On the promises in Arroyo’s SONA

MoneySmart made a quick list of GMA’s promises for the economy in her recently concluded SONA. One item quickly caught my eye: stronger and wider social safety nets.

In my work for ADB, I have learned that one of the major obstacles to poverty reduction efforts is the vulnerability of the poor to socio-economic shocks.  An illness, a layoff, a death in the family, a natural disaster… all these unexpected occurrences can make a middle income family suddenly part of the poor majority.

Depressing News (At least for me)

“The peso closed at P45 today. My sympathies.”

After a day of fighting with credit cards over excessive penalties, processing balance transfers, and basically trying to gain control over my finances, this text message from a business journalist friend was just about the last thing I needed.

For the past couple of months, I have been budgeting conservatively using a P45=$1 exchange rat, even though the real exchange hovered just below P46=$1. I thought that would give me some buffer. Apparently, I wasn’t conservative enough.

I know this Peso appreciation is good for a lot of reasons, but then again, the fact remains that my income is decreasing while prices are not. They’re even going up. Our rent has just been increased. Electricity has gone up by at least 20% too following some new pricing scheme. Gas is still expensive.

How in the world am I going to become a bajillionaire (or just pay off my debts and save a decent amount of money to begin with) with all this?

Two cell phones and lower phone bills

I consider cell phone bills as “painful” bills I have to suffer. Yes, I know we can’t live without them now, but over the past four or five years, I have paid Globe Telecom an average of P2,200 each month. On bad months, I even spend more than P3,000 on calls. That’s about P25,000 each year!

But thanks to the wonders of market forces and competition, I somehow managed to get a free second cellphone while drastically reducing my cell phone bills.

Small Victories

Last month…

1. I was able to almost perfectly stick to my budget (just overspent on a few unexpected expenses). This meant:

• Not shopping for anything that is not essential (no new clothes, bags, shoes, accessories, etc)
• Staying away from enticing sales (Rockwell’s sale was a pretty hard struggle). The only time I failed was when Philips had their annual warehouse sale – where I got a component for less than half the price. A pretty good buy, right?
• Staying home more often
• Cheaper night outs (We would have dinner at home or in some cheap place first before meeting up with friends)

2. I only used my credit card once only (a P500 gasoline charge). Woohooo!

3. I did a whole lot of extra work to earn money solely for debt repayment (following #10 in Thriftmommy’s 20 ways to pay off debt)

Because of all these, once all my checks clear this coming week, I’ll be able to pay off two of my credit cards!!! Yipee! =D They’re the two with the lower amounts of debt, but paying them off will put my total debt down to just 5 figures.

Woot! Now, if I can just do this for two more months, I’ll be debt-free and investing soon!

What? A financial psychologist?

Yup, you read right. Not a financial adviser or planner, but a psychologist. Not one who looks at your assets and debts, budgets and portfolio, but one who looks at why you manage money the way you do.

My boyfriend’s cousin mentioned this to me recently, after I told her of my financial woes. She has a right to lecture me – she earns less than I do, but she’s debt free and she’s currently paying for her very own condominium unit =P

Anyway, she says she can recommend a financial psychologist who will look at, say, why I have a tendency to spend as much as I do on certain things, or why I find it hard to say no to certain expenses.  Hmm… sounds interesting. Since I’ve basically pinpointed the root of my financial woes to lack of self-discipline, this sounds like it can actually work.

I did some Internet research, and apparently, financial psychology is an emerging field. One website said that “experts believe that an individual’s beliefs about money are formed between the ages of 5 and 12″. For those who are out of debt and are looking into investment options, financial psychology can also show they why behind investment decisions.

Hmm, interesting…  Have any of you guys heard of this? Or know someone who practices this? Or have actually consulted with one?