Financial Literacy: Emergency Fund

One of my goals this year was to build our emergency fund. Nice! But I failed to make it clear on HOW I’ll achieve it. So I revised my financial goals and managed our money even more. I am still new with this so there were times that Budgeting our Money was a little challenging. I never budget my salary ever since so this was a step ahead, I think. Anyhow, as I have a clearer goals this time (started June 2016 only), I am looking after the day that I would say, “Finally! Goal’s achieved”. I only have 4 months left before the end of the year and I am still on track. Yey! Although when I think about the start of year 2016, I hope I made this choice sooner than later but then, it’s never too late to start. =)

The first step in achieving financial freedom is to make sure that you have enough emergency fund to cover your expenses or immediate medical attention for any members of the family. In my case, I have Daryl and Jami to look out to. Aside from that, we have only one income source so I have to make sure we have money kept to cover us when the bread winner got sick and can’t go to work. 

What is an Emergency Fund?

From the word itself, it's the fund that you'll use in cases of Emergency - Health Emergency, Calamities, Sudden loss of Job etc. It is also suggested that you'll have 3-6 months’ worth of your expenses to make sure that you are able to sustain your immediate needs until you're back on your feet. Three to Six months is enough to recover from these emergencies without dipping into debts. However, I was thinking that saving Php20, 000 is really hard given all the expenses that are lining up, what more with Php50, 000 or even Php100, 000 for the suggested amount of your Emergency fund?

photo source: google

After a friend of mine discussed how she's going to save Php100, 000 until the end of the year, I got so inspired with her thinking and how frugal she was. So I made my own calculations and analyze our current state until I realized that yes! I could make it too.

So how did I plan to build the fund?

To start off, I want to have at least 3 months’ worth of fund since I will be too late to complete it to six months until the end of the year. According to my evaluation, I should have Php48, 000 to achieve my target of 3 months. Wow! I felt overwhelmed. I didn't know that our expenses are this big in couple of months’ time but it didn't stop me from looking for possible ways to achieve my goal. I have later on decided to make it Php50, 000 to close down the amount.

The question is how are we able to achieve the goal with a one income household?

Savings 

I honestly don't know how much money I was saving. I re-organized my income and found that I am putting 10.55% of my monthly salary in coop only to get the money saved and spend later in the year. I am using it for short goals like travel fund, or uses it for shopping for clothes, shoes etc. I also deposit 0.59% to Jami's savings account which I originally planned to be our Emergency fund however, it will take 36 months to achieve the Php50k goal so I have to revise it and come up with a realistic plan. With all these money, I have decided to put 20% of my monthly take home to savings. I still placed all of them in coop so it could earn a higher dividend compared to ATM accounts. As of this writing, the dividend that my shares earned is almost Php200/share in just 2 months! I am so happy with the result. That was just for one cooperative that I joined. The other one earned a smaller dividend because it was just starting although it earned close to Php200 in 4 months. Having these only completes 45.6% of my total money goal without the dividend the shares will earn at the end of the year.

Incentives 

I was really lucky that came 2015, our office started to give out incentives to its employees on our region. I am getting approximately 28% of my monthly salary every quarter and it is fully dedicated in building our emergency fund. I can't spend any more money without making sure that the fund is complete. The amount I’ll place will be 20% of my total goal.

Jami’s Passbook 

Instead of a Php500 deposit that I originally thought of, I decided to place half of the amount to cooperative to earn instead of making this small money sleep in the bank. Php300 is being placed as an additional share then Php200 will remain kept until it’s huge enough to be placed in the bank. The Php200 being kept will accumulate to Php2, 300 until December which will be the 4.6% of the goal. At this time, I have a single digit amount placed into the account which was the 13.4% of the goal. Back in June, I owe an amount to Jami’s passbook which I am looking forward to return and be added on our fund. It has a spot on the budget I created for the year so by December 2016, I’ll be able to return the money back that will make the 5%. Totally, Jami’s passbook will contribute 23%.

Adding them all up will make 88.6% of my goal meaning, I am short of 11.4% that I am still looking forward to complete by the end of the year. What I want was to complete the fund without touching my 13^th month pay as it will be allocated to holidays and another goal. I am positive that I will be able to create another source of income to complete all these in a matter of 4 months. =) As of this writing, I am at 35.97% out of 100% of my goal in just 2 months! Yey.. I am happy and I am not losing my focus! While thinking about the shortage, I am trying to improve on these two below;

Additional Income

One of the best decision I made this year was to buy an electric oven. I am now using it for additional income although I was looking for an upgrade since the orders could be a little more overwhelming for the size of my unit. Whenever possible, I put the profit back to my capital. I can't guarantee a huge amount of profit to be placed thru to our fund yet since I have a very small capital and I am looking forward to grow it even more. Once I reach a target goal for our capital, I’ll have earnings/profits to our savings or leisure.
 
Budget

Sticking to the budget is really important although I had trouble last month because it was our 10th year anniversary. I failed to allocate a budget for it simply because we have other more important things to do. I was just really glad that an opportunity knocked and Daryl had the chance to earn a day before and that was the money we used to celebrate. We even made sure that we won't go overboard our budget. We went to Manila Zoo and ate in a fast food to complete the night.

I don't want to say na perfect na ako financially, all of these are just based on my own experience and the situation that we are in as a family. I also just have a mindset and a goal that I want to achieve. There are times that I still wish to go shopping, buy new clothes, shoes, phones or camera but then, I realize we don't even have money to survive if I suddenly lose my job, why would I need a new dress or shoes? Now my goal was to continue everything until the end of the year. When 2017 starts, I could say I am even closer to my dream. =)

10 Years of Being Together and I Feel The Same Love

It has been 10 years since I met Daryl and it felt so good to realize that all those times weren't mostly what we planned but still we made it this far.

Our Dalaga and Binata Days

It was in 2006 when we first met. Uso pa dati ang mga text mates when phone companies released their unlimited texts promos. Naabutan ko pa non yung Php25 unlimited texts for 2 days. Sulit na sulit grabe so most of my classmates and friends would have text clan. This was where I met Daryl. I just had a second handed phone from Kuya and a globe prepaid sim. Originally, ayaw ko ng Globe because almost all of my classmates used Smart Sim. A childhood friend introduced me to her clan that she's a member of and asked me to join too. I later on realized na ang daming nag tetext sa akin na anonymous numbers 'welcoming' me to their clan. Since I was so new to these, I deleted all text messages where in fact I have to reply and say Hi to everybody (Group Message). I asked my childhood friend to send me the phone numbers of the members so I could send a text to them. While scanning through, I saw one named 'Earl". Natuwa talaga ako sa name because for me, it sounded cute. Right after that was Daryl's name and number. I texted all of them with a 'Hi,' including Daryl's number.

I had then some 'text mates' after. Some of them were from provinces of Cavite, Nueva Ecija etc. Yung tipong ang lalayo talaga ng location. It tooked 3 days before Daryl replied to me with a "Hi, Nasl please." meaning Name, Age, Sex, Location which was a normal question back then. Of course I replied to him and that's the start our journey. =) Thinking about it, we didn't expect things to be this long. Meeting each other on texts messages felt that it wasn't something serious but it was technically.

Although I can't say that the journey we had was a smooth sailing, we tried our best to be strong. I remembered having an agreement that no one should ask for a break up when our fight is uncontrollable. "Break na tayo" is something that we decided not to use at all when things don't go our way.

I am so proud with what we have become. Yes, we are not married yet and hoping we could accomplish this soon. Alam ko naman that he wants our marriage to be funded by him and not anyone else, and that's what I want too. I am praying that God will bless us more so we could be as one soon. =)

To Babe:

I love you babe and I am sorry for being so stubborn, the tendency to nag you every day and the super Mommy that's me. I know you understand and that we are two strong people playing the man in the house alternately. I can't thank God enough for you and Jami. You are both one of the best people that I have met. I am always praying for your success and your future. I will always be right here supporting and helping you the best way I can. Again, Happy Anniversary and may God bless us with more healthy years together.

How I Budget our Money

When 2016 started, I was looking forward to be able to save more. I was planning to build our emergency fund so I could tick that off of our goals and proceed to the next priority. I haven't been this organize in my entire life in terms of finances and I never ever budget my salary back then. I spend my salary and would come up to the last thousand more than a week before my next salary. I lived paycheck to paycheck and would even come up short two days before the next salary. I have been a good spender really and that's one of the things that I regret. I started working in 2008 and never had the chance to save even a thousand. Could you imagine that?

Anyway, last month as I turned 26, I realized a lot of things in terms of finances. I have been reading financial books since last year and wasn't able to apply it in reality. I almost give up until I realized the culprit on why I wasn't able to save - I failed to budget our money. I was wondering why I can't build our fund faster (my plan was to put Php1000 per month only!). Anyhow, after kong matauhan, I was so inspired in building the fund and even having a target up until the end of the year to complete at least 3 months worth (ideally 6 months worth of salary). Since hindi ko na mahahabol pa to the end of this year the ideal amount, I would take just the half for a starter.

So how do I budget our money?

source

I am using the technique that I read in one of the books that I bought. It was the Kaya mo Pinoy! 12 Steps to Build Wealth on Any Income by Alvin Tabañag. He has shown a very simple way in budgeting an income which works for me so far. I have been using it for almost 2 months and the outcome is so far positive. Believe me, I bought and read the book last year but it was just now that I used it to my advantage. Now here's how I do it.

Budget should be divided into sections that is important to you and your family.

Section I. Active Income

According to the book, this is where I'll put my Salary. Any money that I received that requires my effort will be placed in here. I also include here the amount that I earn from baking. Passive Income should also have it's own section but since I don't have one, I skipped that part.

Section II. Savings 

I always remember the saying Income - Savings = Expenses and this is what I am doing at the moment. Before I proceed with the bills, I have savings to deduct from my salary to make sure that I get it to safety before digging into other things. At the moment, I am saving 20% of my salary which I am quite happy. In September, I am increasing it to 25% to achieve the goal I have set for Emergency Fund. By next year, I hope I could increase it to 30% and so on to achieve my goals sooner.

Section III. House Expenses

This is where our monthly rent goes along with electricity and water bill plus our drinking water. Our drinking water was the same water we use to make Jami's milk so I really have to allot some amount for it.

Section IV. Consumer Loan

One of the next important thing for me was to pay off my loans and money owe from friends and relatives. I listed down all of them and paid them one by one in order where I could delay some of them like those from a friend that I asked to pay a little later or made it installment so I could pay more than one every 2 weeks. I started this technique on 3rd week of June and looking forward to complete all of them by September. One of the things that I learned from financial books was to pay your debt so you could sleep comfortably at night and free up the money you're using to pay for savings eventually. Having a budget allows me to figure out how much money I have to allocate in paying our debts. I am so happy to see the amount going down as the weeks go by. I also keep track of them to make sure that I won't left something behind.

Section V. Other General Expenses

I have my last section tagged as General Expenses but it is divisible by a lot of other things. I kept them in a single section since these are the things that I could cut down on in case our budget is tight. I am just so happy that at some point or two there were unexpected money that Daryl could shell out too to cover for some necessities.

Groceries - I only buy those that we need the most and can be used for the next 2 weeks. I buy my detergent and fabric conditioner etc. in the mall and get fresh produce in the local supermarket. I prefer to buy them on the same day that I'll cook them rather than buying them ahead of time. I also bring pack lunch in the office so I won't have to spend more.

Transportation - I am lucky that Daryl's Mom shoulders the cost of gas for their car so I can get to work. I only have to spend Php7 for jeepney from Pasay to Magallanes. I also allot money for our tollgate.

Work Allowance - This is for some money I use in buying snacks in the office.

Entertainment - Last month until August, I placed our entertainment budget on hold to give way in paying some debts. Our entertainment fund goes to our dining out, movies, going out, travel etc. I am looking forward to get them back up in August for some fun time. :)

Unexpected Expenses - More often than not, there were times that an unexpected expense comes up so I make sure to protect the budget by allocating some amount into it as well.

Babe's Budget - I am allocating a budget for Daryl that he could use in looking for a job. Since we're having trouble with time management (he's in charge of baby sitting), he can't spend his whole day of weekdays applying for a job because I go to work and no one else would look after Jami. 

I am using an excel sheet to keep track of my budget and print it out during paydays so I could tick off those that are paid. From time to time, I am updating the budget according to our situation but I always make sure that I follow these sections accordingly. I have yet to learn so many things about budgeting and one of them was the shortage I had two weeks ago. My budget says I was short of this amount. Instead of me adjusting the budget to make it zero or positive, I kept it on negative thinking that I'll be able to create another cash flow to cover it. But I didn't so I struggle on that for a bit. Moving forward, I make sure that if the budget says negative, I have to make sure that I'll adjust those that are listed down to make it Zero or even positive or we have to work double time to increase our cash flow.

I hope that this will be beneficial for you too as it was to me. I am keeping this until forever as it's very important to budget the money that we worked hard for. =)

Our Boracay Trip 2016

Our short stay in Boracay was all about rest. Lol! Since we arrived around 4pm in our Hotel, our main goal was to take a good rest (physically, mentally, emotionally etc) since we all have a very short sleep the night before. 

I would have to consider that Jami felt so tired as well so I opted to stay in our hotel for almost half of our time there. I will blog about Royal Park Beach Resort in a separate post for sure. 

We arrived late in the afternoon on our first day since our flight was behind the schedule for one hour. Our transfer was great (except for the van) so I got no problem with that. I made an itinerary for the entire duration of our stay but failed to follow it through since it was scorching hot and that Jami wasn’t really fond of beaches and the sand. Since our hotel is situated in Station 1, we have to walk our way going to Station 2 for 5-10 minutes to look for a restaurant for our lunch or dinner. 

Although we had the chance to try the hotel’s menu, I wasn’t really happy with their Sinigang kasi hindi malambot yung meat. Yun pa naman ang pinaka ayaw ko sa lahat. Lol!

We ate in several restaurants in Station 2 although I forgot their names! I think one of them was in Hapag? We also tried one near D’ Mall pero nakalimutan ko talaga ang name ng resto. Lol! So next time, I would really have to blog about them at least 1 week after no?! Hehehe. It’s just now that I had the time to do so. Anyhow, what I can tell is, ang mahal talaga ng food in Boracay. For two person with a minimum of 1 main course with 3 cup of rice, you’ll spend Php500-700 for it. So expensive! Well yes, I always try my best to cook food at home so alam ko kung magkano ang prices ng ingredients sa palengke. Hahahah! Well, I would have to accept that traveling costs money so you really have to make sure meron kang enough on your pocket. With that, we won’t travel for the next couple of months. Probably next year na lang ulit if our finances allowed :D

Anyway, our stay was filled with happiness in dipping into the sea specially in the early morning and the late afternoon to avoid the dangerous heat of the sun. 

Jami loved the sea later on since the waves weren’t that strong compared to previous beaches we’ve been too. We stayed indoors and enjoyed each other’s company. 

I am so glad that we had this chance to at least relax and have a family bonding. I am looking forward to more of these (in a year’s time). I am really glad that our experience wasn’t as stressful as I thought. With a toddler in tow, Boracay is definitely a place to be. 

 You know, I realized that we don't have so may pictures when we were there. Honestly, sobrang lazy ako mag take ng picture because I have to mind Jami and our things. I am also in charge on our transfer and where to eat so I really don't have the energy to take pictures anymore. Wala pa naman akong talent in photography so I can't take kahit snapshot lang na maayos. Lol! Add in the fact that phones camera wasn't that good either. =( But then, I know these memories were captured by the best camera and film in the world - my eyes, mind and heart. Lol! ;P