How To Discipline Yourself To Live Within Your Means

Have you asked yourself, “Kailan kaya ako yayaman?” even if you are earning bigger than your other friends and relatives?

The truth is, you may never achieve the goal of being rich if you are currently living beyond your means. Did you know that the reason you are not achieving it is not because you have small salary but rather because of your overmuchness lifestyle choices?

If you believe you are guilty, then you should take these steps to turn things around.

1) Know your net worth.

To give you a clearer view on the status of your finances, it is recommended that you conduct a net worth analysis.

Analyzing your net worth is quite simple:

Add the following outright assets:
Savings + Retirement accounts + Stock investments + your real estate property + others

Add everything you owe (debts):
car loan payments + credit card bills + personal loans + other payables

Then subtract your assets from debts in order to arrive at your net worth.

If the result is a negative number, then you are living beyond your means. This means that even if you have a job today and you are earning a salary, you still essentially own nothing.

In order for your numbers to become positive, start living within your means.


2) Practice cash-only living.

Many people, Filipinos included, do not really understand what living within or below means for obvious reason: they live on loans and credit cards.

The best thing to mitigate this problem is to instill a habitual behavior of living on cash alone. Just try 21 days of spending with your cash alone and not with your credit cards.

This will challenge your spending behaviour but you will be surprised on what you can do if you are able to make it on the 22nd day just using your cash on hand for your daily expenses.

Do not forget to record your debts as mentioned in our recommendation No. 1. The limitations of living on cash only may frustrate you, this will be a learning experience for you as you will be forced to be more careful and thoughtful in identifying where you are spending your money.

3) Clear out the clutter.

If you are a willing victim of the culture of rushing to malls whenever there are “sale offers”, you must be collecting items you don’t really need inside your closet or drawers.

If your closet contains items you haven’t worn in over a year, old technology, books, or sporting goods, you’ve already got more than you need.

The greatest 3-day sale madness in town is not really helping you saving money when you are actually using your credit card or money you borrowed from your officemate.

Maybe it’s time for you to clear out the clutter and consider selling your items on eBay, Amazon, OLX, ukay-ukay shops, or even at your garage. Or better yet, why not donate them to people who may need them the most?

4. Reformulate your definition of success.

While you really do not show your bank savings or credit card bills to your social media “friends” or neighbors, the way you dress yourself, the car you drive, the restaurants you go to, or how frequent you travel to places other people have not been to in their lives may make people judge how well you are doing. Even if the truth is you don’ really have the means.

There is a big difference between being truly rich and just trying to look rich.

It’s not that complicated to follow these steps but you need to convince yourself that there’s no gain if there is no pain.

Be guided on how to prepare yourself to coming back home for good by subscribing to Rock To Riches for FREE.

Rock your way to abundance!


Should You Change Your Investment Strategy?

Being in a comfort zone is not an assurance that you will succeed forever. In the same manner, doing the same strategy in your wealth-building all your life will not guarantee that you will achieve your goals.

Why? Because things change. Your relationship status change. From being single you either get married or be in a domestic relationship. If things get worse, you may fall under the category of “It’s Complicated” or “Separated/Divorced”.

Along the way, you may also lose your job, shut down your business, or get near the golden years of your life.

Other than these (or because of these), your financial status change as well. These big life changes will most likely need adjustments on your finances.

Here are some of the most life-changing events that may happen to you sooner or later and are reasons for you to re-align and reboot your investment strategies.

1) You are going to be a father or a mother.

That’s because you will need to consider certain variables such as medications and supplements, medical consultations for mother and child, delivery of your baby, healthcare, crib, diapers, food, nanny services, among others.

In my case, we had to leave the country in order to earn more than what we could back home.

According to iMoney Philippines, in this day and age, raising a child, in the best environment, can cost as much as P500,000 a year. The average income Filipinos will, of course, have to adjust accordingly.

It’s best that you re-calculate your regular investing amount and make sure you add your child and spouse in your list of financial goals.

2) You lost your job or you just want to find a new one.

Anyone’s employment situation will surely change anytime. Everyone should be ready, especially our OFW’s who are living on per contract job stints.

Your investing schedule will definitely need an overhaul should become unemployed. While looking for a new job, make sure to live way below than what you used to.

Also, do not invest your severance pay/end-of-service benefits in high-risk placements such as the stock market. Keep these as part of your emergency cash instead.

Once you found a new lease of life in another company, you may then go back to your normal investing schedule.

Whatever your financial goals are, you should determine whether your previous long term goals have now become medium-term or short-term goals.


3) Your kids have grown up and you are now alone.

Time will come when your children finally grow into young adults. He or she will go to college and find their dream jobs or settle down on their own.

This may bring smiles on your face but don’t get too confident. You should remember that these are usually the struggling years of a young adult.

You may allow your kids to work while studying but this will never be enough. You may need to take out loans or use up your emergency fund if there are expenses not covered by your investments intended for his or her tuition fees alone.

But always remember, never ever touch the money which is intended for use by you or your spouse during your retirement years just to pay up for your growing child’s school needs.

You can instead help them out find other ways to address these. But not from your retirement fund.

4) You now belong to the S-Gen or the Sandwich Generation.

You may be one of the many Filipinos supporting your aging parents or even your grannies while also taking care of your own children.

If you are currently in this situation, then you are now a lucky member of the Sandwich Generation Club. This is a very crucial time to build more emergency fund. This is a time when cash is really king.

If your aging parents have bank and investment accounts, it’s best that you discuss about these with your other siblings and agree on what to do with these while they are still healthy.

If they have properties under their names, it is now the right time to find out who their estate planner is.  

5) You are nearing your golden years.

Your long term goals may have started to close in. Now is also the right time to for you to have some fine-tuning of your investment strategies.

There should be no more close monitoring of the stock prices or currency rates. You may need to slow down and protect yourself from the volatility of the markets and go instead for lesser-risk investment vehicles such as balanced funds or other fixed income instruments.

You may also need to check on the possible benefits that you can get from your insurance packages and SSS or GSIS pension plans.

While keeping track of your money, do not forget that you should also enjoy the rewards of preparing earlier in your life so that you can have the best retirement years possible.

Know more about rebooting your investing strategies and keeping track of your finances by subscribing to Rock To Riches.


Rock your way to abundance!


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How To Avoid Spending Too Much

Some of our relatives and people we know come home from the mall or the supermarket on a weekend or after payday with bags of goods that they definitely know they don’t need. Whether they admit it or not. Or are you just like them? 😉

There’s a new study that’s saying that there’s a simple solution to this kind of problem and we’re gonna find it out in a bit.

When we visited SM a few months back, a statue of Batman stood firm and tall between the toys’ section and the appliances display area of the department store. It’s as if Batman was saying to SM customers and window-shoppers, “Akong BAThala sa inyo.” 😉

And so we witnessed how many people in the appliances section were talking about buying that fancy P300-salt and pepper shakers on sale when you can actually get the same pair for less than P100 at the public market. Continue reading How To Avoid Spending Too Much