Coming from finding your net worth, let’s talk about what you can do with what you know.  It’s time to make some short-term decisions.

I quit my well-paying corporate job at the time that we were heavily in debt from hospital bills, paying off the mortgage on our house, with a high-maintenance infant, a diaper-age two-year old, and a school-age six-year old.

But after some stressful nights, we came up with our numbers and those numbers became the basis of mapping out our financial future.

Before we could even begin to formulate plans on how we can decrease our liabilities and increase our assets, we have to deal with the immediate needs first.  We had to make short-term decisions.

What are our absolute necessities?

On top of our list then were child care, food, utilities, debt repayment and house mortgage.

Child care was steep at that point, because our newborn son was not completely out of the woods yet. We received some financial help from family and friends while our son was still in the hospital, and that tremendously helped us. Among our top priorities was the mortgage on the house.  There was no way we could consider skipping payments on that, or we would be sleeping on the street.

Where can we drastically cut expenses?

On top of our list then were lunches out, weekend trips, entertainment, and househelp.

Those items were really cut drastically.  Well, the lunches out and  and letting go of the helpers (we had two) was the highest source of savings for us, as two mouths to be fed were taken out, and all the expenses that go with having two extra bodies in the house disappeared all of a sudden.

Lucky for us, we were already comfortable with the monthly payments on our house and we knew that we could sustain it.  Our kids were never introduced to buying toys.  We’ve always had a simple life, and we started investing on educational materials while I was still pregnant with our first child.  We also have family who give us hand-me-down clothes, so the changes we had to make did not have too much effect on the lifestyle we were living.  But for those who are facing drastic changes, it pays to make a list of what really matters in terms of lifestyle, needs and dreams, then refine and prioritize your list until you are left with the kind of life that you are willing to love.  Again, I reiterate on deciding and settling for the kind of live you are willing to live.  You have to make your refining and prioritizing with choices that feed your soul.

That quote from Benjamin Franklin is so true.  In the same manner that a cent saved here and there can actually amount to something substantial.  So go ahead, brew your own coffee and stay away from Starbucks and CBTL.  Ask for water in restaurants instead of ordering drinks with your meal.  Or take the bus instead of driving to where you’re going.  It will not only impact your wallet’s health.  You’ll make Mother Earth very happy, too!

Here are some kuryentipid tips that have saved us hundreds, if not thousands of pesos monthly:

  • Buy clothes that do not need ironing
  • When washing school/office uniforms (which, of course, need ironing), do not wring them.  Instead, just let the water drip and put them in hangers immediately.  If you have to wring them (when in a hurry to get them dry), make sure that you shake them off well before hanging.  That will lessen the wrinkles, and will mean less time and effort in ironing.
  • Cook one big batch of rice for lunch and dinner.  Just heat the viand come dinner time.
  • Load large batches of laundry.  Electric consumption is almost the same for large and medium loads, so go for more clothes to wash in one load.
  • Skip the spin/dry cycle when you can.  Take advantage of the heat of the sun to dry clothes.
  • Paint the bathroom walls and ceiling white.  You won’t need to switch on the light in the bathroom during the day.
  • Assign one room where the whole family can do activities individually or together, so you can limit the number of lights, aircon or electric fans in use at one time.
  • Let go of that extra set of TV.

There’s a lot more you can do to relinquish unnecessary expenses. And while you’re watching your expenses, I would strongly recommend that you set up a system  for your monitoring.  Create a monthly payment schedule to remind you when payments are due.  And of course, you may also want to use this Excel file.

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