with its higher butterfat content, gives richness and smoothness.
• Eggs, acting as a stabilizing ingredient, provide good texture as well as flavor and the whites are a good whipping agent. Because of the risk of harmful bacteria in raw eggs, you must use pasteurized eggs in uncooked ice cream mix.
• Sugar gives sweetness and minimizes crystallization by lowering the freezing point temperature.
• Gelatin is a stabilizer that binds water to keep ice crystals small.
• Flavorings are added in small amounts and have no effect on the freezing process.
• Fruits are sugared and retard the freezing process, and thus should not be added until the mixture is about half frozen.
Equipment and Supplies
To make homemade ice cream, you need a variety of equipment, including ice, rock salt and a freezer. Metal freezers are preferred, but must be kept clean to prevent rusting. The capacity of the ice bucket should be about two gallons. The mix container will hold about one gallon. You will need at least 20 pounds of ice for each gallon of ice cream and about five pounds of rock salt.
Preparing the Mix
Pour liquid ingredients such as milk, cream or evaporated milk into a large mixing bowl. Whip eggs in separate bowl before adding. Always dissolve gelatin tablet in small amount of hot water. This helps assure dispersion throughout the mix. Dry sugar should be added to the liquid mix while stirring constantly. Unless you purchase all pasteurized ingredients, cook the mix. Use a double boiler to reduce cooking down caused by evaporation and stir continually. Heat to 155º F and hold for 30 minutes. Cool to 45º F or below by placing cold water, then ice water, in the lower part of the double boiler. Keep the ice cream mix covered to prevent bacterial contamination. Have the mix as cold as possible prior to freezing. This reduces time required to freeze and gives you a smoother textured product with fewer large ice crystals.
Use only clean utensils for handling mix. They should be sanitized with heat in the dishwasher or sanitized to destroy all bacteria. A dilute chlorine solution at 100 ppm (1/2 teaspoon bleach per quart of water) can be used for sanitizing.
Stabilizers and emulsifiers other than gelatin and eggs can be used. If so, mix with a little hot water in a cup. Then add to the mix, stirring thoroughly. Otherwise it settles, giving you a thick gummy ice cream at the bottom of the container.
Serving and Storing
Serve ice cream within a few hours of freezing for best results. If held for more than a few hours, keep product at temperatures well below 0º F. Freezing compartments in home refrigerators are seldom cold enough to harden ice cream properly. Temperatures approaching -20º F are ideal. If you plan to hold ice cream, keep it at -10º F or lower. It can be held for months at this temperature.
Vanilla Ice Milk (cooked, with eggs)
2 cups sugar
1 tablespoon unflavored gelatin
1 ½ cups nonfat dry milk
2 quarts whole milk
3 eggs, beaten (use only clean, uncracked eggs)
1 ½ tablespoons vanilla
1. Mix sugar, gelatin, nonfat dry milk and milk in the top of a double boiler. Cook over hot water to a temperature of 175º F.
2. Stir a little of the hot mixture into the beaten eggs, then stir the eggs into the remaining hot mixture.
3. Cook the entire mixture over hot water, while stirring constantly, for 1 minute.
4. Chill immediately by placing the top of the double boiler in ice water. Temperature of the ice milk mix should be 50º F before removing the mix. Add vanilla. Alternately, use pasteurized eggs, omitting steps 1-4 and simply mix dry ingredients (sugar and dry milk) with milk, cream and vanilla. Dissolve gelatin in ¼ cup of hot water. Add to mix and continue with step 5.
5. Pour into a 1-gallon ice cream canister; fill no more than two-thirds full. Refrigerate.
6. Freeze in a handcranked or electric ice cream freezer, packed with a mixture of 1 part rock salt and 6 parts crushed ice. Continue to freeze until the motor starts to labor or resistance is met when cranking.
7. Remove dasher and serve immediately.
This recipe makes 20 half-cup servings (about 2 ½ quarts).
Calories per serving: Approx. 150
Vanilla Ice Cream (cooked, with eggs)
2 cups sugar
2 teaspoons unflavored gelatin
¾ cup nonfat dry milk
1 quart pasteurized whole milk
3 cups whipping cream
4 eggs, beaten (use only clean, uncracked eggs)
2 tablespoons vanilla
1. Mix sugar, gelatin, nonfat dry milk, milk and cream in the top of a double boiler. Blend and heat over hot water until the temperature reaches 175ºF.
2. Stir a small amount of the hot mixture into the beaten eggs, then stir the eggs into the remaining hot mixture.
3. Cook the entire mixture, while stirring constantly, 1 minute longer.
4. Chill immediately by placing the top of the double boiler in ice water. Temperature should be 50ºF before removing from the ice water. Alternately, use pasteurized eggs, omitting steps 1-4 and simply mix dry ingredients (sugar and dry milk) with milk, cream and vanilla. Dissolve gelatin in ¼ cup of hot water. Add to mix and continue with step 5.
5. Pour into a clean ice cream freezer; fill no more than two-thirds full. Refrigerate 3-4 hours or overnight.
6. Freeze in a handcranked or electric ice cream freezer. Pack the outer shell with a mixture of 1 part rock salt and 6 parts crushed ice. Continue the freezing process until the motor labor or stiff resistance is met while cranking.
7. Remove dasher and serve immediately.
This recipe makes 20 half-cup servings (about 2 ½ quarts).
Calories per serving: Approx. 230
Vanilla Ice Cream (uncooked, no eggs)
3 cups pasteurized heavy cream
4 cups pasteurized whole milk
1 ½ cups instant nonfat dry milk
1 ½ cups sugar
1 tablespoon gelatin dissolved in ½ cup of hot water
1 tablespoon vanilla
1. Mix cream, milk, dissolved gelatin and vanilla into a large mixing bowl. Add dry milk and sugar.
2. Pour into a clean ice cream freezer; fill no more than two-thirds full. Refrigerate 3-4 hours or overnight.
3. Freeze in a handcranked or electric ice cream freezer. Pack the outer shell with a mixture of 1 part rock salt and 6 parts crushed ice. Continue the freezing process until the motor labor or stiff resistance is met while cranking.
4. Remove dasher and serve immediately.
Yield: 1 gallon
Source: This publication replaces B2766 Homemade Ice Cream and Ice Milk (1984) by Robert Bradley (retired) and Mary Mennes (retired). Revisions by Steve Ingham. Information included from Making Ice Cream at Home (A76) Circular 566. Pennsylvania State University (out of print). Designer and Editor: Christine Morris, Outreach Specialist, July 2003.
Ice cream is a delicious frozen food that is a real treat when it’s homemade. Making ice cream at home can be a fun family project with a job for everyone. If you have a hand cranked or electric ice cream freezer, everyone can enjoy a tasty dessert right from the freezer.
The most important ingredients in ice cream are:
• Milk solids, often added as nonfat dry milk, give body to the mixture and allow better whipping.
• Cream, with its higher butterfat content, gives richness and smoothness.
• Eggs, acting as a stabilizing ingredient, provide good texture as well as flavor and the whites are a good whipping agent. Because of the risk of harmful bacteria in raw eggs, you must use pasteurized eggs in uncooked ice cream mix.
• Sugar gives sweetness and minimizes crystallization by lowering the freezing point temperature.
• Gelatin is a stabilizer that binds water to keep ice crystals small.
• Flavorings are added in small amounts and have no effect on the freezing process.
• Fruits are sugared and retard the freezing process, and thus should not be added until the mixture is about half frozen.
Equipment and Supplies
To make homemade ice cream, you need a variety of equipment, including ice, rock salt and a freezer. Metal freezers are preferred, but must be kept clean to prevent rusting. The capacity of the ice bucket should be about two gallons. The mix container will hold about one gallon. You will need at least 20 pounds of ice for each gallon of ice cream and about five pounds of rock salt.
Preparing the Mix
Pour liquid ingredients such as milk, cream or evaporated milk into a large mixing bowl. Whip eggs in separate bowl before adding. Always dissolve gelatin tablet in small amount of hot water. This helps assure dispersion throughout the mix. Dry sugar should be added to the liquid mix while stirring constantly. Unless you purchase all pasteurized ingredients, cook the mix. Use a double boiler to reduce cooking down caused by evaporation and stir continually. Heat to 155º F and hold for 30 minutes. Cool to 45º F or below by placing cold water, then ice water, in the lower part of the double boiler. Keep the ice cream mix covered to prevent bacterial contamination. Have the mix as cold as possible prior to freezing. This reduces time required to freeze and gives you a smoother textured product with fewer large ice crystals.
Use only clean utensils for handling mix. They should be sanitized with heat in the dishwasher or sanitized to destroy all bacteria. A dilute chlorine solution at 100 ppm (1/2 teaspoon bleach per quart of water) can be used for sanitizing.
Stabilizers and emulsifiers other than gelatin and eggs can be used. If so, mix with a little hot water in a cup. Then add to the mix, stirring thoroughly. Otherwise it settles, giving you a thick gummy ice cream at the bottom of the container.
Serving and Storing
Serve ice cream within a few hours of freezing for best results. If held for more than a few hours, keep product at temperatures well below 0º F. Freezing compartments in home refrigerators are seldom cold enough to harden ice cream properly. Temperatures approaching -20º F are ideal. If you plan to hold ice cream, keep it at -10º F or lower. It can be held for months at this temperature.
Vanilla Ice Milk (cooked, with eggs)
2 cups sugar
1 tablespoon unflavored gelatin
1 ½ cups nonfat dry milk
2 quarts whole milk
3 eggs, beaten (use only clean, uncracked eggs)
1 ½ tablespoons vanilla
1. Mix sugar, gelatin, nonfat dry milk and milk in the top of a double boiler. Cook over hot water to a temperature of 175º F.
2. Stir a little of the hot mixture into the beaten eggs, then stir the eggs into the remaining hot mixture.
3. Cook the entire mixture over hot water, while stirring constantly, for 1 minute.
4. Chill immediately by placing the top of the double boiler in ice water. Temperature of the ice milk mix should be 50º F before removing the mix. Add vanilla. Alternately, use pasteurized eggs, omitting steps 1-4 and simply mix dry ingredients (sugar and dry milk) with milk, cream and vanilla. Dissolve gelatin in ¼ cup of hot water. Add to mix and continue with step 5.
5. Pour into a 1-gallon ice cream canister; fill no more than two-thirds full. Refrigerate.
6. Freeze in a handcranked or electric ice cream freezer, packed with a mixture of 1 part rock salt and 6 parts crushed ice. Continue to freeze until the motor starts to labor or resistance is met when cranking.
7. Remove dasher and serve immediately.
This recipe makes 20 half-cup servings (about 2 ½ quarts).
Calories per serving: Approx. 150
Vanilla Ice Cream (cooked, with eggs)
2 cups sugar
2 teaspoons unflavored gelatin
¾ cup nonfat dry milk
1 quart pasteurized whole milk
3 cups whipping cream
4 eggs, beaten (use only clean, uncracked eggs)
2 tablespoons vanilla
1. Mix sugar, gelatin, nonfat dry milk, milk and cream in the top of a double boiler. Blend and heat over hot water until the temperature reaches 175ºF.
2. Stir a small amount of the hot mixture into the beaten eggs, then stir the eggs into the remaining hot mixture.
3. Cook the entire mixture, while stirring constantly, 1 minute longer.
4. Chill immediately by placing the top of the double boiler in ice water. Temperature should be 50ºF before removing from the ice water. Alternately, use pasteurized eggs, omitting steps 1-4 and simply mix dry ingredients (sugar and dry milk) with milk, cream and vanilla. Dissolve gelatin in ¼ cup of hot water. Add to mix and continue with step 5.
5. Pour into a clean ice cream freezer; fill no more than two-thirds full. Refrigerate 3-4 hours or overnight.
6. Freeze in a handcranked or electric ice cream freezer. Pack the outer shell with a mixture of 1 part rock salt and 6 parts crushed ice. Continue the freezing process until the motor labor or stiff resistance is met while cranking.
7. Remove dasher and serve immediately.
This recipe makes 20 half-cup servings (about 2 ½ quarts).
Calories per serving: Approx. 230
Vanilla Ice Cream (uncooked, no eggs)
3 cups pasteurized heavy cream
4 cups pasteurized whole milk
1 ½ cups instant nonfat dry milk
1 ½ cups sugar
1 tablespoon gelatin dissolved in ½ cup of hot water
1 tablespoon vanilla
1. Mix cream, milk, dissolved gelatin and vanilla into a large mixing bowl. Add dry milk and sugar.
2. Pour into a clean ice cream freezer; fill no more than two-thirds full. Refrigerate 3-4 hours or overnight.
3. Freeze in a handcranked or electric ice cream freezer. Pack the outer shell with a mixture of 1 part rock salt and 6 parts crushed ice. Continue the freezing process until the motor labor or stiff resistance is met while cranking.
4. Remove dasher and serve immediately.
Yield: 1 gallon
Source: This publication replaces B2766 Homemade Ice Cream and Ice Milk (1984) by Robert Bradley (retired) and Mary Mennes (retired). Revisions by Steve Ingham. Information included from Making Ice Cream at Home (A76) Circular 566. Pennsylvania State University (out of print). Designer and Editor: Christine Morris, Outreach Specialist, July 2003.
Sunday, October 25, 2009
Pinoy Homebased Small Capital Business Ideas
1. HOW TO MAKE YEMA
Ingredients :
1 can condensed milk
12 eggyolks
Mix condensed milk and egg yolks in a sauce pan (a double boiler - which is basically a small pan inside a big pan containing water - works wonder for this). Cook mixture under medium - high heat, stirring continuously until the mixture coagulates and separates from the pan. Cool. Shape into pyramids and wrap with cellophane cut into squares.
You can also make yema bonbons by shaping the yema concoction into balls, and using toothpics, dipping the balls into hot caramelized sugar syrup. Once the caramelized sugar hardens, you can then wrap the balls in colored cellophane
2. HOW TO MAKE STRAWBERRY JAM/PRESSERVE
Materials:
1 kilo strawberry
1 kilo sugar ( either brown, white or mixed )
Citric acid
Procedure:
1. Remove calyx ( the stalk ) from freshly gathered strawberries.
2. Wash strawberries 2-3 times in clean water. After the last washing, place the berries in a flat bamboo basket to drain. Put a basin underneath the basket to collect the drippings. Collected drippings can be used for making vinegar.
3. For every kilogram of strawberries, add 1 kilogram of sugar. Add citric acid in the proportion of 25 grams per 12 kilograms of berries.
4. In a wide pan, put the berries and sugar. Cook with medium fire. Cook until thick in consistency. You can determine if the jam/preserve is cooked by pouring a small amount of the syrup in a cup of cold water. If a soft ball forms, the jam/preserve is cooked.
5. Remove scum and pack immediately in sterilized jars.
6. Seal completely, cool, label and store.
Note:
For strawberry jam, crush the berries.
For strawberry preserves, leave the strawberries whole.
3. HOW TO MAKE STRAWBERRY WINE
Materials:
Extracted strawberry juice from fully ripe berries
Brown sugar
Yeast
Procedure:
1. Remove calyx ( stem ) from fruits and wash well in clean water.
2. Extract juice from fully ripe berries by pressing the fruits manually or with the aid of a blender.
3. For every four cups of extracted juice, add 1 cup of water and 2 ½ cups of brown sugar.
4. Bring the mixture to boil then cool.
5. Add ¼ teaspoon of yeast to every 8 cups of the mixture.
6. Place in suitable containers and allow to ferment for two weeks.
7. Siphon the wine and boil for about 10 minutes.
8. Cool and pack in sterilized bottles.
9. Seal and allow to age for 8 months to one year or longer if desired.
4. HOW TO MAKE STRAWBERRY VINEGAR
Materials:
Drippings collected during washing of the strawberries
Brown sugar
Yeast
Procedure:
1. Measure the drippings collected after third washing of the strawberries for jams and preserves.
2. For every 8 cups of drippings, add 2 cups of brow sugar and ¼ teaspoon of yeast.
3. Ferment as for wine making ( 4-7 steps of strawberry wine making ).
4. Place in suitable containers such as glass jars, plastic pails etc to cool.
5. Add mother vinegar ( processed commercial vinegar ) in the proportion of 2 cups mother vinegar for every 4 cups of liquid.
6. Ferment until desired acidity is obtained. This will take about 3 months or longer.
Ingredients :
1 can condensed milk
12 eggyolks
Mix condensed milk and egg yolks in a sauce pan (a double boiler - which is basically a small pan inside a big pan containing water - works wonder for this). Cook mixture under medium - high heat, stirring continuously until the mixture coagulates and separates from the pan. Cool. Shape into pyramids and wrap with cellophane cut into squares.
You can also make yema bonbons by shaping the yema concoction into balls, and using toothpics, dipping the balls into hot caramelized sugar syrup. Once the caramelized sugar hardens, you can then wrap the balls in colored cellophane
2. HOW TO MAKE STRAWBERRY JAM/PRESSERVE
Materials:
1 kilo strawberry
1 kilo sugar ( either brown, white or mixed )
Citric acid
Procedure:
1. Remove calyx ( the stalk ) from freshly gathered strawberries.
2. Wash strawberries 2-3 times in clean water. After the last washing, place the berries in a flat bamboo basket to drain. Put a basin underneath the basket to collect the drippings. Collected drippings can be used for making vinegar.
3. For every kilogram of strawberries, add 1 kilogram of sugar. Add citric acid in the proportion of 25 grams per 12 kilograms of berries.
4. In a wide pan, put the berries and sugar. Cook with medium fire. Cook until thick in consistency. You can determine if the jam/preserve is cooked by pouring a small amount of the syrup in a cup of cold water. If a soft ball forms, the jam/preserve is cooked.
5. Remove scum and pack immediately in sterilized jars.
6. Seal completely, cool, label and store.
Note:
For strawberry jam, crush the berries.
For strawberry preserves, leave the strawberries whole.
3. HOW TO MAKE STRAWBERRY WINE
Materials:
Extracted strawberry juice from fully ripe berries
Brown sugar
Yeast
Procedure:
1. Remove calyx ( stem ) from fruits and wash well in clean water.
2. Extract juice from fully ripe berries by pressing the fruits manually or with the aid of a blender.
3. For every four cups of extracted juice, add 1 cup of water and 2 ½ cups of brown sugar.
4. Bring the mixture to boil then cool.
5. Add ¼ teaspoon of yeast to every 8 cups of the mixture.
6. Place in suitable containers and allow to ferment for two weeks.
7. Siphon the wine and boil for about 10 minutes.
8. Cool and pack in sterilized bottles.
9. Seal and allow to age for 8 months to one year or longer if desired.
4. HOW TO MAKE STRAWBERRY VINEGAR
Materials:
Drippings collected during washing of the strawberries
Brown sugar
Yeast
Procedure:
1. Measure the drippings collected after third washing of the strawberries for jams and preserves.
2. For every 8 cups of drippings, add 2 cups of brow sugar and ¼ teaspoon of yeast.
3. Ferment as for wine making ( 4-7 steps of strawberry wine making ).
4. Place in suitable containers such as glass jars, plastic pails etc to cool.
5. Add mother vinegar ( processed commercial vinegar ) in the proportion of 2 cups mother vinegar for every 4 cups of liquid.
6. Ferment until desired acidity is obtained. This will take about 3 months or longer.
Ways to reduce expenses & save thousands monthly
10 Ways to reduce expenses & save thousands monthly
It is not difficult to see that Filipino society encourages a culture of spending. Anywhere you look, especially in urban areas, you will find gigantic billboards that are so appealing to your senses you can’t wait to buy the item advertised. Prime spots in broadsheets, radio and TV are so full of advertisements that it makes it hard for people to resist spending even on items they don’t need.
While lack of money is one of the reasons why most Filipinos don’t have enough savings; it’s not the only one! Many individuals who are capable of saving are not able to do so because they overspend. It may sound impossible but you can actually find money to save with your current income (regardless of high or low it is) by simply changing your spending habits.
If you take the time to list down all your expenses over a couple of months you will be shocked to find out that you are spending on a lot of things that you don’t need or can live without. You will also be surprised to know that the little, cheap things you buy can easily add up to a substantial amount over time. You don’t have to look far to find money to save, you just have to reduce or eliminate unnecessary expenses. Below are ten expense busters that are guaranteed to free up hundreds or thousands in cash every month and boost your savings if you follow them consistently.
1. Be contented with what you have.
Stop comparing yourself and your family with other people. If you always try to keep up with your relatives, friends & neighbors you will soon find yourself buying things you really can’t afford. Envy can be a very costly emotion; it can lead you to financial disaster. Your worth as a person or as a family, is not measured by your material possession; so be satisfied with what you have.
2. Avoid all forms of gambling.
A compulsive gambler would sell the shirt on his back just to have money to gamble. He won’t hesitate giving up everything he has just to get the chance to win. So before you get hooked, stop gambling whether it’s legal or illegal. Many gamblers have lost not just their lifetime savings and home but also their families.
3. Quit smoking, drink moderately and don’t do drugs.
Smoking, drinking and drugs are not only bad for your health but they’re very bad for your wallet. The money you spend on these unhealthy habits will easily add up to hundreds of thousands or even over a million over a few decades (see table at the end of this article). Add to this, the amount you need for medication to treat its ill effects and you can just imagine how much money you’re wasting. Worse you can die from excessive smoking, drinking and doing drugs; and like gambling it can ruin the family.
4. Take public transport.
If you live in the outskirts of Metro Manila, like Cavite, Bulacan and Laguna, you can save several thousands every month just by opting to commute instead of driving your own car in going to work. With the high cost of fuel, traveling in a private vehicle is no longer practical. Taking public transport is still the most cost-effective way to move around; just don’t take a taxi all the time.
5. Bring lunch to work.
Food sold in canteens, fast foods and restaurants costs 100% to 300% more than home-cooked meals, so try to find time to prepare food to bring to work. You could be saving more than a thousand pesos a month by doing so and get to double your savings if you spouse will do the same. It certainly is well worth your time to cook your own lunch.
6. Cut coffee and soft drink consumption.
Addiction to caffeine can be very expensive especially if you are fond of those sold by high-end coffee shops. A daily dose of P100-a-cup coffee on your way to work will set you back at least P2,000 every month. It would be wise for heavy coffee drinkers to get their caffeine from cheaper alternatives. Soft drinks may not be as expensive but it will still add up to huge amounts over the years; and there’s also diabetes to worry about which is expensive to manage.
7. Do not buy on credit; use cash.
Studies have shown that paying in cash will cut down your spending by 25% to 30%. If you are the type who is easily persuaded to buy things on impulse it’s best that you leave your credit card at home; much more so if there’s a midnight sale. You can manage your expenses better by paying cash because you stop spending when no money is left. If you use your credit card, try to pay in full every month so you won’t have to pay interest… and still get the reward points.
8. Ease up on signature labels & avoid expensive activities.
End your love affair with signature labels because it is very costly. They cost many more times than a less known & less expensive brand. Sometimes the only difference is just the label; quality-wise they are the same. Signature clothing can score you “pogi” points but you will score more if you know how to carry yourself even with inexpensive clothing. Do not engage in expensive hobbies, fitness or leisure activities; instead do something as exciting but easier on the pocket. You will get the same health benefits by running around your subdivision instead of working the treadmill in an expensive gym.
9. Avoid excessive texting, internet chatting & PC gaming.
Its bad for your fingers, your hands, your back and your wallet and still many people are into it. They’re but a few of the bad effects of technology; its addiction in a high-tech world. Don’t allow yourself to become obsessed with these seemingly passive activities because it will definitely burn a hole in your pocket. Like many other types of addiction they’re not good for family relations.
10. Refrain from having extra-marital affairs.
People don’t openly talk about it but extra-marital affairs can be very expensive. The “other partner” is usually high maintenance and most of the times they are only in it for the money. Even with a good income, taking care of a family, even a small one, is already a formidable financial challenge. A costly addition is going to put a severe strain on your finances and it will be extremely difficult for you to save.
Following consistently the strategies above will help plug your “spending leaks” (expenses you can live without) and should drastically cut down your monthly expenses. Look at the table below and see how the money you save from cutting down on unnecessary expenses will grow over the years.
If you dream of retiring a multi-millionaire then make a conscious effort to reduce or eliminate unnecessary expenses. Such a smart move will let you add hundreds of thousands or millions to your nest egg in the next 20 to 30 years and the earlier you do this the bigger your savings will be. A 25-year old who will stick to the ten expense busters throughout his working life can look forward to a comfortable retirement with P10million or more in savings. Remember, the buying decisions you make today will greatly impact the level of your savings in the future; so spend your money wisely!
It is not difficult to see that Filipino society encourages a culture of spending. Anywhere you look, especially in urban areas, you will find gigantic billboards that are so appealing to your senses you can’t wait to buy the item advertised. Prime spots in broadsheets, radio and TV are so full of advertisements that it makes it hard for people to resist spending even on items they don’t need.
While lack of money is one of the reasons why most Filipinos don’t have enough savings; it’s not the only one! Many individuals who are capable of saving are not able to do so because they overspend. It may sound impossible but you can actually find money to save with your current income (regardless of high or low it is) by simply changing your spending habits.
If you take the time to list down all your expenses over a couple of months you will be shocked to find out that you are spending on a lot of things that you don’t need or can live without. You will also be surprised to know that the little, cheap things you buy can easily add up to a substantial amount over time. You don’t have to look far to find money to save, you just have to reduce or eliminate unnecessary expenses. Below are ten expense busters that are guaranteed to free up hundreds or thousands in cash every month and boost your savings if you follow them consistently.
1. Be contented with what you have.
Stop comparing yourself and your family with other people. If you always try to keep up with your relatives, friends & neighbors you will soon find yourself buying things you really can’t afford. Envy can be a very costly emotion; it can lead you to financial disaster. Your worth as a person or as a family, is not measured by your material possession; so be satisfied with what you have.
2. Avoid all forms of gambling.
A compulsive gambler would sell the shirt on his back just to have money to gamble. He won’t hesitate giving up everything he has just to get the chance to win. So before you get hooked, stop gambling whether it’s legal or illegal. Many gamblers have lost not just their lifetime savings and home but also their families.
3. Quit smoking, drink moderately and don’t do drugs.
Smoking, drinking and drugs are not only bad for your health but they’re very bad for your wallet. The money you spend on these unhealthy habits will easily add up to hundreds of thousands or even over a million over a few decades (see table at the end of this article). Add to this, the amount you need for medication to treat its ill effects and you can just imagine how much money you’re wasting. Worse you can die from excessive smoking, drinking and doing drugs; and like gambling it can ruin the family.
4. Take public transport.
If you live in the outskirts of Metro Manila, like Cavite, Bulacan and Laguna, you can save several thousands every month just by opting to commute instead of driving your own car in going to work. With the high cost of fuel, traveling in a private vehicle is no longer practical. Taking public transport is still the most cost-effective way to move around; just don’t take a taxi all the time.
5. Bring lunch to work.
Food sold in canteens, fast foods and restaurants costs 100% to 300% more than home-cooked meals, so try to find time to prepare food to bring to work. You could be saving more than a thousand pesos a month by doing so and get to double your savings if you spouse will do the same. It certainly is well worth your time to cook your own lunch.
6. Cut coffee and soft drink consumption.
Addiction to caffeine can be very expensive especially if you are fond of those sold by high-end coffee shops. A daily dose of P100-a-cup coffee on your way to work will set you back at least P2,000 every month. It would be wise for heavy coffee drinkers to get their caffeine from cheaper alternatives. Soft drinks may not be as expensive but it will still add up to huge amounts over the years; and there’s also diabetes to worry about which is expensive to manage.
7. Do not buy on credit; use cash.
Studies have shown that paying in cash will cut down your spending by 25% to 30%. If you are the type who is easily persuaded to buy things on impulse it’s best that you leave your credit card at home; much more so if there’s a midnight sale. You can manage your expenses better by paying cash because you stop spending when no money is left. If you use your credit card, try to pay in full every month so you won’t have to pay interest… and still get the reward points.
8. Ease up on signature labels & avoid expensive activities.
End your love affair with signature labels because it is very costly. They cost many more times than a less known & less expensive brand. Sometimes the only difference is just the label; quality-wise they are the same. Signature clothing can score you “pogi” points but you will score more if you know how to carry yourself even with inexpensive clothing. Do not engage in expensive hobbies, fitness or leisure activities; instead do something as exciting but easier on the pocket. You will get the same health benefits by running around your subdivision instead of working the treadmill in an expensive gym.
9. Avoid excessive texting, internet chatting & PC gaming.
Its bad for your fingers, your hands, your back and your wallet and still many people are into it. They’re but a few of the bad effects of technology; its addiction in a high-tech world. Don’t allow yourself to become obsessed with these seemingly passive activities because it will definitely burn a hole in your pocket. Like many other types of addiction they’re not good for family relations.
10. Refrain from having extra-marital affairs.
People don’t openly talk about it but extra-marital affairs can be very expensive. The “other partner” is usually high maintenance and most of the times they are only in it for the money. Even with a good income, taking care of a family, even a small one, is already a formidable financial challenge. A costly addition is going to put a severe strain on your finances and it will be extremely difficult for you to save.
Following consistently the strategies above will help plug your “spending leaks” (expenses you can live without) and should drastically cut down your monthly expenses. Look at the table below and see how the money you save from cutting down on unnecessary expenses will grow over the years.
If you dream of retiring a multi-millionaire then make a conscious effort to reduce or eliminate unnecessary expenses. Such a smart move will let you add hundreds of thousands or millions to your nest egg in the next 20 to 30 years and the earlier you do this the bigger your savings will be. A 25-year old who will stick to the ten expense busters throughout his working life can look forward to a comfortable retirement with P10million or more in savings. Remember, the buying decisions you make today will greatly impact the level of your savings in the future; so spend your money wisely!
Guides to savings & wealth
What it means to be truly wealthy?
Would you be able to recognize a rich person just by looking at him? Probably! Most people can clearly imagine how a wealthy person would look like; someone with a huge salary, nice clothes, expensive jewelries, nice big house, drives a car, eats at fancy restaurants and mingles with the famous and powerful people in society. Such a person could really be rich but not all of them are! Some of them could also be suffering from financial difficulties and “baon din sa utang” just like many Filipinos.
If you can’t say for sure that a person is rich based on his looks, his actions & what he appears to own, ika nga “mukhang mayaman”, how then can you tell with certainty if someone is wealthy or not? We use a simple rule and it’s neither spiritiual nor philosophical in nature; just plain economic common sense:
“You are truly wealthy if you can continue to live comfortably your desired way of life even if you stop working for a living!”
This statement implies that a company Vice President who earns a couple hundred thousand of pesos monthly, owns a big house in a first-class subdivision, drives a sports utility vehicle, wines & dines at classy restaurants and a high roller at the casino is not considered wealthy if he cannot sustain this lifestyle the moment he stops working. A person may look rich, but he is not really wealthy if he has to drastically change his lifestyle (and forced to give up his wasteful leisure activities) just to survive in the event that he loses his job or his main business goes bankrupt. On the other hand, an ordinary person can be truly rich if he can sustain his simple way of life even if he doesn’t work a single day in his life ever again.
You should understand that true wealth has a lot to do with the lifestyle you choose; not just about how much money you have. Having millions in the bank doesn’t automatically make you rich (as we have defined it). If your extravagant lifestyle drives you to spend millions also, you are no better off than a regular low-income worker who only has enough money to meet his family’s basic needs. If both of you will suddenly lose your sources of income, the low-income earner will most likely survive longer than you, a so-called “millionaire.” In such a situation where he will “out-survive” you, we can consider the regular guy as wealthier (or put in another way, you are “poorer” than the other guy). So choose your desired lifestyle carefully. Better yet go for a simple way of life. The simpler it is, the easier it will be for you to achieve true wealth.
If you believe you are already financially stable now, try to imagine what would happen if your regular income suddenly stops coming. Would your family survive without having to alter your way of life? And for how long? Great if you can continue to have a happy & comfortable existence for the rest of your life; that means you are really wealthy. However, if you need to make a major change in your lifestyle to ensure your family’s long-term survival or you are not sure at all if you can even survive, then you really have to work at improving your financial condition. This is where Pinoy Smart Savers can help; by providing you with practical guidance about money management and wealth-building.
Unlike some people who are born rich, the average Filipino will have to exert a lot of effort to achieve true wealth; it will take a lot of sacrifices and it will take many years to attain. But don’t be discouraged because it can be done during your lifetime. With discipline, commitment, unwavering determination, relentless drive, “sipag at tiyaga,” the right attitude and adequate knowledge about personal finance you can do it. Kaya mo Pinoy! It begins with “believing” that regardless of what you have right now and whatever your level of income is, you have the ability to become truly wealthy. You also have to convince yourself that having a lot of money has nothing to do with your worth as a person. People who say otherwise do not understand what it means to be really rich and probably have low self-esteem.
Approach your journey towards true wealth and financial freedom with a positive outlook & high self-esteem and it will become easier and more enjoyable. And the next time you see someone who “seems” to have everything and “looks” wealthy, smile, because you could be “richer” than the person.
The importance of saving
Building wealth requires that you consistently save money over the years. Besides being one of most effective ways way to achieve true wealth there are three other important reasons why every Filipino needs to save.
1. Survive a financial crisis
Sooner or later every family has to face some sort of financial crisis. This financial crisis could be in the form of accidents, illness, loss of employment, failure of a business or sudden death of the family’s breadwinner. The amount of savings the family has will ultimately determine how well they can cope with a financial crisis. You may survive with little savings but chances are you will get into debt that could take years or even a lifetime to wipe out.
Sometimes the lack of savings can even make the situation worse, like a family member dying unnecessarily due to lack of funds for proper medical care. “Saving for the rainy days” will spare your family from huge financial losses and ensure your survival when a crisis strikes. You will have peace of mind and you can sleep better at night knowing that whenever a financial emergency comes your way, “kaya mong malampasan!”
2. Improve the lives and economic well-being of the family
It is nearly impossible to buy anything of high value if you do not have any savings. Adequate savings can help you buy a nice, decent house, a car, pay for your children’s quality education or allow you to invest in a business. While it’s true that money cannot buy happiness, it can certainly buy things that will improve the quality of life of your family. It also allows you to indulge in occasional simple pleasures that promote family bonding.
It can also do wonders for your marriage. Many couples quarrel and even break-up over money matters. With a healthy level of savings there would be one less important thing to argue about. It is alright to aspire and work hard to become wealthy so you can give your family a good, but not extravagant, life. It is not greed; it’s TLC (tender loving care) para sa pamilya.
3. Enjoy your golden years
With great advances in medical & health care and greater awareness about fitness & healthy living, many of us can expect to live to a ripe old age. It would be such a pity if you just leave it up to the government to take care of your needs once you have retired. It is also unfair to your children and relatives to obligate them to support you when you grow old. The money you’ll get from SSS or GSIS will barely feed you and you could find yourself working way past the age of 65 (or totally dependent on your children) if you do not prepare well for your retirement.
Today, it is common to see individuals in their late 60s or 70s still working for a living. A lifetime of saving would have spared them from going through this ordeal in their twilight years. The only way to ensure that your golden years will shine is for you to start building TODAY the funds you will need for the future. Starting early will allow you to retire early, giving you more time to enjoy the fruits of your hard work. And if you choose to work after retirement, it’s because “gusto mo at hindi dahil kailangan mo!”
Obstacles to saving and how to overcome them
Most people believe that saving is very important, yet more than 90% of Filipinos have too little or no savings at all to shield them from a financial storm. People come up with countless excuses to justify why they don’t have any savings. Below are seven obstacles and barriers that “prevent” (or in most cases used as excuses by) many Filipinos from saving consistently.
1. Lack of sufficient income
A huge number of Filipinos are below poverty level which means they can barely provide for their basic needs and there is simply no money to save. Many reason out that there’s only enough money to cover for the family’s regular expenses, so what’s there to save?
Instead of resigning yourself to a lifetime of low income that’s hardly sufficient, use it as a challenge. If the problem is lack of income then find ways to increase your earnings. Do something to rise above your predicament. Adversity, they say, is the mother of creativity. The burning desire to overcome their less than desirable condition has led self-made billionaires like John Gokongwei and Manny Villar to rise to the top.
2. Poor spending habits
Way too many people have very poor spending habits; wasting their money on a lot of things that they don’t really need. Most of them seem to make it a point to spend all the money that gets into their hands even if they don’t have to. Worse, some people “spend” their money even before they have earned it (your credit card allows you to do that).
Regardless of your income you should be able to save, even a little, if you break out of this habit of irresponsible & reckless spending. Always strive to live within your means. Spend less than what you earn and spend your money wisely;
3. Lack of patience
When it comes to growing money, patience is a virtue a lot of Filipinos don’t have. They want to get rich as quickly as possible; that is why many fall victim to investment scams. They are easily attracted to get-rich-quick schemes that promise unbelievably high “guaranteed” profits without having to work for it. Many can't wait for their money to grow to the level that they desire so they give up on saving and instead choose to try their luck on gambling.
Building wealth is a slow process that requires systematic & consistent saving over many years. It’s not some kind of magic bean that can grow to great heights overnight. Be patient and be persistent in saving; do not focus on how slow your money is growing. Instead look at how near you’re getting to your financial goals with every peso you save.
4. Procrastination
The “mamaya na” habit of Filipinos are so prevalent in our society that is shows up in almost everything we do; even with saving. Many put off saving for another day… and then another… and then another, only to find out later that they’ve run out of time. When a person lands his first job, instead of saving he indulges in everything his money can buy as a reward for the sacrifices he endured in college, saying “bata pa ako, enjoy muna, tsaka na lang yung savings.”
Then he ties the knot and settles down and puts off saving again for an indefinite time in the future because “mag-eenjoy muna kami ni misis at marami pang bibilhin!” The kids come along and saving becomes more difficult because of the added expenses especially when they get to college. Late in their careers, they still don’t have any savings and both parents are continue to work their butts off to provide for the family. Finally, they spend the rest of their lives thinking about what happened and what could’ve been done to make their retirement much more comfortable.
Don’t allow yourself to go down this path. Start saving early and don’t wait for the “right time” to start, because the right time is NOW!
5. Close sense of community
Filipinos put a lot of value on culture and tradition even if it’s undesirable. Growing up in a poor society seems to prevent them from taking steps to improve their financial condition. Most people living in poor communities are not likely to desire for a better life. If they do have the desire, it is not strong enough to drive them into action. “Isinilang kaming mahirap, mamamatay kaming mahirap” is a common statement of resignation to their fate.
Don’t allow the mistaken belief about “the poor getting poorer and the rich getting richer in our society” hold you back from striving to rise above adversity. As long as there are people who have successfully risen above poverty through their own perseverance, there is always hope that you can, too.
6. Parental & peer pressure
Poor parents usually fail to encourage their kids to seek financial freedom, much less teach them about saving. There are also parents who pressure their children for regular financial support which affects their capacity to save.
Responsible parents should encourage their children to strive for a better life regardless of their present financial condition and teach them the right saving habits and proper money management even if it means they have to learn it first themselves.
Filipinos are known to be “mabarkada.” Unfortunately some barkada will try to influence their friends to abandon desires for a better life because they’re having too much fun spending all their money or it’s “suntok sa buwan.” People who are easily swayed by their barkada may choose to give up saving and working hard rather than risk getting kicked out of the group.
Do not let anyone dictate your future. Avoid people with “crab mentality,” who will pull you down every time you take a step going up. Surround yourself with people who will support and motivate you to reach for your dreams. Look up to highly successful people; read and learn more about them. Make them your personal role models and let them inspire you in your own journey towards success.
7. Lack of understanding about personal finance
There are people who are capable of saving but still fail to do so because they do not know how and nobody bothered to teach them. In short, they are financially illiterate. People who are lacking in financial intelligence will not be able apply strategies for saving effectively or identify investment opportunities which can greatly boost their savings. Those who do not have adequate understanding about personal finance can also easily fall victim to dubious investment schemes as well as to expensive & predatory loans that can wreck havoc on their finances or wipe out their lifetime savings.
At every opportunity, educate yourself about personal finance; PinoySmartSavers allows you do to that for free. Read books and attend seminars to learn more about saving, money management & investment strategies. Many people frown on spending a few hundred pesos for a book or a couple of thousand pesos for a seminar. They would rather spend their money on beer and endless partying, a nice pair of jeans or shoes, a new cellphone or other things that don’t add any value to their savings. What they don’t realize is that the knowledge they acquire from these books and seminars could help them build hundreds of thousands or millions in savings and could very well be their ticket to becoming rich. You do not get rich by spending!
You don’t have to become a guru on personal finance to become wealthy. You only need to know the basics, enough to allow you to manage your money properly and make smart investment moves. In fact, too much information can lead to confusion and can do more harm than good.
The many obstacles to saving look very formidable but these can be overcome. Having the right attitude, discipline and strong determination, supported by an adequate level of financial literacy, will break down these barriers so you can be well on your way towards financial freedom.
Simple strategy to save effectively
Pinoys are known to be big spenders even if they don’t have much to spend. (We all know the story of how a family will subsist on “tuyo” the whole year so they can have a lavish feast come fiesta time.) Often, long before they receive some money (their salary or bonus for example) they already have a good idea on how & where to spend it and saving is farthest from their minds.
The typical Filipino’s idea about savings can be shown in this simple formula:
It says that once he receives his monthly pay, his first priority is to spend, spend, spend. If, and this is a big if, there’s anything left, this will go to his savings. This is wrong! If you follow this formula, chances are you will not be able to save systematically and attaining financial stability could be very difficult.
Due to the Filipinos’ penchant for spending they have the tendency to use up all the money that gets into their hands. There will always be new things to buy and as long as they have money in their pockets they will find a way to spend it. With still many days to go before the next payday, many would have run out of money or could barely survive.
As a result, many Pinoys often end-up with zero or even “negative” savings. Negative savings means you are in debt. It means you are spending more than what you earn in a month; this is possible with your “trusty” credit card! Since you have to pay this debt, your expenses increase in the succeeding months, making it even more difficult to save. This cycle of getting paid, spending and ending with zero savings or debt, repeats after month after month after month.
Although the formula above does not represent the right idea about savings it does tell us something very important. If you spend all your earnings, your savings will be zero and if you spend more than you earn you will be in debt. Having the ability to save is not an issue of how much you’re earning but rather a matter of how much you are spending. A person can either be a saver or a spender. The spender sticks to the formula above and so regardless of how big his income is, he can still be broke. If you really want to save, follow this simple rule: “live within your means!” or “spend less than you earn!”
A bank manager once narrated how amazed she was at the “fat” bank account of her staff, which was much bigger than her savings (which practically negligible) although she’s earning a lot more. The reason, which the manager herself suggested, was that she and her fellow officers already made plans and were excited about how to spend their money months before they actually got their bonuses. The staff, on the other hand, was also very excited… excited to see her savings grow bigger with her expected bonus. Unfortunately, the staff’s attitude towards money is the exception rather than the rule. It’s no wonder then that more than 90% of Pinoys have low levels of savings.
There will always be savers and spenders in every income group and while anybody can be broke at any income level, almost everyone has the ability to achieve financial security if the right savings formula below is followed.
This formula suggests that you “pay yourself first.” This means that once you get paid the first thing you should do is set aside a portion of your earnings for your savings and use whatever is left to cover for your expenses. Sticking to this idea will force you to control your spending because you need to budget properly what’s left of your funds.
This method of saving will be difficult at first because most people have been conditioned to spend first before setting anything aside for savings. It is a good idea then to start small. Open a special bank account for your savings fund, preferably one that doesn’t come with an ATM card so you’re not easily tempted to withdraw from it. The moment you get hold of your monthly pay, deposit 5% to 20% of your earnings to your savings account before you pay for anything.
If 5% is still too big for you to start, try a smaller amount. The important thing here is that you get started. Once you get used to this new strategy, you can gradually increase the amount you set aside for savings. Ideally 20-25% of your monthly income should be allocated for savings & investments. If shopping can be addictive so can saving, especially when you start to see your funds grow slowly but surely. Don’t be surprised if you will soon be “paying yourself” 30% or more of your monthly income.
(To every rule there is an exception. Paying yourself first will not be a good idea if you are still paying off some debt. To learn more about this read the article on the importance of an emergency fund and the practical steps to get out of debt.)
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Managing income, expenses & debt
Spend wisely to build wealth
Almost everyone has the ability to become financially secure, even the ordinary, low-income employees. But you need to break out of the habit of reckless spending in order to start saving
We hear it all the time. Filipinos complaining that they are unable to save because their income is barely enough to provide for the needs of their families. In fact, many grumble that they are neck-deep in debt. We have also heard of stories about seemingly ‘rich’ people who have 6-digit monthly earnings, nice, big houses and flashy cars yet are in a financial mess just like many of our poor kababayans. This just goes to show that anyone can be broke regardless of how much they earn.
On the bright side of this sad reality is an encouraging fact; that almost everyone has the ability to become truly wealthy or at least financially secure, even the ordinary, low-income employees. Unfortunately, only a few has the discipline and commitment to actually go for it. Majority of Filipinos have very poor spending habits and seem to have been programmed to spend & spend. They need to break out of this habit in order to start saving, which is the foundation for building wealth. Without any savings there’s no way that you can attain stability in your personal finances.
Filipinos are so used to living from payday to payday that they have become quite “skilled” at spending all the money that gets into their hands even if there is no compelling reason to do so. The huge billboards along EDSA, glossy & colorful print ads & the cool commercials with catchy tunes on TV and radio aggravate this culture of irresponsible spending in our society. One newspaper ad even elevated splurging to a divine act, declaring “to shop is human, to splurge divine!” It is no wonder then that people spend first before thinking about saving; a recipe that can lead to financial disaster. Almost always there’s too little or nothing is left to save after making all those payments and purchases; sometimes for things that people don’t really need.
There’s no magic formula for having enough money to save, only one simple solution: spend less than what you earn. In an environment that encourages spending this is easier said than done. Nowadays, it’s even possible to spend more than what you earn with that “plastic” inside your wallet. If you do not keep your expenses from going through the roof, not only will you have zero savings (which scuttles any chance of you getting rich), but you could soon find yourself in a debt hole that’s very difficult to escape. Fortunately, there are practical & “common sense” measures you can take to help you control your expenses and start living beneath your means.
First, take a long, hard look at your current lifestyle. Many people have a lifestyle that they really can’t afford. Many “rich looking” people have become a financial wreck because of their extravagant lifestyle. If you regularly find yourself unable to make ends meet or you’re sinking deeper and deeper into debt despite a big income, a change to a more modest lifestyle may be necessary. Often it will just take little changes to get you on the path to financial stability.
Second, know where your money goes. You can’t manage what you don’t know. Try to list down your expenses for the past 2 months. If you can’t accurately recall them you need to keep track of your daily expenses for the next month or two to give you a good idea on where your money is going. Every day record every expense you make including even the small items like candies, sticks of cigarettes and jeepney or bus fare. At the end of one or two months examine your list. You will probably be shocked to find out that you are spending way too much on things you can do without.
Third, cut down or eliminate unnecessary expenses and you will instantly have money available for savings. Smoking a pack of cigarettes a day may not seem to cost very much. But it would add up to about P1.2 million in 30 years if you would save & invest the money you get to keep by quitting smoking. Do you really need a daily dose of high-priced cappuccino? Cut in half your craving for it and you’ll be more than a million pesos richer 30 years into the future. There are many other things you can live without: alcohol, drugs, designer wear, excessive chatting & gaming at computer shops, too much texting, all forms of gambling, expensive hobbies, etc. Do your health and your pocket a big favor by getting rid of these.
Fourth, create a spending plan and stick to it. A spending plan (a.k.a. budget) helps you control and manage your personal finances. Set a budget for your expenses based on the list you made in steps 2 and 3 . But before anything else, set a budget for your monthly savings. Remember to always pay yourself first. Start with a manageable figure, say 5% of your income, and gradually increase it once you get the hang out of saving. Building wealth doesn’t mean you will have to eat instant noodles the rest of your life so set aside a little amount for leisure activities and for buying some “nice to haves.” A budget will be useless if you don’t stick to it. Make every effort to stay within your budget and do not overspend.
The road to financial stability and wealth is not an easy one. Learning to spend wisely will make your journey a little easier. Remember, almost everyone has the ability to become rich and the choices we make today will determine our financial health in the future. Make the right choice!
Practical steps to get out of debt
There are two main reasons why an individual or family goes into heavy debt. Overspending and the lack of a financial safety net.
Overspending
Spending more than what you earn is the most common reason why people get into a personal debt crisis. The most efficient tool to overspend is the credit card. Next to “5-6,” unpaid credit card debt is the worst kind of debt due to its high interest rates. Because of the relative ease of getting a credit card, millions of Pinoys own one or more credit cards. Today, there are close to 6 million credit cards issued in the Philippines. Sadly, more than 600,000 individuals are delinquent and unable to pay their credit card debts.
Misusing your credit card will quickly get you into serious debt trouble because it allows you to spend money you haven’t earned yet. When you don’t feel the “pain” of parting ways with your hard, cold cash you won’t think twice about buying things even if you don’t need them. For reckless spenders, the opportunity to achieve instant gratification minus the instant drain on one’s pocket makes credit cards so convenient and attractive… and deviously dangerous.
Lack of a financial safety net
Even if you are a wise spender you can still get into a debt hole if you are caught unprepared when a financial crisis strikes. Serious sickness, accidents, untimely death or business failure is likely to hit your family within your lifetime. Just one of these unfortunate events can easily get you into serious debt if you haven’t taken steps to protect your family against the financial impact.
If you are experiencing a debt crisis now, here’s the main strategy to get out of it - “spend less money than you make!” Well, it’s really more difficult than it sounds. But it’s the only way for you to escape the grip of the debt monster. Without any money available to pay down your debt you will be under its mercy till kingdom come. Below are proven steps you can take to help you dig out of a debt hole and nurse your way back to financial health.
Change your lifestyle. This is probably the best strategy you can use to get out and stay out of debt. Yes, it will take a lot of determination to change your spending habits. But you will have to get down to the root of the problem. If your expensive lifestyle led you to this crisis in the first place, changing to a more modest way of life will remove a major cause of your financial troubles.
Create a spending & debt-repayment plan & follow-it. A spending plan or budget allows you to allocate your funds accordingly and will let you monitor your spending closely. Be sure to include in your budget an amount for paying your debt and prioritizing payment for the most expensive loans. Do everything to stick to your spending and debt-repayment plan. Suspend paying yourself first if you’re still paying down debt. It doesn’t make sense to put aside money to a savings account that only pays 1-3% interest annually while you are paying 10%-40% in loan interest.
Cut-up the other credit cards. The more credit cards you have, the more tempting it will be to overspend. You only need one, at most two, credit cards. Choose the card(s) with the most favorable terms (lowest interest rates, penalties and annual fees). Transfer the balances of your other credit cards to the card(s) you will retain.
Avoid new borrowings while you are trying to bring down your debt to a more manageable level. While it’s okay to borrow low-interest money to pay for an existing high-interest loan a much better strategy is to cut down your expenses and use the money saved to pay your debt. Remember to borrow money only for buying “essential” things.
Pay in cash and you will be spending 30% less. Many card users mistakenly think that a credit card is a source of “additional” money which makes it easier for them to overspend. By paying cash all the time, or at least most of the time, you will keep your expenses down because you stop spending when there’s no more money to take out of your wallet. If you have to use your credit card, try to pay off the whole amount every month so you don’t pay interest charges.
Pay more than the minimum to reduce your credit card debt faster. The longer it takes you to repay, the more you will end-up paying. A credit card balance of P50,000 will take more than ten years to wipe out if you just pay the minimum every month; and you will have paid more than P85,000 in interest charges alone.
Pay on time to avoid costly penalty charges. It’s necessary for you to keep a written reminder of your payment due dates especially if you have multiple loans to pay. Put it in a place where you see it everyday and for good measure use your cellphone’s calendar & alarm functions for a timely reminder.
Get yourself insured. An unfortunate incident that will give a serious whack to your finances can happen anytime; it can happen tomorrow. So get your most important assets insured now; this includes you, your family and your properties. You will need life insurance, medical/hospitalization plan, car insurance and real property insurance. If you run a business get it insured. Make sure you don’t let the insurance agents dictate how much insurance you should get. Take an insurance plan that you can comfortably pay even if it means being under-insured. Under is better than nothing.
Use other sources to pay your debt. Look around for other sources of funds that will help you pay off your loans and other borrowings. Read the article ‘where to find money to pay your debt” for ideas on how to pay off your debt faster.
It cannot be overemphasized that the only way for you to get out of a debt hole is to live beneath your means. You don’t have to be a reckless spender or engage in spending binges to get into a debt crisis. Consistently spending even just a little more than what you earn will soon get you into trouble. Be very careful in using your credit card and taking out loans to buy things that are not necessary.
Where to find money to pay your debt.
The main source for money you can use to pay off your debt is your regular income. By reducing your monthly expenses you will free up money to pay down your loans. However, there’s not much money you can squeeze out of a limited income. Below are six other possible sources of money that can help you pay your debt faster.
1. Your savings & investments
If you have money in the bank, use it to pay your loans, especially the ones charging very high interest rates, like your credit card debt. Would you rather pay 3% monthly or 36% yearly in interest for your credit card dues so you can earn an almost insignificant interest of 1% per year from your bank account? That would be very foolish.
Consider this: You have P36,000 worth of credit card debt and P50,000 in a regular savings account that earns 1% yearly. Instead of using your money in the bank you choose to pay your debt through monthly installments for 1 year. So you end-up paying close to P6,000 in interest charges while your money in the bank grows by only P400 (after deducting withholding taxes). Be wise, make the more intelligent move.
As long as your savings or investments are earning way below the interest you’re paying for money you borrowed, use it. However, do not use all your money; leave some for your emergency fund. If you don’t and a financial emergency strikes, you will be forced to borrow again; balik din sa dati ang sitwasyon mo!
2. Borrowing against your insurance or pre-need plan
There are insurance and pre-need (pension & educational) plans which allow you to take out a loan against any cash value that the plan has accumulated. The interest rates for this kind of loans are considerably lower than the rates of other consumer loans. So if you have such a plan, go ahead and take out a loan. (If you’re not sure your plan has it, read the “fine print” again or ask your agent.) It’s perfectly alright to borrow “cheap” money to pay off expensive debt.
3. In-house salary loans
Some companies offer their employees salary loans with favorable terms (e.g. 5%-7% interest per year). You can’t get a loan from outside that will charge a lower interest rate. Find out if your company offers salary loans and check out the interest rates. If it’s considerably lower (at least 5% lower) apply for a loan. Just make sure you use it to pay for your high-interest debt; hindi sa bagong sapatos o damit.
4. Selling your belongings
Consider selling some of the things you own and use the money to break free from your debt. Look around the house and see if there are things you can do without. An expensive cellphone is a good candidate for disposal. Sell it (you won’t miss all those features & functions) and buy a cheaper one then use the extra cash to pay off your debt. You can try to pawning some of your jewelries or gadgets. However, pawnshops charge high interest rates (comparable to credit cards), so you might be better off selling them instead; unless they have a sentimental value. But then again you can’t be too sentimental if you are deep in debt.
5. Taking out a loan against your property
For huge debts you can apply for a loan with your real estate or car serving as the collateral. Although interest rates for this type of loans are also quite high, these are still much lower compared to credit card interest rates. As a rule of thumb take out a loan to pay off your debt only if the interest charged is lower than the interest you are currently paying. (But sometimes you will have no other option but to get a more expensive loan to pay off a long overdue debt & keep intact whatever is left of your integrity.)
6. Loan from family & friends
The best source of money for paying your debt is your family, close friends and relatives. If you are honest about your situation and they find you trustworthy, you might be able to borrow from them without having to pay any interest. It can’t get any better than this. However, don’t disappoint them and let them lose their trust in you by not paying them back. Don’t make a promise you can’t keep; hindi ka na makakaulit.
10 Ways to reduce expenses & save thousands monthly
It is not difficult to see that Filipino society encourages a culture of spending. Anywhere you look, especially in urban areas, you will find gigantic billboards that are so appealing to your senses you can’t wait to buy the item advertised. Prime spots in broadsheets, radio and TV are so full of advertisements that it makes it hard for people to resist spending even on items they don’t need.
While lack of money is one of the reasons why most Filipinos don’t have enough savings; it’s not the only one! Many individuals who are capable of saving are not able to do so because they overspend. It may sound impossible but you can actually find money to save with your current income (regardless of high or low it is) by simply changing your spending habits.
If you take the time to list down all your expenses over a couple of months you will be shocked to find out that you are spending on a lot of things that you don’t need or can live without. You will also be surprised to know that the little, cheap things you buy can easily add up to a substantial amount over time. You don’t have to look far to find money to save, you just have to reduce or eliminate unnecessary expenses. Below are ten expense busters that are guaranteed to free up hundreds or thousands in cash every month and boost your savings if you follow them consistently.
1. Be contented with what you have.
Stop comparing yourself and your family with other people. If you always try to keep up with your relatives, friends & neighbors you will soon find yourself buying things you really can’t afford. Envy can be a very costly emotion; it can lead you to financial disaster. Your worth as a person or as a family, is not measured by your material possession; so be satisfied with what you have.
2. Avoid all forms of gambling.
A compulsive gambler would sell the shirt on his back just to have money to gamble. He won’t hesitate giving up everything he has just to get the chance to win. So before you get hooked, stop gambling whether it’s legal or illegal. Many gamblers have lost not just their lifetime savings and home but also their families.
3. Quit smoking, drink moderately and don’t do drugs.
Smoking, drinking and drugs are not only bad for your health but they’re very bad for your wallet. The money you spend on these unhealthy habits will easily add up to hundreds of thousands or even over a million over a few decades (see table at the end of this article). Add to this, the amount you need for medication to treat its ill effects and you can just imagine how much money you’re wasting. Worse you can die from excessive smoking, drinking and doing drugs; and like gambling it can ruin the family.
4. Take public transport.
If you live in the outskirts of Metro Manila, like Cavite, Bulacan and Laguna, you can save several thousands every month just by opting to commute instead of driving your own car in going to work. With the high cost of fuel, traveling in a private vehicle is no longer practical. Taking public transport is still the most cost-effective way to move around; just don’t take a taxi all the time.
5. Bring lunch to work.
Food sold in canteens, fast foods and restaurants costs 100% to 300% more than home-cooked meals, so try to find time to prepare food to bring to work. You could be saving more than a thousand pesos a month by doing so and get to double your savings if you spouse will do the same. It certainly is well worth your time to cook your own lunch.
6. Cut coffee and soft drink consumption.
Addiction to caffeine can be very expensive especially if you are fond of those sold by high-end coffee shops. A daily dose of P100-a-cup coffee on your way to work will set you back at least P2,000 every month. It would be wise for heavy coffee drinkers to get their caffeine from cheaper alternatives. Soft drinks may not be as expensive but it will still add up to huge amounts over the years; and there’s also diabetes to worry about which is expensive to manage.
7. Do not buy on credit; use cash.
Studies have shown that paying in cash will cut down your spending by 25% to 30%. If you are the type who is easily persuaded to buy things on impulse it’s best that you leave your credit card at home; much more so if there’s a midnight sale. You can manage your expenses better by paying cash because you stop spending when no money is left. If you use your credit card, try to pay in full every month so you won’t have to pay interest… and still get the reward points.
8. Ease up on signature labels & avoid expensive activities.
End your love affair with signature labels because it is very costly. They cost many more times than a less known & less expensive brand. Sometimes the only difference is just the label; quality-wise they are the same. Signature clothing can score you “pogi” points but you will score more if you know how to carry yourself even with inexpensive clothing. Do not engage in expensive hobbies, fitness or leisure activities; instead do something as exciting but easier on the pocket. You will get the same health benefits by running around your subdivision instead of working the treadmill in an expensive gym.
9. Avoid excessive texting, internet chatting & PC gaming.
Its bad for your fingers, your hands, your back and your wallet and still many people are into it. They’re but a few of the bad effects of technology; its addiction in a high-tech world. Don’t allow yourself to become obsessed with these seemingly passive activities because it will definitely burn a hole in your pocket. Like many other types of addiction they’re not good for family relations.
10. Refrain from having extra-marital affairs.
People don’t openly talk about it but extra-marital affairs can be very expensive. The “other partner” is usually high maintenance and most of the times they are only in it for the money. Even with a good income, taking care of a family, even a small one, is already a formidable financial challenge. A costly addition is going to put a severe strain on your finances and it will be extremely difficult for you to save.
Following consistently the strategies above will help plug your “spending leaks” (expenses you can live without) and should drastically cut down your monthly expenses. Look at the table below and see how the money you save from cutting down on unnecessary expenses will grow over the years.
If you dream of retiring a multi-millionaire then make a conscious effort to reduce or eliminate unnecessary expenses. Such a smart move will let you add hundreds of thousands or millions to your nest egg in the next 20 to 30 years and the earlier you do this the bigger your savings will be. A 25-year old who will stick to the ten expense busters throughout his working life can look forward to a comfortable retirement with P10million or more in savings. Remember, the buying decisions you make today will greatly impact the level of your savings in the future; so spend your money wisely!
Would you be able to recognize a rich person just by looking at him? Probably! Most people can clearly imagine how a wealthy person would look like; someone with a huge salary, nice clothes, expensive jewelries, nice big house, drives a car, eats at fancy restaurants and mingles with the famous and powerful people in society. Such a person could really be rich but not all of them are! Some of them could also be suffering from financial difficulties and “baon din sa utang” just like many Filipinos.
If you can’t say for sure that a person is rich based on his looks, his actions & what he appears to own, ika nga “mukhang mayaman”, how then can you tell with certainty if someone is wealthy or not? We use a simple rule and it’s neither spiritiual nor philosophical in nature; just plain economic common sense:
“You are truly wealthy if you can continue to live comfortably your desired way of life even if you stop working for a living!”
This statement implies that a company Vice President who earns a couple hundred thousand of pesos monthly, owns a big house in a first-class subdivision, drives a sports utility vehicle, wines & dines at classy restaurants and a high roller at the casino is not considered wealthy if he cannot sustain this lifestyle the moment he stops working. A person may look rich, but he is not really wealthy if he has to drastically change his lifestyle (and forced to give up his wasteful leisure activities) just to survive in the event that he loses his job or his main business goes bankrupt. On the other hand, an ordinary person can be truly rich if he can sustain his simple way of life even if he doesn’t work a single day in his life ever again.
You should understand that true wealth has a lot to do with the lifestyle you choose; not just about how much money you have. Having millions in the bank doesn’t automatically make you rich (as we have defined it). If your extravagant lifestyle drives you to spend millions also, you are no better off than a regular low-income worker who only has enough money to meet his family’s basic needs. If both of you will suddenly lose your sources of income, the low-income earner will most likely survive longer than you, a so-called “millionaire.” In such a situation where he will “out-survive” you, we can consider the regular guy as wealthier (or put in another way, you are “poorer” than the other guy). So choose your desired lifestyle carefully. Better yet go for a simple way of life. The simpler it is, the easier it will be for you to achieve true wealth.
If you believe you are already financially stable now, try to imagine what would happen if your regular income suddenly stops coming. Would your family survive without having to alter your way of life? And for how long? Great if you can continue to have a happy & comfortable existence for the rest of your life; that means you are really wealthy. However, if you need to make a major change in your lifestyle to ensure your family’s long-term survival or you are not sure at all if you can even survive, then you really have to work at improving your financial condition. This is where Pinoy Smart Savers can help; by providing you with practical guidance about money management and wealth-building.
Unlike some people who are born rich, the average Filipino will have to exert a lot of effort to achieve true wealth; it will take a lot of sacrifices and it will take many years to attain. But don’t be discouraged because it can be done during your lifetime. With discipline, commitment, unwavering determination, relentless drive, “sipag at tiyaga,” the right attitude and adequate knowledge about personal finance you can do it. Kaya mo Pinoy! It begins with “believing” that regardless of what you have right now and whatever your level of income is, you have the ability to become truly wealthy. You also have to convince yourself that having a lot of money has nothing to do with your worth as a person. People who say otherwise do not understand what it means to be really rich and probably have low self-esteem.
Approach your journey towards true wealth and financial freedom with a positive outlook & high self-esteem and it will become easier and more enjoyable. And the next time you see someone who “seems” to have everything and “looks” wealthy, smile, because you could be “richer” than the person.
The importance of saving
Building wealth requires that you consistently save money over the years. Besides being one of most effective ways way to achieve true wealth there are three other important reasons why every Filipino needs to save.
1. Survive a financial crisis
Sooner or later every family has to face some sort of financial crisis. This financial crisis could be in the form of accidents, illness, loss of employment, failure of a business or sudden death of the family’s breadwinner. The amount of savings the family has will ultimately determine how well they can cope with a financial crisis. You may survive with little savings but chances are you will get into debt that could take years or even a lifetime to wipe out.
Sometimes the lack of savings can even make the situation worse, like a family member dying unnecessarily due to lack of funds for proper medical care. “Saving for the rainy days” will spare your family from huge financial losses and ensure your survival when a crisis strikes. You will have peace of mind and you can sleep better at night knowing that whenever a financial emergency comes your way, “kaya mong malampasan!”
2. Improve the lives and economic well-being of the family
It is nearly impossible to buy anything of high value if you do not have any savings. Adequate savings can help you buy a nice, decent house, a car, pay for your children’s quality education or allow you to invest in a business. While it’s true that money cannot buy happiness, it can certainly buy things that will improve the quality of life of your family. It also allows you to indulge in occasional simple pleasures that promote family bonding.
It can also do wonders for your marriage. Many couples quarrel and even break-up over money matters. With a healthy level of savings there would be one less important thing to argue about. It is alright to aspire and work hard to become wealthy so you can give your family a good, but not extravagant, life. It is not greed; it’s TLC (tender loving care) para sa pamilya.
3. Enjoy your golden years
With great advances in medical & health care and greater awareness about fitness & healthy living, many of us can expect to live to a ripe old age. It would be such a pity if you just leave it up to the government to take care of your needs once you have retired. It is also unfair to your children and relatives to obligate them to support you when you grow old. The money you’ll get from SSS or GSIS will barely feed you and you could find yourself working way past the age of 65 (or totally dependent on your children) if you do not prepare well for your retirement.
Today, it is common to see individuals in their late 60s or 70s still working for a living. A lifetime of saving would have spared them from going through this ordeal in their twilight years. The only way to ensure that your golden years will shine is for you to start building TODAY the funds you will need for the future. Starting early will allow you to retire early, giving you more time to enjoy the fruits of your hard work. And if you choose to work after retirement, it’s because “gusto mo at hindi dahil kailangan mo!”
Obstacles to saving and how to overcome them
Most people believe that saving is very important, yet more than 90% of Filipinos have too little or no savings at all to shield them from a financial storm. People come up with countless excuses to justify why they don’t have any savings. Below are seven obstacles and barriers that “prevent” (or in most cases used as excuses by) many Filipinos from saving consistently.
1. Lack of sufficient income
A huge number of Filipinos are below poverty level which means they can barely provide for their basic needs and there is simply no money to save. Many reason out that there’s only enough money to cover for the family’s regular expenses, so what’s there to save?
Instead of resigning yourself to a lifetime of low income that’s hardly sufficient, use it as a challenge. If the problem is lack of income then find ways to increase your earnings. Do something to rise above your predicament. Adversity, they say, is the mother of creativity. The burning desire to overcome their less than desirable condition has led self-made billionaires like John Gokongwei and Manny Villar to rise to the top.
2. Poor spending habits
Way too many people have very poor spending habits; wasting their money on a lot of things that they don’t really need. Most of them seem to make it a point to spend all the money that gets into their hands even if they don’t have to. Worse, some people “spend” their money even before they have earned it (your credit card allows you to do that).
Regardless of your income you should be able to save, even a little, if you break out of this habit of irresponsible & reckless spending. Always strive to live within your means. Spend less than what you earn and spend your money wisely;
3. Lack of patience
When it comes to growing money, patience is a virtue a lot of Filipinos don’t have. They want to get rich as quickly as possible; that is why many fall victim to investment scams. They are easily attracted to get-rich-quick schemes that promise unbelievably high “guaranteed” profits without having to work for it. Many can't wait for their money to grow to the level that they desire so they give up on saving and instead choose to try their luck on gambling.
Building wealth is a slow process that requires systematic & consistent saving over many years. It’s not some kind of magic bean that can grow to great heights overnight. Be patient and be persistent in saving; do not focus on how slow your money is growing. Instead look at how near you’re getting to your financial goals with every peso you save.
4. Procrastination
The “mamaya na” habit of Filipinos are so prevalent in our society that is shows up in almost everything we do; even with saving. Many put off saving for another day… and then another… and then another, only to find out later that they’ve run out of time. When a person lands his first job, instead of saving he indulges in everything his money can buy as a reward for the sacrifices he endured in college, saying “bata pa ako, enjoy muna, tsaka na lang yung savings.”
Then he ties the knot and settles down and puts off saving again for an indefinite time in the future because “mag-eenjoy muna kami ni misis at marami pang bibilhin!” The kids come along and saving becomes more difficult because of the added expenses especially when they get to college. Late in their careers, they still don’t have any savings and both parents are continue to work their butts off to provide for the family. Finally, they spend the rest of their lives thinking about what happened and what could’ve been done to make their retirement much more comfortable.
Don’t allow yourself to go down this path. Start saving early and don’t wait for the “right time” to start, because the right time is NOW!
5. Close sense of community
Filipinos put a lot of value on culture and tradition even if it’s undesirable. Growing up in a poor society seems to prevent them from taking steps to improve their financial condition. Most people living in poor communities are not likely to desire for a better life. If they do have the desire, it is not strong enough to drive them into action. “Isinilang kaming mahirap, mamamatay kaming mahirap” is a common statement of resignation to their fate.
Don’t allow the mistaken belief about “the poor getting poorer and the rich getting richer in our society” hold you back from striving to rise above adversity. As long as there are people who have successfully risen above poverty through their own perseverance, there is always hope that you can, too.
6. Parental & peer pressure
Poor parents usually fail to encourage their kids to seek financial freedom, much less teach them about saving. There are also parents who pressure their children for regular financial support which affects their capacity to save.
Responsible parents should encourage their children to strive for a better life regardless of their present financial condition and teach them the right saving habits and proper money management even if it means they have to learn it first themselves.
Filipinos are known to be “mabarkada.” Unfortunately some barkada will try to influence their friends to abandon desires for a better life because they’re having too much fun spending all their money or it’s “suntok sa buwan.” People who are easily swayed by their barkada may choose to give up saving and working hard rather than risk getting kicked out of the group.
Do not let anyone dictate your future. Avoid people with “crab mentality,” who will pull you down every time you take a step going up. Surround yourself with people who will support and motivate you to reach for your dreams. Look up to highly successful people; read and learn more about them. Make them your personal role models and let them inspire you in your own journey towards success.
7. Lack of understanding about personal finance
There are people who are capable of saving but still fail to do so because they do not know how and nobody bothered to teach them. In short, they are financially illiterate. People who are lacking in financial intelligence will not be able apply strategies for saving effectively or identify investment opportunities which can greatly boost their savings. Those who do not have adequate understanding about personal finance can also easily fall victim to dubious investment schemes as well as to expensive & predatory loans that can wreck havoc on their finances or wipe out their lifetime savings.
At every opportunity, educate yourself about personal finance; PinoySmartSavers allows you do to that for free. Read books and attend seminars to learn more about saving, money management & investment strategies. Many people frown on spending a few hundred pesos for a book or a couple of thousand pesos for a seminar. They would rather spend their money on beer and endless partying, a nice pair of jeans or shoes, a new cellphone or other things that don’t add any value to their savings. What they don’t realize is that the knowledge they acquire from these books and seminars could help them build hundreds of thousands or millions in savings and could very well be their ticket to becoming rich. You do not get rich by spending!
You don’t have to become a guru on personal finance to become wealthy. You only need to know the basics, enough to allow you to manage your money properly and make smart investment moves. In fact, too much information can lead to confusion and can do more harm than good.
The many obstacles to saving look very formidable but these can be overcome. Having the right attitude, discipline and strong determination, supported by an adequate level of financial literacy, will break down these barriers so you can be well on your way towards financial freedom.
Simple strategy to save effectively
Pinoys are known to be big spenders even if they don’t have much to spend. (We all know the story of how a family will subsist on “tuyo” the whole year so they can have a lavish feast come fiesta time.) Often, long before they receive some money (their salary or bonus for example) they already have a good idea on how & where to spend it and saving is farthest from their minds.
The typical Filipino’s idea about savings can be shown in this simple formula:
It says that once he receives his monthly pay, his first priority is to spend, spend, spend. If, and this is a big if, there’s anything left, this will go to his savings. This is wrong! If you follow this formula, chances are you will not be able to save systematically and attaining financial stability could be very difficult.
Due to the Filipinos’ penchant for spending they have the tendency to use up all the money that gets into their hands. There will always be new things to buy and as long as they have money in their pockets they will find a way to spend it. With still many days to go before the next payday, many would have run out of money or could barely survive.
As a result, many Pinoys often end-up with zero or even “negative” savings. Negative savings means you are in debt. It means you are spending more than what you earn in a month; this is possible with your “trusty” credit card! Since you have to pay this debt, your expenses increase in the succeeding months, making it even more difficult to save. This cycle of getting paid, spending and ending with zero savings or debt, repeats after month after month after month.
Although the formula above does not represent the right idea about savings it does tell us something very important. If you spend all your earnings, your savings will be zero and if you spend more than you earn you will be in debt. Having the ability to save is not an issue of how much you’re earning but rather a matter of how much you are spending. A person can either be a saver or a spender. The spender sticks to the formula above and so regardless of how big his income is, he can still be broke. If you really want to save, follow this simple rule: “live within your means!” or “spend less than you earn!”
A bank manager once narrated how amazed she was at the “fat” bank account of her staff, which was much bigger than her savings (which practically negligible) although she’s earning a lot more. The reason, which the manager herself suggested, was that she and her fellow officers already made plans and were excited about how to spend their money months before they actually got their bonuses. The staff, on the other hand, was also very excited… excited to see her savings grow bigger with her expected bonus. Unfortunately, the staff’s attitude towards money is the exception rather than the rule. It’s no wonder then that more than 90% of Pinoys have low levels of savings.
There will always be savers and spenders in every income group and while anybody can be broke at any income level, almost everyone has the ability to achieve financial security if the right savings formula below is followed.
This formula suggests that you “pay yourself first.” This means that once you get paid the first thing you should do is set aside a portion of your earnings for your savings and use whatever is left to cover for your expenses. Sticking to this idea will force you to control your spending because you need to budget properly what’s left of your funds.
This method of saving will be difficult at first because most people have been conditioned to spend first before setting anything aside for savings. It is a good idea then to start small. Open a special bank account for your savings fund, preferably one that doesn’t come with an ATM card so you’re not easily tempted to withdraw from it. The moment you get hold of your monthly pay, deposit 5% to 20% of your earnings to your savings account before you pay for anything.
If 5% is still too big for you to start, try a smaller amount. The important thing here is that you get started. Once you get used to this new strategy, you can gradually increase the amount you set aside for savings. Ideally 20-25% of your monthly income should be allocated for savings & investments. If shopping can be addictive so can saving, especially when you start to see your funds grow slowly but surely. Don’t be surprised if you will soon be “paying yourself” 30% or more of your monthly income.
(To every rule there is an exception. Paying yourself first will not be a good idea if you are still paying off some debt. To learn more about this read the article on the importance of an emergency fund and the practical steps to get out of debt.)
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Managing income, expenses & debt
Spend wisely to build wealth
Almost everyone has the ability to become financially secure, even the ordinary, low-income employees. But you need to break out of the habit of reckless spending in order to start saving
We hear it all the time. Filipinos complaining that they are unable to save because their income is barely enough to provide for the needs of their families. In fact, many grumble that they are neck-deep in debt. We have also heard of stories about seemingly ‘rich’ people who have 6-digit monthly earnings, nice, big houses and flashy cars yet are in a financial mess just like many of our poor kababayans. This just goes to show that anyone can be broke regardless of how much they earn.
On the bright side of this sad reality is an encouraging fact; that almost everyone has the ability to become truly wealthy or at least financially secure, even the ordinary, low-income employees. Unfortunately, only a few has the discipline and commitment to actually go for it. Majority of Filipinos have very poor spending habits and seem to have been programmed to spend & spend. They need to break out of this habit in order to start saving, which is the foundation for building wealth. Without any savings there’s no way that you can attain stability in your personal finances.
Filipinos are so used to living from payday to payday that they have become quite “skilled” at spending all the money that gets into their hands even if there is no compelling reason to do so. The huge billboards along EDSA, glossy & colorful print ads & the cool commercials with catchy tunes on TV and radio aggravate this culture of irresponsible spending in our society. One newspaper ad even elevated splurging to a divine act, declaring “to shop is human, to splurge divine!” It is no wonder then that people spend first before thinking about saving; a recipe that can lead to financial disaster. Almost always there’s too little or nothing is left to save after making all those payments and purchases; sometimes for things that people don’t really need.
There’s no magic formula for having enough money to save, only one simple solution: spend less than what you earn. In an environment that encourages spending this is easier said than done. Nowadays, it’s even possible to spend more than what you earn with that “plastic” inside your wallet. If you do not keep your expenses from going through the roof, not only will you have zero savings (which scuttles any chance of you getting rich), but you could soon find yourself in a debt hole that’s very difficult to escape. Fortunately, there are practical & “common sense” measures you can take to help you control your expenses and start living beneath your means.
First, take a long, hard look at your current lifestyle. Many people have a lifestyle that they really can’t afford. Many “rich looking” people have become a financial wreck because of their extravagant lifestyle. If you regularly find yourself unable to make ends meet or you’re sinking deeper and deeper into debt despite a big income, a change to a more modest lifestyle may be necessary. Often it will just take little changes to get you on the path to financial stability.
Second, know where your money goes. You can’t manage what you don’t know. Try to list down your expenses for the past 2 months. If you can’t accurately recall them you need to keep track of your daily expenses for the next month or two to give you a good idea on where your money is going. Every day record every expense you make including even the small items like candies, sticks of cigarettes and jeepney or bus fare. At the end of one or two months examine your list. You will probably be shocked to find out that you are spending way too much on things you can do without.
Third, cut down or eliminate unnecessary expenses and you will instantly have money available for savings. Smoking a pack of cigarettes a day may not seem to cost very much. But it would add up to about P1.2 million in 30 years if you would save & invest the money you get to keep by quitting smoking. Do you really need a daily dose of high-priced cappuccino? Cut in half your craving for it and you’ll be more than a million pesos richer 30 years into the future. There are many other things you can live without: alcohol, drugs, designer wear, excessive chatting & gaming at computer shops, too much texting, all forms of gambling, expensive hobbies, etc. Do your health and your pocket a big favor by getting rid of these.
Fourth, create a spending plan and stick to it. A spending plan (a.k.a. budget) helps you control and manage your personal finances. Set a budget for your expenses based on the list you made in steps 2 and 3 . But before anything else, set a budget for your monthly savings. Remember to always pay yourself first. Start with a manageable figure, say 5% of your income, and gradually increase it once you get the hang out of saving. Building wealth doesn’t mean you will have to eat instant noodles the rest of your life so set aside a little amount for leisure activities and for buying some “nice to haves.” A budget will be useless if you don’t stick to it. Make every effort to stay within your budget and do not overspend.
The road to financial stability and wealth is not an easy one. Learning to spend wisely will make your journey a little easier. Remember, almost everyone has the ability to become rich and the choices we make today will determine our financial health in the future. Make the right choice!
Practical steps to get out of debt
There are two main reasons why an individual or family goes into heavy debt. Overspending and the lack of a financial safety net.
Overspending
Spending more than what you earn is the most common reason why people get into a personal debt crisis. The most efficient tool to overspend is the credit card. Next to “5-6,” unpaid credit card debt is the worst kind of debt due to its high interest rates. Because of the relative ease of getting a credit card, millions of Pinoys own one or more credit cards. Today, there are close to 6 million credit cards issued in the Philippines. Sadly, more than 600,000 individuals are delinquent and unable to pay their credit card debts.
Misusing your credit card will quickly get you into serious debt trouble because it allows you to spend money you haven’t earned yet. When you don’t feel the “pain” of parting ways with your hard, cold cash you won’t think twice about buying things even if you don’t need them. For reckless spenders, the opportunity to achieve instant gratification minus the instant drain on one’s pocket makes credit cards so convenient and attractive… and deviously dangerous.
Lack of a financial safety net
Even if you are a wise spender you can still get into a debt hole if you are caught unprepared when a financial crisis strikes. Serious sickness, accidents, untimely death or business failure is likely to hit your family within your lifetime. Just one of these unfortunate events can easily get you into serious debt if you haven’t taken steps to protect your family against the financial impact.
If you are experiencing a debt crisis now, here’s the main strategy to get out of it - “spend less money than you make!” Well, it’s really more difficult than it sounds. But it’s the only way for you to escape the grip of the debt monster. Without any money available to pay down your debt you will be under its mercy till kingdom come. Below are proven steps you can take to help you dig out of a debt hole and nurse your way back to financial health.
Change your lifestyle. This is probably the best strategy you can use to get out and stay out of debt. Yes, it will take a lot of determination to change your spending habits. But you will have to get down to the root of the problem. If your expensive lifestyle led you to this crisis in the first place, changing to a more modest way of life will remove a major cause of your financial troubles.
Create a spending & debt-repayment plan & follow-it. A spending plan or budget allows you to allocate your funds accordingly and will let you monitor your spending closely. Be sure to include in your budget an amount for paying your debt and prioritizing payment for the most expensive loans. Do everything to stick to your spending and debt-repayment plan. Suspend paying yourself first if you’re still paying down debt. It doesn’t make sense to put aside money to a savings account that only pays 1-3% interest annually while you are paying 10%-40% in loan interest.
Cut-up the other credit cards. The more credit cards you have, the more tempting it will be to overspend. You only need one, at most two, credit cards. Choose the card(s) with the most favorable terms (lowest interest rates, penalties and annual fees). Transfer the balances of your other credit cards to the card(s) you will retain.
Avoid new borrowings while you are trying to bring down your debt to a more manageable level. While it’s okay to borrow low-interest money to pay for an existing high-interest loan a much better strategy is to cut down your expenses and use the money saved to pay your debt. Remember to borrow money only for buying “essential” things.
Pay in cash and you will be spending 30% less. Many card users mistakenly think that a credit card is a source of “additional” money which makes it easier for them to overspend. By paying cash all the time, or at least most of the time, you will keep your expenses down because you stop spending when there’s no more money to take out of your wallet. If you have to use your credit card, try to pay off the whole amount every month so you don’t pay interest charges.
Pay more than the minimum to reduce your credit card debt faster. The longer it takes you to repay, the more you will end-up paying. A credit card balance of P50,000 will take more than ten years to wipe out if you just pay the minimum every month; and you will have paid more than P85,000 in interest charges alone.
Pay on time to avoid costly penalty charges. It’s necessary for you to keep a written reminder of your payment due dates especially if you have multiple loans to pay. Put it in a place where you see it everyday and for good measure use your cellphone’s calendar & alarm functions for a timely reminder.
Get yourself insured. An unfortunate incident that will give a serious whack to your finances can happen anytime; it can happen tomorrow. So get your most important assets insured now; this includes you, your family and your properties. You will need life insurance, medical/hospitalization plan, car insurance and real property insurance. If you run a business get it insured. Make sure you don’t let the insurance agents dictate how much insurance you should get. Take an insurance plan that you can comfortably pay even if it means being under-insured. Under is better than nothing.
Use other sources to pay your debt. Look around for other sources of funds that will help you pay off your loans and other borrowings. Read the article ‘where to find money to pay your debt” for ideas on how to pay off your debt faster.
It cannot be overemphasized that the only way for you to get out of a debt hole is to live beneath your means. You don’t have to be a reckless spender or engage in spending binges to get into a debt crisis. Consistently spending even just a little more than what you earn will soon get you into trouble. Be very careful in using your credit card and taking out loans to buy things that are not necessary.
Where to find money to pay your debt.
The main source for money you can use to pay off your debt is your regular income. By reducing your monthly expenses you will free up money to pay down your loans. However, there’s not much money you can squeeze out of a limited income. Below are six other possible sources of money that can help you pay your debt faster.
1. Your savings & investments
If you have money in the bank, use it to pay your loans, especially the ones charging very high interest rates, like your credit card debt. Would you rather pay 3% monthly or 36% yearly in interest for your credit card dues so you can earn an almost insignificant interest of 1% per year from your bank account? That would be very foolish.
Consider this: You have P36,000 worth of credit card debt and P50,000 in a regular savings account that earns 1% yearly. Instead of using your money in the bank you choose to pay your debt through monthly installments for 1 year. So you end-up paying close to P6,000 in interest charges while your money in the bank grows by only P400 (after deducting withholding taxes). Be wise, make the more intelligent move.
As long as your savings or investments are earning way below the interest you’re paying for money you borrowed, use it. However, do not use all your money; leave some for your emergency fund. If you don’t and a financial emergency strikes, you will be forced to borrow again; balik din sa dati ang sitwasyon mo!
2. Borrowing against your insurance or pre-need plan
There are insurance and pre-need (pension & educational) plans which allow you to take out a loan against any cash value that the plan has accumulated. The interest rates for this kind of loans are considerably lower than the rates of other consumer loans. So if you have such a plan, go ahead and take out a loan. (If you’re not sure your plan has it, read the “fine print” again or ask your agent.) It’s perfectly alright to borrow “cheap” money to pay off expensive debt.
3. In-house salary loans
Some companies offer their employees salary loans with favorable terms (e.g. 5%-7% interest per year). You can’t get a loan from outside that will charge a lower interest rate. Find out if your company offers salary loans and check out the interest rates. If it’s considerably lower (at least 5% lower) apply for a loan. Just make sure you use it to pay for your high-interest debt; hindi sa bagong sapatos o damit.
4. Selling your belongings
Consider selling some of the things you own and use the money to break free from your debt. Look around the house and see if there are things you can do without. An expensive cellphone is a good candidate for disposal. Sell it (you won’t miss all those features & functions) and buy a cheaper one then use the extra cash to pay off your debt. You can try to pawning some of your jewelries or gadgets. However, pawnshops charge high interest rates (comparable to credit cards), so you might be better off selling them instead; unless they have a sentimental value. But then again you can’t be too sentimental if you are deep in debt.
5. Taking out a loan against your property
For huge debts you can apply for a loan with your real estate or car serving as the collateral. Although interest rates for this type of loans are also quite high, these are still much lower compared to credit card interest rates. As a rule of thumb take out a loan to pay off your debt only if the interest charged is lower than the interest you are currently paying. (But sometimes you will have no other option but to get a more expensive loan to pay off a long overdue debt & keep intact whatever is left of your integrity.)
6. Loan from family & friends
The best source of money for paying your debt is your family, close friends and relatives. If you are honest about your situation and they find you trustworthy, you might be able to borrow from them without having to pay any interest. It can’t get any better than this. However, don’t disappoint them and let them lose their trust in you by not paying them back. Don’t make a promise you can’t keep; hindi ka na makakaulit.
10 Ways to reduce expenses & save thousands monthly
It is not difficult to see that Filipino society encourages a culture of spending. Anywhere you look, especially in urban areas, you will find gigantic billboards that are so appealing to your senses you can’t wait to buy the item advertised. Prime spots in broadsheets, radio and TV are so full of advertisements that it makes it hard for people to resist spending even on items they don’t need.
While lack of money is one of the reasons why most Filipinos don’t have enough savings; it’s not the only one! Many individuals who are capable of saving are not able to do so because they overspend. It may sound impossible but you can actually find money to save with your current income (regardless of high or low it is) by simply changing your spending habits.
If you take the time to list down all your expenses over a couple of months you will be shocked to find out that you are spending on a lot of things that you don’t need or can live without. You will also be surprised to know that the little, cheap things you buy can easily add up to a substantial amount over time. You don’t have to look far to find money to save, you just have to reduce or eliminate unnecessary expenses. Below are ten expense busters that are guaranteed to free up hundreds or thousands in cash every month and boost your savings if you follow them consistently.
1. Be contented with what you have.
Stop comparing yourself and your family with other people. If you always try to keep up with your relatives, friends & neighbors you will soon find yourself buying things you really can’t afford. Envy can be a very costly emotion; it can lead you to financial disaster. Your worth as a person or as a family, is not measured by your material possession; so be satisfied with what you have.
2. Avoid all forms of gambling.
A compulsive gambler would sell the shirt on his back just to have money to gamble. He won’t hesitate giving up everything he has just to get the chance to win. So before you get hooked, stop gambling whether it’s legal or illegal. Many gamblers have lost not just their lifetime savings and home but also their families.
3. Quit smoking, drink moderately and don’t do drugs.
Smoking, drinking and drugs are not only bad for your health but they’re very bad for your wallet. The money you spend on these unhealthy habits will easily add up to hundreds of thousands or even over a million over a few decades (see table at the end of this article). Add to this, the amount you need for medication to treat its ill effects and you can just imagine how much money you’re wasting. Worse you can die from excessive smoking, drinking and doing drugs; and like gambling it can ruin the family.
4. Take public transport.
If you live in the outskirts of Metro Manila, like Cavite, Bulacan and Laguna, you can save several thousands every month just by opting to commute instead of driving your own car in going to work. With the high cost of fuel, traveling in a private vehicle is no longer practical. Taking public transport is still the most cost-effective way to move around; just don’t take a taxi all the time.
5. Bring lunch to work.
Food sold in canteens, fast foods and restaurants costs 100% to 300% more than home-cooked meals, so try to find time to prepare food to bring to work. You could be saving more than a thousand pesos a month by doing so and get to double your savings if you spouse will do the same. It certainly is well worth your time to cook your own lunch.
6. Cut coffee and soft drink consumption.
Addiction to caffeine can be very expensive especially if you are fond of those sold by high-end coffee shops. A daily dose of P100-a-cup coffee on your way to work will set you back at least P2,000 every month. It would be wise for heavy coffee drinkers to get their caffeine from cheaper alternatives. Soft drinks may not be as expensive but it will still add up to huge amounts over the years; and there’s also diabetes to worry about which is expensive to manage.
7. Do not buy on credit; use cash.
Studies have shown that paying in cash will cut down your spending by 25% to 30%. If you are the type who is easily persuaded to buy things on impulse it’s best that you leave your credit card at home; much more so if there’s a midnight sale. You can manage your expenses better by paying cash because you stop spending when no money is left. If you use your credit card, try to pay in full every month so you won’t have to pay interest… and still get the reward points.
8. Ease up on signature labels & avoid expensive activities.
End your love affair with signature labels because it is very costly. They cost many more times than a less known & less expensive brand. Sometimes the only difference is just the label; quality-wise they are the same. Signature clothing can score you “pogi” points but you will score more if you know how to carry yourself even with inexpensive clothing. Do not engage in expensive hobbies, fitness or leisure activities; instead do something as exciting but easier on the pocket. You will get the same health benefits by running around your subdivision instead of working the treadmill in an expensive gym.
9. Avoid excessive texting, internet chatting & PC gaming.
Its bad for your fingers, your hands, your back and your wallet and still many people are into it. They’re but a few of the bad effects of technology; its addiction in a high-tech world. Don’t allow yourself to become obsessed with these seemingly passive activities because it will definitely burn a hole in your pocket. Like many other types of addiction they’re not good for family relations.
10. Refrain from having extra-marital affairs.
People don’t openly talk about it but extra-marital affairs can be very expensive. The “other partner” is usually high maintenance and most of the times they are only in it for the money. Even with a good income, taking care of a family, even a small one, is already a formidable financial challenge. A costly addition is going to put a severe strain on your finances and it will be extremely difficult for you to save.
Following consistently the strategies above will help plug your “spending leaks” (expenses you can live without) and should drastically cut down your monthly expenses. Look at the table below and see how the money you save from cutting down on unnecessary expenses will grow over the years.
If you dream of retiring a multi-millionaire then make a conscious effort to reduce or eliminate unnecessary expenses. Such a smart move will let you add hundreds of thousands or millions to your nest egg in the next 20 to 30 years and the earlier you do this the bigger your savings will be. A 25-year old who will stick to the ten expense busters throughout his working life can look forward to a comfortable retirement with P10million or more in savings. Remember, the buying decisions you make today will greatly impact the level of your savings in the future; so spend your money wisely!
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