To buy or not to buy? 7 ways to stick to your holiday budget

MANILA - This is probably one of the hardest times in the year to keep to your budget.

Around this time, salaried employees have most likely received a windfall in the form of the 13th month pay, and if you’re luckier, a Christmas bonus, profit sharing, and other cash incentives—all of which make you feel cash-rich.

Happily coinciding with what seems to be your increased spending capacity are lots of sales and bazaars, running non-stop just about everywhere you look. On top of these is the general feeling of festivity and generosity that is just so pervasive, with people lugging gaily wrapped packages and parties ongoing non-stop. All these can make you forget about your budget and spending plans, and potentially set you back in meeting your financial goals.

Since temptations lurk just about everywhere, and not just during the Christmas season, it helps to be prepared to deal with these more responsibly.

Here are seven tips to help you deal with those temptations that can get in the way of your financial well-being.

1. Know thyself.

Knowing your weaknesses and trigger points is the most important step in fighting temptation. Some of us shop when we are emotional, tired, or angry at someone. Others react to advertisements or are easily swayed by sweet-talking salespersons. Many find themselves buying things they do not need, often mindlessly. Knowing what tempts you, and what makes you break your plans, will prepare you mentally to avoid these pitfalls and keep you from putting yourself in a spot that you cannot get out of easily.

2. Set a budget.

Having a budget will help you keep spending in track. Set a specific amount (either in peso terms or as a percentage of your income) for everything—for the household, for entertainment, for Christmas. Set aside an amount that is realistic for each one, based on your actual lifestyle and spending patterns. This will let you plan out expenses. When faced with temptation, you would know exactly how giving in to temptation would affect your budget for different areas.

3. Make checklists.

Complementing your budget, spending checklists are important. These lists should contain only the essentials and planned expenditures. Bring along these lists when you go shopping to ensure that you get only what you need. For Christmas, prepare a gift list to help organize your shopping and to keep you within your spending limits.

4. Stay away from malls and retail outlets.

Out of sight, out of mind works well when you are an insatiable shopper or find it very hard to resist buying once you hit stores. Many of us tend to go to malls to meet up with people or to dine out, and end up buying stuff because the in-store advertising and shopping bug are just too hard to resist. Meet your friends elsewhere such as someone’s home or a coffee shop in the neighborhood. Dine in areas which are not located in malls or retail strips. If a trip to the mall is unavoidable, then don’t loiter around—finish your business and get out without window shopping.

5. Leave your cards at home.

If you are an impulsive shopper, staying on cash mode is an effective way to resist temptation. When you do not have your credit card and ATM card to whip out, you will be left with only the money in your wallet to spend, forcing you to stay on budget. This is not to say that you should throw away your ATM card and credit card; on the contrary, they are very helpful financial tools when used wisely. Not carrying them around when you are feeling vulnerable, though, allows you to think twice about a purchase and stops impulse purchases.

6. Remind yourself of trade-offs.

When you’re about to fall into temptation, think of what it means to you in real terms. For instance, getting this glitzy smartphone means I will not be able to come up with the condominium down payment in six months. Framing your expense within your personal plans will help you determine if it is worth giving in to this temptation, or if you’re better off walking away.

7. Go for other activities.

Spending can be therapeutic and entertaining to many of us, but it is not meant to be so. Distract yourself by putting time into other activities—an afternoon chatting with friends, bonding with siblings and relatives at a park or someone’s house, reading good books at home. Even better yet, pay a visit to or volunteer to help out in a charitable institution (orphanages, centers and schools for the marginalized)—you’ll find these very fulfilling and will even let you touch the lives of other people.

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Grow Your Money is an editorial partnership between ABS-CBNnews.com and Citi Philippines to promote financial education and provide helpful information to Filipinos on how to better manage their personal finances.

Visit www.citibank.com.ph for more information.

source: www.abs-cbnnews.com

How David Pomeranz got out of credit card debt

MANILA – About 7 million credit card holders are still allergic to credit cards, according to Alex Ilagan, executive director of the Credit Card Association of the Philippines.

Ilagan said apart from prudence, experiences with bad debt have caused Filipinos to shy away from credit cards, thus slowing the industry’s growth at 5 percent per year.

American singer and songwriter David Pomeranz, who is frequently in the Philippines to hold concerts, said he had his share of bad credit card debt at one point in his life.

He said it took him months to pay his credit card debt while on tour.

How was he able to turn his spending habits around?

“Always make more money than you spend, that’s kind of it. Isn’t that silly? But it actually works like crazy,” Pomeranz told ANC’s “On The Money.”

“If I make more money than I spend, I do very well, and when I make more money than I spend, I can invest in my own career, my family, and expanding my business,” he added.

Pomeranz said keeping track of finances may require an accountant is who ethical, organized, knowledgeable of laws and regulations, and trustworthy.

He noted that the most important thing is knowing your bottomline, and being conscious of how goals will contribute to more success.

“I always recommend that the money is in sight, that it’s been earned. When I’m spending the money that I do have, it should contribute to the betterment of the organization, that it will further my goals, and further my dreams,” he said.

source: www.abs-cbnnews.com

Four Real Folks Who Overcame Their Debt

If you’re one of the millions of people engrossed in debt, it may seem like financial freedom is a distant dream.  The number of individuals living with debt in the UK has grown exponentially. In part, this is because of rising living expenses and unchanging wages. Based on a recent study, one in three Britons is in debt. That equates to £1.424 trillion in outstanding personal debt, this year alone. Although these statistics may sound menacing, it is possible to reduce and even eliminate your debt.  To prove that it’s possible, here are four average people who won their fight with debt.

Carrie Smith

Carrie Smith’s financial wake-up call occurred the instant she acknowledged her situation. At 28, she found herself with a staggering £9,300 in credit card debt. Eager to regain control of her finances and financial future, she managed to pay it all off in a year through hard work and strict budgeting. Carrie’s approach was to start with the cards which carried the highest interest rates. Most people immediately tackle the cards with the highest balance, but it’s wiser to evaluate the interest rate fees on a monthly and annual basis because that’s where you’ll be hit the hardest. To stay on track Carrie even made a timeline of her progress using a payment tool. And of course, she had to cut her frivolous spending– holidays, salon visits, cable, and dining out. The spending cuts were temporary, but the results enduring long past that year, Carrie points out.

Shari Gordon

Armed with a Master’s degree and a mountain of student loans to accompany it, Shari was unsure how she would repay the £20,000 she owed. She admits that at first she was in debt denial. When bills arrived, she barely paid the minimums. She soon realised that this approach was making no real headway so she broke down the balances into more manageable amounts and created a strict budget. In time, she was promoted at work and started looking for side jobs to make some extra money. It wasn’t easy, but Shari paid off her debt and now advises others on how to do the same.

Grayson Bell

Grayson Bell had dreams of owning his own business with his wife Jane. To bring his dreams to fruition, Grayson financed £33,000 with four different credit cards. When the economy took a turn for the worse, Grayson’s business unfortunately went under, leaving him with no substantial cash flow. As the debts piled up, Grayson continued to spend in hopes that the business would eventually recover. Two years later, his finances were still in ruin so he made the conscious decision to seek help. Grayson opted for debt consolidation as a way to fast track his financial recovery.  Consolidated Credit provided him with the tools necessary to create a budget, lower his balances, and pay off his cards. Today he’s proud to be debt free and on the road to building a new business.

Kate Flanders

Maxed out and looking for a way out, Kate was in over her head by age 25. With very little in her bank account and bills pouring in month after month she did what most people dread—moved back in with her parents.  Within a matter of month, she eliminated all the shopping trips, weekend getaways, and drinks with friends. After 6 months, she saved enough money to pay off her cards in full. Kate’s advice to people suffering from debt is to ask for help sooner rather than later.

Whether you have to create a budget, cut your spending habits, or seek debt consolidation it’s important to get a handle on your debt. It won’t resolve itself so it’s your responsibility to do your part in management and elimination.

source: everythingfinanceblog.com