How To Handle Your Finances Better in 2018


There are two things I always resolve for the New Year: to have a fit body and to have a fat wallet. I say I'm more successful achieving the latter. I know both requires discipline but it is really easier to control your spending than your food intake. Agree? Let me share with you what I did this year to help you get started with your financial goals.

1. Pay off your debts and avoid making new ones

How many credit cards do you have? Are you paying a huge amount of annual fees to maintain all those plastic money? I have my only credit card since 2000. I decline any offer for an additional card. I make sure that I only swipe the card on things that I really need and I have the capacity to pay in full before the due date. Imagine how much you will save on the finance charge and interest. If I have to purchase something on installment, I make sure that I avail the 0% interest offer right away. It is better than opting for the straight payment and then eventually converting to installment.

  • Have your credit cards terminated and maintain one or two cards only (Mastercard and Visa)
  • Debit card is much better as long as you do not drain the balance of your bank account
  • Go for 0% installment
  • Pay on time

2. Prepare an annual and monthly budget plan

List the expenses you foresee to incur and the purchases you need to make. From the list, prioritize. Do you really need a new cellphone or should you have a budget instead for a health insurance? How many vacations do you plan to have? How much can you afford to spend? 

  • Make list of needs and wants. Then prioritize.
  • Stick to your budget.
  • Remember, you need not deprive yourself. You just have to know when to indulge.

3. Be conscious with your cashflow

The simplest definition of cashflow is the movement of money, the inflow and outflow of cash. Are you spending more than you are earning money? For bloggers attending events, are you receiving more than the value you spend (transportation, meal, web hosting, etc)? For freelancers, can your earnings cover for the costs you incur (electricity, internet, etc)? For the employed, is your salary enough to keep you afloat? 

Keep a notebook where you list the expenses you incur on a daily basis. List everything. Even that piece of candy you bought. You'd be surprised with how much you are spending. This list can also help you with #2. 
  • Don't work hard. Work smart.
  • Inflows > Outflows

4. Keep those loose change

Coins that you feel have a little value when pooled is a fortune. We have a huge piggy bank at home where we put only 5 and 10 peso coins. We were able to save P13,500 when we opened it. I keep a small box in my work desk drawer where I also save the coins that doesn't make it to the piggy bank.

  • Keep those coins
  • Piggy bank is the first step to teach kids to save

5. Set a goal

Don't just dream. Dream big.  What is it that you want to have in 2018? Here's where you are allowed to list your WANTS.But don't stop with dreaming. Achieve it. Do the first four I mentioned above. Look for extra source of income (or you probably might want to consider a more financially fulfilling job). Create a visual board and pin all those things you want to acquire. Focus on the goal and be optimistic that you will achieve it. 

To Inspire

Me and my husband bought a house in 2012. We loaned it from the bank payable in 25 years. We never wanted to wait for 25 years to pay the debt off. It would be a waste of money paying for the interest. We planned to pay it in 5 years.  We did not go on vacation abroad for 5 years and avoided unnecessary expenses. And yeah, it was fully paid in 2017.

My husband decided that the 20-year old Mitsubishi Lancer is due for replacement. We bought the 2018 Toyota Fortuner last October payable in 2 years. And yeah, we have no plans of waiting for two years to be debt-free again.