Down the Rabbit Hole

I’m too deep.

Way deeper than I had anticipated.

This month I’ve maxed out my two credit cards. This is on top of an existing loan that I took to manage my credit card debt. Now I’m paying for both. This means that I’m deep in debt. Again. Something that I vowed not to do.

It hurts thinking that this time last year I was still dept free. All it takes was one year and a series of unmanaged expenses. Unnecessary that is.

Now I have to plan how to get out of this mess I’ve made for myself.

It hurts to think that I had to take some money out of my investment account just to stop bleeding from these debts. This account is set aside for my retirement few decades from now.

This is yet another lesson learned the hard way.

I guess that has been what worked for me for a while now. This has to be last of these lesson. I have to learn without getting myself deep in a mess.

I feel bad but at the same time I’m humbled by this experience. I’m still far from financial freedom and I am now seeing some pitfalls that might delay my journey.

With this lesson in hand I will be more equipped in pushing through my journey to personal financial freedom.

Now it’s time to crawl my way out of this hole.

I will see you on the other side.

Going beyond paycheck to paycheck

Okay you have a decent paying job. You don’t have debt but you just have enough to pay the bills.

If you encounter an emergency you will have to borrow the money. If your car needs sudden repair you’ll have to borrow the money. Anything outside of your routine expenses you’ll have to borrow money. You have the car, the clothes, the job and the looks of someone who is rich. The only problem is you don’t feel like it.

You are stuck in your job because you have to. It’s not something you hate it’s just not the dream job you imagined. Add to that you feel like your life has been more about paying the bills rather than actually living.

If the above description fits you then congratulations you are not alone. You are one with many people living paycheck to paycheck. Money matters is a serious business. Vacation is a dream and life has become this repetitive pattern. Workworkwork. Spendspendspend. Workworkwork. Spendspendspend. Rinse. Repeat.

Aren’t you getting tired of thinking about the bills you have to pay? You should because it is not the way to live a life.

I know from experience how stressful it is thinking about money especially if you have a scarcity on that matter. Life should not revolveon earning and spending. I know that you know there is more to life than just working and paying the bills.

We all want a good life until we see how hard it is to achieve.

If you are like me a few years back I would have said the good life is just a dream. Something to look forward to and maybe experience from time to time but not really a way of life. That has been my mentality for a long time. That is until I got tired of it and started to key in some text on Google and was surprised by the answers that I have found.

There exists so many ways to live a better life and all have something in common.

Managing your money.

That might mean a lot of things to different people but for me it’s simple. You just have to know what matters most in your life.

How do you go beyond paycheck to paycheck?

It can be done in the following steps:

1. Know where your money goes. Track your spending to the last cent for at least two months.

2. Start saving and do it consistently.

3. Spend only on what really matters to you.

4. Increase your value.

5. Increase your income.

6. As you do step 5 you increase your savings and keep your spending the same in step 3. Bigger income results to bigger SAVINGS and smaller spending.

7. Learn how to make your money pay for your needs. (Bills and all)
8. No you don’t have to wait this far to live a good life. As you go along the steps begin living the good life.

I’ll expand more on the steps I’ve listed in the meantime why don’t you try doing steps 1-3 I’m sure you will see a difference in how much better your life would be.

This is where your money goes

Due to sudden change in work schedule I had to bring my son to my parents house in my hometown. Being away for a long time gave me some perspective on what is happening back there.

One thing that stand up to me is the amount of waste there. I’m not talking about garbage kind of waste but rather a waste of money among other things.

I’ve noticed how my mom, dad and even brother have a huge number of clothes. I remember my mom always liked shopping. Although most of the clothes she bought are from a thrift shop still she got more clothes than she could wear. Same goes for my brother who is fond of buying clothes from familiar often expensive brands. All these expensive purchases while working at minimum wage.

Aside from clothing I also noticed a lot of kitchen items that are rarely used. Plates, glasses, cups, bowls, saucers and other plastic containers got piled up in the kitchen. These stuff are used if ever at some point in the year at some occasions held in the house. Most of the time they just collect dust and fill the kitchen cabinet without regular use.

Aside from the rarely used items I also noticed that almost everyday we throw away spoiled food. Rice, chicken, pork, fish even fruits and vegetables get thrown out on a regular basis. I feel sad noticing it now. I can recall growing up that it has always been like this. So many stuff bought but not really used. Such a waste makes me think we could have saved the money used to buy those stuff.

The saddest part is that I in some way guilty of being wasteful in my own way. Although I have fewer clothes than my mom I still got more than what I needed. I also have a lot of clothes amongst other stuff that I no longer use but I kept in a box of old stuff. I could have cleaned it out and give away the stuff that I no longer used or just seldom use.

As I learned not that long ago that having fewer items on the house also provide fewer things to think about. Keeping it minimal helps clear the clutter both physically and mentally. Clearing every non essential items on the house provides a clearer picture of what I currently have and what I want to have in the near future.

Doing this not only free the physical and mental space in the house but also will prevent any wastage in the future.

Going beyond regret

I’m currently reading Rising: Strategies for the broke, the At-risk, an those who love them and ome thing that stuck is the chapter about regrets. Sure we’ve made some decisions that we regret. We had reasons for coming up to such decision and somehow failed to achieve what we hope to achieve hence the regret.

As stated in the book, regret is a tough feeling to face. Most often times it’s carrying other negative feelings such as shame, guilt or fear. That is why it is important for us to learn how to tolerate regrets and go beyond it. Like grieving, regrets often give us feelings of loss. Lost opportunities, time, money, work, relationship among others. Most of the time we tend to give in to the feeling of loss and regret that our immediate action is to give up.

That is the easiest way. To give in and give up. It is also the least profitable. Doing so will put us in a position of not taking any more chances on other opportunities. In business there is what you call cutting your losses, which means if your business is lossing much it’s high time for you to quit it and not wait for further loss. It’s the same principle with added emphasis on cutting your loss so that whatever you have left can still be invested on other opportunities that can make you win.

I’m sure you will agree that you don’t want regret on anything in life and I’m with you on that regard. Unfortunately that doesn’t happen in real life. At some point we may make something that we will regret and we can be affected by it. What we can hope to achieve is to acknowledge that these things can happen an be prepared for it. At any time we be ready to cut our losses and focus more on the next wave of opportunities that will come our way.

We tried, we failed then we move on. We move forward bringing with us the lessons from that failure and venture to a new one equipped with a knowledge we previously never had. Regrets may come our way but we’ll keep trying. In each iteration we become better and better.

Money can’t buy you happiness

Most people would agree that money can’t buy happiness. There’s no such thing as a happy store which sells happiness by the dozen. If there is such a store I will be lining up and spending whatever extra money I can get my hands on. Although this is the case we still need money to do basically anything in life. Food, shelter, transportation, travel, books, gadgets and a whole lot more. This means that money has a lot of potential that we can tap into and utilize. If handled properly, money can give us tremendous power to achieve many things including happiness.

One thing we have to note though is that money is a limited resource. We don’t have infinite amounts of money regardless of how wealthy we might think we are. A dollar spent is a dollar gone. A million spent is a million gone. Regardless of the quantity of the money we have, once it’s spent, it’s gone forever unless of course if we spent it on something that can earn us more money. That is why it is very important for us to understand how we make our money stay and grow with us.

This is the reason why it is very important for us to learn how to invest our money. All tools needed for us to be educated about investment is available to us and it is now up to us to learn how to make us of it. There are countless books, articles, websites even apps about investing have been created for us. It is high time for us to really take advantage of these wisdom imparted to us and learn how to invest and grow our money.

Money is not evil. It is a tool to achieve what we want in life. If we want to have mountains of money to do things that make us happy then by all means go earn those dollars. Only you can decide on what makes you happy and more often than not you will require some money to make it happen.

 

 

 

It’s pay day and I’m on red

Everyone is excited as people statd to queue on the atm machine near the entrance of the building. We can now collect the fruit of our labor. Time and talent traded for money on the 15th and 30th of the month. I should be happy, everyone should but I’m not and so are many of my colleagues.

Looking at the amount on the balance will tell me that the numbers represents a large amount of money. If I’m right this is almost triple of what I was getting five years ago. I should be happy. I should be able to buy what I want and not worry about going red at the end of the month. I did although I didn’t have to and that’s where the problem started.

My income increased and together with it my expenses increased as well. In the end I was not able to save with the increase of my salary. I just spent more and most of these expenses are not really needed.

Everyone can agree that we don’t want to be on red when it comes to our finances. We want to have more money coming in than money coming out. Regardless of our income level it will always boil down to how much we spend. Control your spending and it will be easier to stay green on your finances.

If you are already in red these are some guidelines you can follow:

1. You can only spend on the necessities. You have no right to spend on anything that is not a need. When I say need it means something essential for human survival. Along the lines of food, shelter, transportation and the likes.

2. Treat debt as an emergency because it is. After optimization of you spending start paying debt. Anything extra goes to paying your debt one by one. Start with the smallest debt and move your way up until you’ve paid it all.

3. Saving is your starting point. After debt has been eliminated start saving. Save aggressively and make it a priority. This means that savings has to be the first item on your budget . Better yet you save first before budgeting the remaining money for expenses.

4. Create an emergency fund of at least six months worth equivalent to your spending. This should be your first investment item. This will ensure that you don’t go in red even if you encounter unforseen and unfortunate events.

5. Let your money grow. Put your money in various investments that can make your money work for you and bring on more income streams.

6. Continue saving.

To summarize, we start off with prevention. If you can’t prevent it at least don’t make it worse. If you can manage that prevent it from happening again by saving. Lastly, make your money grow.

Easy enough? Give it a go!