6 comments on “Nth Attempt at Budgeting

  1. When paying debts remember to pay the highest interest first, then when that’s done you can snowball the payments that used to go to that high interest debt to the other debts (don’t reduce the debt payments).

    Also, have you really looked at your spending and make cuts where needed. You said you lived near to your office. Do you really need a car? Somewhere else in your blog you said you are trying to quit smoking. Have you calculated how much you would save if you don’t smoke? You can use the money saved for the summer trips…

  2. Hey, thanks, you’re being really helpful πŸ™‚

    Well, all my cards have the same interest rate – 3.5%. The only way I can reduce interest is to transfer them on to a new card. Card companies here offer as low as 1% interest per month on balance transfers to lure new customers. I did that last year with one card, and I managed to zero it out, but I just racked up new debt on the new card. Hehe πŸ˜› But it’s worth another try. I suppose, I’ll just have to cut up the new card too.

    Commuting is a pain in Metro Manila. It would cost me take me an hour of hot, congested train rides, as opposed to 20 minutes of driving, to get to work. My transpo costs per day, if I just go to work then back home, are about P120, compared to P44 if I take the train. I’m not sure it’s a worthwhile cost-saving measure. Besides, I can’t really sell my car even if I don’t use it because my family borrows it sometimes, so I’ll still have car maintenance costs.

    And yes, I did in fact compute how much I would save if I quit smoking. It’s about P7500 a year, enough for a summer trip. But I’ve been trying to quit smoking longer than I’ve been trying to get out of debt, so I don’t know how successful I’ll be in that area. πŸ˜›

    I can cut down a bit, I think, on cellphone expenses, electricity by using the airconditioning less, and stuff. But what really hits my pocket hard are the huge, unplanned expenses. Last year, my laptop got stolen so I had to buy a new one. This year, my sister’s PC broke down, so I had to buy her a new one. A few months ago, my cellphone encountered a swimming accident so I had to get a new one too. It’s these kind of incidents that I have to be financially prepared for, otherwise, whatever painstaking gains I make in reducing my debt immediately go up in smoke.

  3. Balance transfer are good, but yes you need refrain from spending on the new card.

    On commuting, as long as you’re aware of the cost-benefit.

    On smoking, here in the UK the government have free programs and support. Maybe something like that available in Manila? From what I know (secondhand, as I am not a smoker), you really can’t do it alone.

    For the huge unplanned expense, then you need to do “self-insurance”, which I think you classified as emergency funds. But in essence saving up each month like an insurance premium for “disasters”.

    One other tip for cutting spending: if you want to buy something, use delaying tactics. Tell yourself, I’ll buy it in two days, next week or whatever. Chances are the “need” (which is sometimes a “want” in disguise) will have faded.

    And if you already cut spending way down, you can think of increasing income, which is harder of course.

  4. Excellent, recognizing the problem is always the first step!

    Here’s a checklist for you:

    Before buying an item, ask yourself:

    * Can I do without it?

    * Can I postpone its purchase?

    * Can I substitute something else that costs less?

    * Can I use my own skills to make it myself?

    * Do I already own one?

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