8 Things to Remember When Living Alone for the First Time

In our adult lives, it is inevitable that a day will come when one must move away from home. Though in our Filipino culture it is not the norm to live separately from our parents once we turn 18, there are really times when we’ve got to live on our own. Most of the time, the demands of work and the need to cut down on travel time have made many of us condo dwellers and apartment settlers. Others even find themselves in foreign lands for work or further studies, forced to live life independently.

Last year, I chose to live two cities away from my mother together with some friends of mine. It was exciting and quite a bold statement since I had barely graduated from college that time. I was eager to begin a life that didn’t abide by my mother’s ridiculously early bedtime and other eccentricities my sister had. The excitement, however, was soon replaced with somber realizations that life on your own is a big turnaround from the days you used to lead.

If you’re thinking about being on your own or are in the middle of figuring how life works outside your parents home, here are some tips that might help you out.

#1 Prepare a budget
One issue I always faced when I lived in a condominium unit is the rent. Unless you’re fortunate enough to have a pad you don’t have to pay for, you’ve always got to set aside money for your rent first and foremost. It’ll take away a big chunk of your money but it will straighten out how you’ll survive till your next paycheck. After that, you need to account for other expenses, like utilities, food, transportation, etc. List all of these down and project an average amount you’ll need. Stick to that projected amount.

Aside from this, always keep a list of expenses. You’ll then easily spot what you’ve splurged on and what you can save up on to give you more money for other needs.

#2 Learn how to cook
Sure, buying food every night is the stuff of your childhood dreams. However, it won’t help you out in the long run. Once you’ve got your own digs, try to get an induction cooker so you can cook your meals. Relying on restaurants and delivery services will encourage unhealthy eating habits and will severely cut into your budget, which will cause bigger problems.

#3 Have a good relationship with your landlord
You don’t have to make your landlord your best friend, and of course, be wary because there are some terrible ones out there. But your relationship with your landlord is fairly simple: It’s all about when you’ll pay the rent.

So before moving in, make sure you have a clear deal with your landlord. Have a contract typed up if you have to (and most landlords and living spaces usually require you to have one; be wary if you don’t) which clearly states the amount you will be paying and when will you be doing so. Fulfill your end of the contract always and you should be fine. If you feel you can’t make it on a certain date, it’s best to tell your landlord beforehand and give an alternate date on when you’ll be paying your dues.

Having this attitude will help you out since your landlord can usually help you settle your utility bills and other concerns in your place. It’ll show that you care about the unit as much as he or she does and that you respect the space he or she owns even if you paid for your right to be there.

#4 If living with roommates, create weekly bathroom and chores schedule
No matter how well you get along with your roommates, you will fight about chores and whose turn it is for the bathroom duties. If you find yourself sharing a space with friends or strangers, try to come up with a written agreement on who does what at a specific time and who’s turn it is to take out the trash. Stick the agreement on the fridge or on the bathroom door. It’s a simple preventive step to avoid shouting matches later on, trust me.

#5 Learn how to do laundry efficiently
I have to admit I turned to a laundry service when I needed clean clothes when I moved out. However, in other countries that kind of service might cost a pretty penny. A friend of mine who lived in Japan offered up some unique advice when it comes to laundry, “Do it twice a week. Doing it in one batch will take too long and it won’t dry properly.” She also told me to separate clothes in laundry bags so socks don’t go missing and you won’t accidentally mix in a red shirt in your all-white batch.

#6 Always secure your windows
In high-rise condominiums, it’s good to have extra security for your windows. Have locks inside and outside the windows. Although security guards are in your building to make sure no suspicious individuals enter, don’t forget that some people can be crafty. One time, my friend’s boyfriend lost his laptop when neighboring construction workers entered his room through the window. So don’t get cocky just because you live high up.

#7 Ask your security guard to refer you to carpentry and plumbing services
Calling your home for your trusted handyman (or your dad or older brother) when you’ve broken the faucet and while water is spewing everywhere isn’t your best option. In these cases, have the security guard, landlord, or reception office of your place send over someone who can help. Having another person witness and talk to the person who will help you out in this situation will also prevent any untoward incidents or the chances of you getting cheated. (Some utility men overprice their services when you live alone.)

In cases you can’t really contact your landlord for such issues or that your place doesn’t have a direct administration, ask for the referral before any emergency happens from your local authorities like the police in your area.

#8 Don’t forget to visit your first home
You may think you’re happy where you are now but don’t forget that the people back in your first home will miss you. Go home at least for a weekend or a special occasion when you can. Just because you’re on your own doesn’t mean you’re too good for a home-cooked meal or for a night in with your parents.

Besides, being responsible enough to find time for those you’ve left behind really shows you’ve got #adulting right.


Photo courtesy of Sex and the City
 
 source: preen.inquirer.net

The Emotional Effects of Debt and How to Deal

Debt can send out finances into a downward spiral fast. But besides being detrimental to our finances, there is also a strong emotional aspect to debt.

Denial

Often with overwhelming debt, people choose not to even deal with it. They let bills pile up and may not even realize how much they owe and try to ignore it. But denial is only going to make things worse with late and delinquent payments resulting in bad credit reports, higher interest rates, and late fees which lead to even more debt.


How to deal: Instead of hiding from it, deal with it head on. As difficult as it may be, the sooner you face the debt, the sooner you’ll be able to take steps to get rid of it. Write down every bill you have and the interest rate to make a plan on how you will start working towards getting out of debt. Call your debtors to see what type of payment plan you can work out with them.


Stress

Watching bills pile up and getting calls from people you owe can easily lead to stresss. Wondering how you’ll get out of debt and not seeing a clear solution is a stressful situation as well. Often people in debt will stress about mistakes in the past and stress about what the future brings instead of concentrating on what they can be doing this moment.

How to deal: The first step is to start working towards getting out of debt. Make a plan to cut spending to put more money towards debt and to make extra income. Having a plan will reduce the stress. Try the National Foundation for Credit Counseling’s budget calculator to create a plan that’s best for you.  Also, don’t let the debt consume you. Take time for free or cheap stress reducing activities like exercising, getting together with family and friends and reading and writing.

Embarrassed

 

It’s not a surprise if you’re embarrassed by the debt you have. You may feel ashamed and regretful of the mistakes you might have had or feel that you are alone with having debt. Unfortunately, having debt is common. According to Creditcards.com, the average American household has $15,950 of credit card debt.
How to deal: Understand that you are not alone in dealing with debt. Everyone makes mistakes or has events happen outside of their control that may lead to debt. Instead of being embarrassed, be proud that you are doing everything you can to get out of the debt.

Anger

 

Sometimes it’s easy to be angry at and blame a spouse or family member for digging you into debt. You may be angry that your spouse lost a job or took a pay cut and as a result, caused you to accrue debt. It’s estimated that one of the main reasons why couples fight or get divorced is because of arguing about money.
How to deal: With patience and communication, this is a time you can pull together with your spouse instead of breaking apart. It’s okay to calmly talk about your anger and disappointments together, but do so in a way that is productive instead of hurtful. Work together to come up with a plan for how you will rectify the debt.



Fear


It’s scary to not know how you will get out of overwhelming debt. You might also fear creditors calling or losing your home or car. When you’re trying to figure out your next step, it’s scary if you’re not sure what to do.

How to deal: Visit the U.S. governments website on dealing with debt to ease your fears and learn what to do. Once you’ve accepted any mistakes and start making steps towards getting out of debt, you’ll be able to lose some of  these fears. Don’t fear the people you owe, instead talk with them about your options for repayment.

Keep in mind that getting out of debt will take plenty of patience, planning, communication amongst both family members and people you owe, and a lot of hard work.

source: financialhighway.com

Raising children with High FQ

QUESTION: Hi, I read your article on PhilStar.com. I have two questions: (1) At what age should I start teaching my child about money? (2) Do you have a program (excel file or whatever) on budgeting or monitoring income and expenses? Thank you. – from Aireen Canales via email

ANSWER:

1. When I throw back the first question to parents, I get answers ranging from three to seven to teenage. However, I treat Financial Literacy as a journey and I think it’s best to start this journey really early on because it is a way of life.

So I encourage all parents to start the Financial Literacy journey of their child as soon as he is born. Open a savings account for him. That’s where you deposit the cash gifts that he will receive from friends and relatives on his baptism, birthday, Christmas and other occasions. Anyway, these are his money and it’s best not to commingle his funds with yours from the very start. Since he is still a minor, open an account “In Trust For.”

Can you imagine how many Christmases and birthdays there are before your child starts asking about money? And when he starts asking wouldn’t it be nice for you to say, “Honey, do you know you that you already have something saved up and invested?” This will set the tone of abundance in your child’s financial life. Just make sure that you are able to impart the correct values as you teach him about money so that this feeling of abundance is not confused with the feeling of undue entitlement. Entitlement means he can just use his money just because he has it and didn’t even have to work for it. Feeling of abundance is knowing that when money is conserved, invested well and respected, there will always be enough. And of course, this cannot be done in any great lecture but only by example from his parents.

As soon as your child learns to communicate, you can tell him that he does not have to spend all the aguinaldo and the birthday gifts he receives in cash. Make it a habit for him to automatically save and invest these gifts. If your child has godparents who regularly give him cash, encourage your child to invest these gifts in higher yielding instruments like fixed income investments and stocks. You may not realize it but your child has a higher risk appetite compared to you. He is still a minor and hopefully, you are the one providing for his needs until he becomes an adult. He has a longer holding period when it comes to investments.

When he goes to school and starts receiving cash allowance, instill the habit of setting aside a certain percentage of his allowance, say 10% to 20%. Create a system that is regular and automatic, if possible. When my sons started receiving cash allowance, we gave them a “treasure box” where they put their savings complete with a small notebook that records the amounts. When their cash savings in the box reaches at least P500.00, they deposit it in their savings account. When their savings account balance reaches way beyond the minimum balance, they invest in either fixed income or stocks. In other words, there is no need for them to keep their savings in low interest earning savings accounts.

As your child grows older, expose him little by little to your actual household expenses. You may show your utility bills to make him more aware about conserving water and electricity. You can bring him along with you when you do your groceries. Make a guessing game out of your grocery bill, restaurant bill, etc. When making purchases, explain to him your choices.

Money is an abstract concept and a lot of families use transparent jars or cute piggy banks to illustrate the concept of saving to their children. Some label their jars with Saving, Sharing and Spending to make it easier to understand for their young children where their money goes.

Remember that time is on your side when you start them young, so the earlier the better. To show the magic of compound interest to your child – i.e. how much he can accumulate by regularly setting aside money for saving and investing, go to Chapter 6 Magic of Compound Interest of www.RaisingPinoyBoyc.com. This will give you a free excel file wherein you can plug in your own values using your child’s actual savings and which will give you the amounts he can accumulate at different age levels.

If you think you missed out on this “as soon as your child is born” timing, don’t worry because the next best time is NOW! So start now.

2. On the second question regarding a program or file that can help you monitor your income, expenses and budget, there are free apps to choose from. Check your phone, if it is a smartphone, chances are there are various apps you can download for free. I tried using iXpense Lite on my iPhone and it was good. Since you carry your phone with you all the time, you have the ease of recording each time you incur an expense. It gives you a visual indicator of monthly budget vs. expenses, an expense summary for the month, average per day, etc. It also allows you to store digital photo receipts, generates graphical reports, and a lot of more.

I used it for quite some time to test it but when I changed phones I didn’t bother to transfer the data and since I’m a creature of habit I kept using my old and reliable (but now quite complicated) excel file which I started way back during the early years of our marriage. It has evolved from a simple Income Statement into a massive file called Monthly Cashflow and Income Statement. In the beginning, Expenses came after Income, now Investments come right after Income and the last items are the Expenses – our way of practicing “Pay Yourself First.”

The idea is to use something that you’re comfortable with. As much as possible, try to make it fun, and not too heavy an ordeal to record your cashflows. What we also do is to prepare Balance Sheets so that we know where our investments go. This makes saving and investing fun because we see our assets grow and it somehow helps us in delaying gratification. But that’s a whole new topic on its own.

For the meantime, I wish you Aireen and all the readers an enjoyable, even if sometimes challenging, financial literacy journey with your children.

source: philstar.com