Choosing the best financial product

Different financial products are readily available in the market and since there are so many options, it made difficulties for us to choose the best one to a point that we become paralyzed by it and end up relying on the sales agent’s recommendation which might not always be suitable for us.

People who have bought these recommendations then ask other people who bought the same product to affirm them which may be good at some point but in reality, the financial product they’ve bought are not what they really needed.

To avoid this, we must carefully asses ourselves so that we can match the best product available in the market to our specific needs.

Choosing the best financial product could be daunting but actually it is really simple.

Let me share you the principle that I use on how to choose the best financial product.

The Principle of Suitability

The reason why Personal Finance is called personal finance is because it is ‘PERSONAL‘ meaning it is unique. All of us are unique and that’s why financial products should match that uniqueness within us.

The key will be self awareness, knowing one’s self is the key to filter what products we should choose that would best benefit our interests.

Let me give you an example

Juan and Pedro are both single. They have the same job, the same salary and they live on the same house. They earn 20,000 pesos every month and they share their expenses at home. Both of them manages to save 5000 pesos per month and they put it in each of their own piggy bank so that they could buy themselves something they want in the future.

One day a banker met with them and offered them to invest and grow their money. The banker offered them two options:

Option 1 : Invest 5000 pesos per month at an interest rate of 15% compounded annually and can be withdrawn anytime.

Option 2 : Invest 5000 pesos per month at an interest rate of 10% compounded annually and can only be withdrawn after 10 years.

Both Juan and Pedro thought about it very carefully.

Pedro chose option 1 while Juan chose option 2.

Now my question is, who do you think chose the best financial product? Is it Juan or is it Pedro? Who ended up having more money?

If we based our answer mathematically the clear winner would be Pedro. It is very obvious that option 1 is better than the other. With 15% interest rate and no liquidity issue Pedro would end up having more money.

But let me continue my story.

Juan and Pedro are both spenders. When they see a big amount of money they are always tempted to spend it.

They save 5000 pesos per month and when it reaches a big amount, they will use it all by buying something or using it to travel somewhere.

Every year they both check their investments and when Pedro checked his investments on the first year, it grew by 15% just like what the banker has told him. Same with Juan, his investments grew by 10% in the first year.

When they knew that their investments grew, they wanted to use it. Pedro withdrawn his investments so that he could travel while Juan can’t because he can only withdraw after 10 years.

Pedro went on a travel while poor Juan wasn’t able to withdraw.

Every year this happens, Pedro enjoys his money after every year while poor Juan can’t withdraw until the 10th year.

When the 10th year came. Both of them checked their investments and  as usual Pedro is very happy and excited to withdraw his money while Juan was shocked with what he saw. His money grew to a million pesos while Pedro only have 69000 pesos on that year.

The total money of Pedro for ten years was 690,000 pesos because he withdraws and travels every year while Juan, at the end of the 10th year have grown his investments to 1,051,870 pesos.

So who ended up with more money? Clearly Juan did but who is more happy? We cannot tell because both of them are really happy.


Pedro chose option 1 because he wants to explore the world and travel, that was his dream. That is why every year he withdraws his money and use it as a travel fund. He was very happy because the investment vehicle made his dreams come true. He didn’t regret of having less money in the end because he know that no amount of money could exchange with his satisfaction on realizing his dreams of travelling.


Juan chose option 2 because he knows that he is a spender like Pedro but travelling is not that of a big deal to him. What he really wanted is to buy a house and option 2 made him stick with that goal.

If he chose option 1 then it will be faster for him to buy a house but he could have ended up travelling with Pedro every year and might not be able to stick with his main goal.

He withdrawn all of his money after the 10th year and bought his dream house. Smart Juan!

Wrap Up

When choosing the best financial product your best metric is your knowledge on how much you know of who you truly are and what you want in life. Often times people look only at the monetary value of what the financial product could give without looking at the whole picture.

The principle of suitability tells us that everyone of us is unique and the financial product that we will buy should suit well with our uniqueness.

Know how unique you are in your finances, analyze your spending habits, financial behaviors, goals in life, and what really makes you happy and secured.

The more you know of yourself the easier for you to choose the best suited financial product for you that you wouldn’t regret. (ever!)


After all, money is meaningless if we aren’t happy and full of regrets in life.

Photo Credits : Jeremy Brooks


4 advantages of being financially literate at an early age

Recently, the Philippine Department of Education (DepEd) finally added financial literacy to our basic education curriculum. This means that it will be mandatory for schools to teach financial literacy programs to their students specifically financial management and investments. This is actually a very good move by DepEd because financial literacy was never taught at school ever since.

Over the years we didn’t have a proper education when it comes to managing our finances, we get our financial knowledge from our  parents and from our experiences, which are pretty much either good or bad. So if you have parents who have bad financial behaviors, then most likely you can end up like them or the opposite if your parents really have good financial behaviors and they’ve successfully pass those values to you.

Another media of having financial education is through experiences. Bad experiences with money leads to fear or learning. Example is investing, their are scams out there and there are lots of it. If you happen to invest in one of them then that will be a bad experience for you when it comes to investments and because of that experience you now fear ‘investments’ because your experience gave you the impression that ‘investments’ are most likely scams or you may have treated it as a learning phase in your life where you took the bad experience for you to learn more about investments and be careful the next time.

If you have read my story , I got my financial education through experiences and I am thankful that I have experienced those at an early age. Starting early will always be an advantage for everyone, thus the saying ‘the early bird gets the worm’. Having financial literacy at an early age has a lot of advantages and I couldn’t enumerate all of them but in this article I would like to share to you what are the most important advantages (in my perspective) when you have financial education at an early age.

1. Developing good financial behaviors early

Financial literacy is just the first step, it doesn’t mean that if someone is financially literate then he/she would be good in handling his/her finances. Being financially literate is just the first step to financial freedom and your financial behaviors are the ones responsible to take you there. Success in personal finance is not black and white, it is a dynamic and a behavioral thing.

Starting early with financial literacy will give you awareness how money works and how it affects your life, knowing that early on will give you the advantage to develop your financial behaviors on how you will react effectively in different circumstances where money is involved.

Lets have overspending as an example. Financial literacy will teach you how to budget money, to allocate every peso of your income. After comparing your budget list to your actual expenses, you found out that  you are overspending, financial literacy made you aware of that and the reason behind is because you spend too much on Uber, your behavior towards the comfort of your transport is the one hindering you to stay within your budget and because of that you started to lessen the use of Uber. Months after months you started noticing that Uber isn’t much that appealing to you because your behavior towards it already have changed and made you financially better.

2. Developing long-term thinking

Financial literacy teaches the time value of money, it will teach you to project values of your money in the future so you can make better decisions in handling them. Having this on an early age helps you vision out your financial goals in life and these financial goals in life will develop you to think long-term.

Having a ‘long-term’ thinking at an early age will make you become a great decision-maker in your life, on a financial perspective, it will help you utilize your income and it will also help you decide better on which financial products and services will best suit you that will help you achieve your financial goals and protect yourself with uncertainties of life,

Long-term thinking will not only help you in your finances but also in different areas of your life like health, relationships, career, and etc.

3. Developing planning skills

Planning our finances is tough because ‘Life’ happens. Over time, our interests will change, our responsibilities will change and the way we spend our money will also change. Having financial literacy will teach you life cycles and at an early age it will help you develop your planning skills so that when ‘life’ happens to you, you will be more prepared and ready for the challenges of life.

4. Developing discipline early

Having discipline in handling our finances is tough because like what I said earlier, personal finance is a behavioral thing and the challenge is to be consistent and disciplined. When financial planning takes place, it doesn’t stop in there, execution of the financial plan is also a major key for us to be successful in our personal finance to experience financial freedom.

Executing a financial plan has a lot of needed discipline for it to be successful. It takes discipline to stay within a budget, it takes discipline to stay invested when the markets are crashing, it takes discipline to stay away from too much credit card usage, it takes discipline to save money for your emergency fund, and etc.

Having financial literacy at an early age will help you develop your discipline towards your finances so that you will have more chances of becoming successful in the future.

Wrap up

Having said these advantages, I encouraged you to be financially literate as early as possible because it takes time to develop a great character towards money you will need time to develop those so that you will be successful in your personal finance, it will also help you avoid a lot of financial mistakes over your lifetime.

News Source :

*This article was first published at The Manila Times

Photo Credits : Richard Messenger

Why financial knowledge shouldn’t be the priority

According to many finance advocates, financial knowledge is something we need in order to fight poverty(and I agree on that). It is something important so that we could have a grasp on how money works in our day to day lives. Once we become financially literate, we can now apply it in a financial planning process to achieve our goals in life such as dream house, car, education, retirement, or our own business.

I don’t want you to be confused, while this blog promotes financial literacy (still is), I just had some realizations on a spiritual perspective.

There is something far more important in our personal finance that made me say financial knowledge shouldn’t be the priority and that is because..

Financial knowledge doesn’t move us in faith

We have to understand that God is the Lord in every area of our lives including finances. We have to understand that He is our provider, not our employers, not our businesses and not even ourselves. It is He who gives us the ability to produce wealth(Deut 18:8)

Financial literacy tells us the numbers. It shows us a clear picture of projecting one’s finances mathematically. One can easily project how many years of saving and investing are needed in order for him to afford his dream house but because of knowing the numbers, often times it pushes us away from believing what God can do in our lives.

While financial knowledge gives us the edge to achieve our financial goals. Sadly, it seems that it doesn’t move us in faith. It teaches us only to rely on what we can do rather than rely on a great God who is not only able but is also willing to provide for what seems impossible to us.

In every financial decision that you will make, acknowledge God, ask for wisdom and guidance, and partner with Him in reaching your financial goals.

My challenge for you today is to let financial literacy be secondary and prioritize your relationship with your Provider.

Seek the Kingdom of God above all else, and live righteously, and he will give you everything you need. 

Matthew 6:33 NLT

Isn’t that a great assurance from God? Yes you heard that right ‘everything’ as in everything you need, may it be finances, health, relationships, career, self fulfillment, contentment, security, appreciation, everything you need!

Let me know your thoughts in the comment section! 🙂

Photo Credits : Tali Le Bamba


Things to do in an emergency when you don’t have an emergency fund

Emergencies do happen, though it might not come too often, there will always be a chance that it will. Everyone of us is exposed with this kind of risk in our lives and that is why we should always have an emergency fund that will act as a buffer when things like these arise.

A buffer fund would be your best weapon in coping up with an emergency but it will depend on what kind of emergency you’ll be having. Find out how to know the price tag of your emergency fund here.

But what if the emergency happen and you don’t have yet an emergency fund for it? What will you do?

Here are  the things that I could advise to you whenever you get into that kind of situation.

1.Stay calm and assess the situation

When emergencies happen to someone, the tendency for a person is to panic. Especially if he doesn’t have a clue of where to get the funds to pay for the losses caused by the emergency. Panicking will just make the situation worse because when a person panics, he losses focus and his decisions are greatly affected(pressured) by the situation.

So when an emergency happens to you and you don’t have a buffer fund for it,  do some heavy breathing first, breathe in and out first for a few seconds and try to stay calm as possible. Doing this gives more oxygen to your brain so that you your head would be clear and ready to assess the situation with a sound mind.

In assessing the situation, identify the type of the emergency that happened:

  • Short Term – defective laptop, stolen phone, lost money.
  • Mid Term – loss of job, hospitalization, home repairs.
  • Long Term – natural calamities, fire, earthquake, theft, illnesses/disablement

If it is only a short term type of emergency and you know that it only needs a bit of sacrifice then do so.

Ex. Losing your iphone doesn’t mean you have to replace it with a new one, maybe buying a cheaper phone for the mean time would do and just save for a new iphone later.

If it is a mid term or long term type that needs substantial amount of money then..

2.Check your immediate resources

Whether it is your piggy bank , a gadget , a pair of Jordans, insurances or anything that has value, put them in a list. This will be the list of your immediate resources that you could tap into. Once you complete your list.

Claim the insurances that are applicable, it might be good enough already to cover everything but if not.

Choose stuffs that you can sell immediately. It may be hard to sell stuff especially if you have a financial sickness called ‘stuffititis’ but remember once you get rid of these stuffs, you can pay already the damages of the emergency and also get rid of stuffs that just clutter in your room(gives stress in maintaining).

In some cases, selling stuff might cope up only a portion and…

If selling your stuff wont suffice the damages caused by the emergency, (atleast a portion of it have been dealt with already) the next thing you might need to do is to…

3.Find ways on how to make money

There are a lot of opportunities out there and sometimes we just need to widen our eyes and open our minds for us to see them. If the emergency is severe, then a fund raising might be a good idea, you might be surprised because there might be a lot of people who wants to help you.

Since you have sold stuff already in the latter step why don’t you continue to sell stuff and do ‘buy and sell’ , you can have a decent income from it.

Make freelance jobs if you are good at something(music, art, dancing, programming etc.)

Another way to make more money is to spend less money.

Create a budget and put aside a smaller portion in your expenses, just for the mean time so you can adjust according to the emergency you are having. Lowering your lifestyle might be hard at first but you have to really decide. If you want to get pass through this then you have to make a bit of sacrifice.

The bottom line is, you have to make more money in this kind of situation because the emergency needs you to.

4.Borrow Money

This is your last resort, and by saying last resort, this means that after trying to do everything that you can do to solve it on your own, this should be the last thing on your mind.


Because solving a problem by using a potential problem in the future won’t make sense.

Your goal in ending this phase in your life should not carry you a baggage that may cause another problem later.

Try to borrow money first from the people who are closest to you, they will most likely not put an interest in the money you will borrow. Be honest and considerate as  much as possible when borrowing money from them because you don’t want to ruin your relationship because of this. Tell them first your situation and why you are borrowing money from them, also don’t give them false promises on when you will return their money back, just plainly tell them when you can really pay them so that there would be a good understanding between both parties.

Also never get angry or feel deprived if they didn’t lend you, remember that they aren’t obliged to do so.

5. Remember that this is only a phase in your life and this is only TEMPORARY

People grow and mature in life and they say that the best teacher is experience. The emergency that happened to you is only a phase in your life and it is only temporary, it will come to pass. It would be hard to endure the situation but once you get pass through it, you will become a better person if you handled it right.

When something bad happens, you have three choices.

  • You can let it define you,
  • Let it destroy you
  • or You can let it strengthen you.

Choose the last choice because,

Once this is finished you will be a better person because the situation has moved you out of your comfort zone and allowed you to grow and learn from it.

Wrap Up

Emergencies do really happen once in a while, our lives can never be risk-free from these emergencies but it can be risk-proof if we have prepared well and planned our finances. Having an emergency fund will protect you from certain emergencies and insurances can help you protect yourself and your family.

These tools actually help you to live more of your life and pursue your happiness when you have them.

I hope that this post made you aware of the importance of a buffer fund. Having an emergency without it would really force you to get out of your comfort zone and dry up your resources. Don’t wait for it to happen to you because it’s really hard.

Let me hear what you think of this post in the comments section!

Do subscribe as well to my blog The frugal worker by entering you email below this post for you to get updates from my blog. You can also find me on facebook @thefrugalworker



5 common financial sicknesses you shouldn’t have pt. 2

This is the continuation of the 5 common financial sicknesses you shouldn’t have. If you haven’t read it yet, you can read it here.

For a quick summary of the first part, I have shared in that post the first 3 of the 5 common financial sicknesses that if not realized or acted upon may get you in a financial crisis. Here are they:

  1. The keeping up syndrome – it’s the tendency to keep up with the lifestyle of your friends even if it doesn’t align with your financial health. Symptom is peer pressure, you don’t want to miss out the fun they’ll be having or you wanted to be “in” thru things they do/have.
  2. Stuffititis – it’s the tendency to think that you “need” things even if you really don’t. Symptoms are lavish spending, owning a lot of things, holding too much on material things, discontent.
  3. Upgradingitis – it’s the tendency to upgrade your things frequently. Symptom is always wanting the latest things, believes in a the phrase “if it’s not the latest, it’s not the best”.

Okay so let us continue.

4. Nownarism

This is a common financial sickness to us young professionals. I got the word from two words which is “now na” that means “right now”. We always wanted it “right now” or what’s “instant” and only a few would go for the extra mile. We are impulsive and we don’t usually delay gratification.

The best example I could think of is when we have a promotion or when our salaries are being raised. Most of us would think that having a higher salary would mean an instant increase in our lifestyle.

For example you are living in a dorm before, now that your salary have increased you now instantly want to go and rent for a room(more costly), simultaneously you also wanted  a better laptop or a phone. Before, you do your laundry, now you just pay for them. Before you only ride the jeep/bus home, now you’re a frequent uber rider.

And the likes.

Yes you can afford it and yes you can do it but what if an emergency happen? Let say you lost your job (knock on wood). How do you cope up with your new lifestlyle?  You’re lucky if you would get a new job with the same or a higher pay but what if you don’t? Can you deal getting back to your old lifestyle? It is hard right?

We always wanted to have a great life and that’s a great thing to pursue but we can’t control emergencies and sometimes they can be very damaging to our finances. If you have this “Nownarism” and your cashflow is just breakeven without an emergency fund or liquid resources, it will be hard to bounce back.

The secret for dealing this sickness? It’s simply the opposite of it which is delaying gratification. Like what the Bible says,

 “There is a time for everything, and a season for every activity under the heavens

Ecclesiastes 3

Get rid of your Nownarism if you have it because there is a time for everything. Once you complete your emergency fund, protected yourself and created that habit of saving for your future, it would be easier to upgrade your lifestyle and it will just happen naturally.

Nownarism exposes you more to risks while delaying gratification minimizes your risks of a financial disaster.


Ignorance is a lot different from innocence. Ignorant people knows the right thing to do and they know it full well but don’t do it. While innocent people don’t have any clue(they need to be informed). In personal finance, to be effective is being able to do what’s necessary and apply the things learned in managing one’s finances. Ignorance is a financial sickness common to people who think that they will turn out fine even if they ignore things they know that can help them be better in their finances.

For example is tax planning. Did you know that tax planning has a great impact on one’s finances? There are ways on how to legally lower our taxes and lawyers and law firms who know how to do these things earn a lot from it. Imagine if you could do it yourself because you know some strategies on how to lower your taxes instead of paying a lawyer for advice.

Would it save you a lot? The answer is yes and the right thing to do is research about it or attend a seminar about tax planning but somehow people still ignore it. Don’t be like them, it may cost you to learn but it can be a lot costly for you to just give your hard earned money to taxes(you can minimize)

Personally, the idea of tax planning is new to me and it is quite interesting. I can’t  share strategies yet because I’m not yet familiar with them but I’m sure that I’m not ignoring it.

Often times, the most difficult things to do are the right things to do.

Let me know what you think in the comments section.

Wrap up

I hope that this blog of mine is being of help to you. I hope you don’t ignore having the benefit of learning personal finance here on my site and btw it’s free! For you to get regular updates from me you can simply subscribe by entering your email below this post. Please do share this article as well in your facebook/twitter. You can always find me on fb @thefrugalworker

see you on the next post! 🙂

Photo credits : 401(K) 2012


5 common financial sicknesses you shouldn’t have pt. 1

Most health sicknesses have symptoms like coughs, colds, headaches, fever, vomiting and tummy-aches. When these symptoms show, we go to the doctor and consult with them for us to know what’s wrong so that we can prevent it from getting worse.

This is the typical scenario when we get sick. How about when being financially sick? Shouldn’t we consult someone as well when we see symptoms of financial sicknesses before it gets worse?

Well, the problem maybe is that we don’t know the symptoms and we think that we are doing okay, where in reality we are financially sick and there is a financial disaster just waiting to happen.

So before that disaster gets in the picture I want to share these 5 common financial sicknesses that you might be having already and I hope that this will help you identify them for you to get away from them and be financially fit.

1. The “keeping up”  syndrome

Do you remember a time when you have traveled with friends and enjoyed it? After a month, one of them invites you to another trip along with the crew but you have spent already your money from the last trip and you’re still saving for the next one.

Since you don’t want to miss out the fun they’ll be having and you don’t want them to think you are a killjoy, you ended up borrowing money just to join them.

If you did experience this, you are just one of the many young professionals that are suffering from this syndrome. This doesn’t only apply  to travelling but also with a lot of things and the main driver of this is peer pressure.

That’s how this syndrome works and the symptom of this is peer pressure. Most of the times, we don’t see it coming and only realize it when we can’t keep up with them anymore.

People get this sickness because most of them don’t feel secured

People buy things they don’t need with money they don’t have to impress people they don’t like

-Dave Ramsey

It is quite unfortunate because a lot of people still get caught with credit card debts because of this sickness just because they don’t feel secure/significant if they cannot keep up with their friends.

Remember, your real friends will accept you for who you are even if you don’t do what they do and even if you can’t keep up with their lifestyle. If they can’t? They aren’t your real friends.

We are unique in every way and there is no way that you will have the same exact financial circumstance as others. If we keep up with a lifestyle that doesn’t align with our financial status then we will come up with the disaster.

The next time you feel the peer pressure and it forces you to spend your hard earned money, remind yourself that you are secured even if you don’t spend on them. It would be better to miss out the fun rather than missing your bills. Besides, you can still have fun and do it later if you have saved enough right?


This is a condition where someone has a mentality to own material things even if he doesn’t need them. He “thinks” that he needs those things but in reality he doesn’t, he will only be using them for a while and then after that season, he’ll just put it in his house and buy other things.

This disease is the “love for stuffs”, people who are suffering from this tend to buy expensive cars, houses, jewelries, clothes, shoes, and unnecessary gadgets, throws out big parties, lavishly travels and everything that you can think of that the world can offer.

The saddest part about it? They mostly do it on credit! Never fall for this disease because this worsens as long as you feed it and it may come to a point that it would be hard to get out of it.


Contentment is not the fulfillment of what you want, but the realization of how much you already have.


People think that having a lot of stuffs makes them rich well in fact it doesn’t. Having a lot of stuff will only produce more stress and things to maintain that will cost time, money and effort.

We have to realize that God has provided everything for us and He provides for every need that we have if we want to overcome this disease.

Never put your satisfaction or contentment on the things that can be provided but put them on the provider, ‘your’ provider who is God.


Upgrading our things is not destructive, actually, it is constructive if our reason to do it is to be more productive. Upgrading makes our lives easier because of the benefits in the advancement of technology.

Before, our phones can only make calls and texts. Today, a smartphone can make calls and texts and also do a lot of things with the touch of your fingertips. It made our lives more productive in a significant way (yes that’s true). But it also made us think that upgrading or having the newest ‘thing’ would make our lives more easier and comfortable.

Every year, Apple releases a new iphone and if you would notice, the upgrade is not that really significant, but why do people buy year after year even if they have the latter model which is still functioning well? I would understand if they buy because their old units are getting defective or it’s their first time to buy but buying just for the sake of upgrading? It doesn’t sound practical and it costs a lot of money.

Some might be selling their old units to buy the latest ones so that it won’t cost them much but remember that things depreciate in value and they depreciate on a fast rate.

People who suffer from upgradingitis has a motto:

If it is not the latest, it is not the best.

A lot of young professionals somehow believes in this motto and it’s saddening because most of them get into debts because of this.

Don’t be like them. If you are having this sickness right now, review your costs on your frequent upgrades, if you think they are really worth your money (considering you’re using credit), I’d respect that but if not then you don’t need to do it again (especially if you’re putting it on credit).

My take on upgrading things?

Be practical, never upgrade unless it is a game changer and don’t believe the motto above, that’s not true.

Wrap up

These sicknesses I mentioned above are very costly. If you have money for it, good for you but believe that at some point it has to be stopped because it won’t make you truly happy. How can I say? because I’ve experienced them, I’m just blessed to realized them early but most of our friends might not realized it yet. Feel free to share it on your facebook/twitter, It might help someone before they end up in a financial disaster.

I’ve made this article a two-part post because it would be too lengthy for a single post. This only ends the part 1 of the 5 financial sicknesses you shouldn’t have

If you think that this is helpful to you, please do subscribe to my blog by entering your email below this post and so that you will be updated on the part 2 of this article. Don’t worry your details are safe and it will only be used for updating you when there is a new post.

, you can find me on FB @thefrugalworker

Happy Monday! 🙂

Photo Credits : NVinacco


A simple guide to avoid getting into a bad financial situation

Bad money behaviors are most likely the cause of getting a person into a bad financial situation but it can vary from person to person and from case to case. I believe everyone of us doesn’t want to get in that situation but still, many of us end up getting in there.

Let me share to you this guide for you to avoid it.

First of all, we must know that there are things that are beyond our control that can get us into a bad financial situation such as accidents, emergencies, sickness, theft, acts of nature and etc. But there are also things that are within our control such as our cashflows, money behaviors(especially in spending), and knowledge about money.

There are two kinds of people when it comes to personal finance, the active and the passive type.

Passive Type of people are the ones who are not aware of where they really are in their financial lives. That is the reason why they only act when the financial problem is already there(retroactive).

While Active Type of people are somewhat just the opposite, they know where they are in their financial lives, actively monitors it to make better decisions, project their financial goals to meet it and protects themselves in case of anything that could happen(proactive)

So right now ask yourself, which of the two types do you belong?

If you want to belong on the active type of people regarding their finances then here’s the meat of this article.

Let’s tackle first the things that are within our control

1.Be Aware of your Cashflows

A cashflow represents the money that comes in and out of our pockets on a monthly basis. I assure you that most of us are unaware of this. Often times, we are only aware of the incoming cash that will go in our bank accounts but not the outgoing cash from our wallets. We don’t usually keep a tab of our spending, and that is the reason why most of us gets confused of where did our money go that results of getting us in a bad financial situation. To be the active type we first need to be aware of this because this is our starting point.

Here is an example of a cashflow (zoom in to see a clearer view)

[embeddoc url=”” height=”300px” download=”all” viewer=”google”]

This is an actual cashflow of a manager, based on his cashflows, he is currently in a negative, meaning, he spends more than what he receives from his salary. People might say that he’s fine because he has a car, he has a house, he has a big salary and everything but in reality he’s in a bad situation. Sooner or later he’ll end up selling things if he continues to live like that.

I encourage you to make your own cashflows or download the excel file above(as a template) and see where you are currently in. Just remember you have to list everything you spend(as in everything).

Net Cashflow = Income – Expenses

If yours is a negative as well, don’t worry this is the reason of this step. Now that you are aware of your situation I believe that you must act on it before it gets to you. Try to get rid of the unnecessary stuffs or get rid of debts as soon as possible. The goal is for you to find a way on how to make that a positive net cashflow.

If yours turn out positive then congratulations because you are one step ahead of those who have a negative net cashflow.


2.Assess your money bahaviors and change when necessary

All of us have financial goals in life and the distance from where we are right now to those goals are greatly affected by our money behaviors. These money behaviors are behaviors we got from our family, friends, relatives and influences. Often times these are hard to change behaviors but we have to assess it and if necessary, we have to change it.

Saving and spending are both money bahaviors but which force is stronger in you? You may have a positive net cashflow but if you are a big spender, you have just missed the opportunity to save more for more important things.

Monitoring your spending on a daily basis vs on a monthly basis? These are behaviors as well. The first one is a drag but it has more benefits than monitoring monthly. With daily monitoring, you have more control on your spending than on a monthly basis. If you do it monthly, there is a high chance that you might have thought you’re still within you’re budget but actually overspent already.

There are lots money behaviors and we have to know them so that we can make better decisions.

Here are  some of what I wrote about

Pasalubong : An overlooked expense

The Frugal Worker : Travel or Invest?

3 must ask questions before buying anything on payday

young professional

3.Expand your knowledge in regards with managing your finances

An investment on knowledge pays the best interests

Benjamin Franklin                      

When it comes to money , the more informed you are the lesser you fear. Let say for investments, the more knowledgeable you are with investments, the more confident you are with investing. For different financial products, the more you know about these products the higher the chance you are to make a good decision in choosing. In business, the more know about your customers, the more you will likely make a profit.

Simply, the more you know about your finances, the lesser the chances you’ll get into a bad financial situation.

Be hungry for knowledge and try your best to apply it because it pays when you do.

Now let’s tackle on the things that aren’t within our control

Emergencies, Accidents, Sickness, Theft, Acts of Nature and etc.

You can’t control these events, you don’t know when they will happen, and you don’t know how much damage they could bring to you financially. They aren’t most likely to happen but if they do, the only thing you can do is to prepare.

These things might come once or twice in our lives or might not as well. But it’s always better to be prepared than not.

Start building your emergency fund, protect yourself with insurance(research and find the best one that will suit you) and stay healthy.

Lastly and most importantly, let God lead you. Even if things are still in your control, ask for wisdom and understanding, ask for protection.


We are hard-pressed on every side, yet not crushed; we are perplexed, but not in despair; persecuted, but not forsaken; struck down, but not destroyed.

2 Corinthians 4:8-9

When things get out of control, remember that God is bigger than the bad situation, you will bounce from it.

Wrap up

If this simple guide have helped you and have taught you something please do share it on your facebook, there might be someone out there who needs it. Let me know what you think about this guide as well in the comments section below. If you have questions or you want me to research anything about personal finance just drop by in my contact page and I’ll try to to write something about it and if you want to read more of these stuff, please do subscribe to my blog by entering your email address below.

See you on the next post! 🙂 @thefrugalworker

Photo Credits : marco antonio torresMarc Wathieu, mer chau

5 breakups you have to do as a young professional

Breakups are sad and we often don’t want it to happen until it will come to a point that we should just let go because there are things beyond today that will be greater than what it is right now. Breakups will mold us, it will teach us and will make us stronger. That is why today I would like to share with you 5 breakups I did that made me better for my future.

1. Breakup with your parents.

Financially speaking, as young professionals we should breakup with our parents support. You see, we love our parents and they love us too but that doesn’t mean they should support us financially our whole lives. They have to save for their golden years as well!

Now that we are earning and having our own money, breaking up with them will teach us to be more independent, be more responsible and be matured enough to manage our financial lives.

breakup with parents

Yes, we make mistakes, and that is okay! What is not okay is relying on them when our mistakes takes the toll on us. Remember that parents aren’t an emergency fund(while parents should not treat their children as retirement fund too).

Let them support you with love and guidance(not financially). Rather, be a blessing to your parents by serving them. Our parents have served us for so long and now that we have the capacity to earn, it’s now our turn to bless them.

2. Breakup with your unnecessary spending habits.


Eating out too often? Spending much on lattes? Drinking often with your pals? Those night outs and subsequent use of Uber and Grabcar ride home? Well, the key here would be moderation, it doesn’t mean you can afford it means you have to do it all the time. If you find yourself doing them all the time and it gets tight on that wallet then breaking up with these won’t kill you, trust me it’ll make your life easier.

Avoid overspending and get a hold of your money!

3. Breakup with your credit cards.

I was eating with my boss in a fine dining restaurant and we had our company card with us, after eating we ask for the bill and my boss hands out his card to pay, the waiter told us that using the card would charge us an additional 3% on top of the bill.

Wow! Some daylight robbery eh? Our bill was around 2,500 pesos and the additional charge was 75 pesos! If we just paid in cash, then there would be no extra charge.

I guess here’s what I’ve learned from what happened. People won’t care unless it’s personal. We are using a company card and I guess that is why it was so easy for us to just use the card and never mind the additional charge of 75 pesos but personally if that was my bill? I would have paid in cash.

cut credit card

Having a credit card let’s you spend other people’s money that is why it’s so easy to swipe that card.

Banks will tell you that you could pay only the interest if your tight and you could still use your card, unconsciously you’ve been digging up a deep hole to bury yourself with bigger debts if you continue doing it. Some credits cards have a 3% monthly interests if you don’t pay and that means 36% interests a year! Yikes!

Break up with your credit cards and get a prepaid debit card! The Visa debit card or other cards that are connected to your bank account gives you the ability to do virtually anything a credit card will do. They can also be used in store purchases if you are afraid to handle cash in you wallet. Using debit cards only means that you are in charge of your finances and you only use your own money!

*If you don’t have one, then don’t dream of having one! Don’t take the risks, you’ll just frustrate yourself. Debit cards are fine.

4. Breakup with your Y.O.L.O attitude.

As a young professional, I guess we all have that YOLO attitude or Bahala na si Batman kind of thing.

Enjoy life! Forget the risks because you only live once! Travel more! Give in! Bahala na si Batman!

You might have heard of this in your head already and believed it so much because you have seen people who have risked everything and still managed to become successful. Well, truth is not all of the people who risks everything do succeed, for me it will always be a life of  balance. Yes, we only live once and that is why life is so precious. As the quote says

Plan you life as if you would live forever and live you life as if you would die tomorrow.


Our YOLO attitude only focuses on the 2nd phrase, and that is to live our lives as if we would die tomorrow where we forgot the 1st phrase, which is far more important. It wasn’t said in the quote first without a reason. Don’t get attached too much with the YOLO attitude and be a mastermind planner FIRST!

As early as now list your goals in life, what you want to achieve, when you want to achieve them and then plan on how you would achieve them, PLAN first because you only live once!

5. Breakup with your Status Ego.

I’ve learned to become frugal by breaking up with this one. We all have that peer pressure, not only with friends or colleagues but sometimes or often times even also in our own families. People wants to be accepted, we want to feel that we are accepted, and a lot of us still think that stuffs will get us that status. I like what the Indian Actor Rajinikanth said,

Whether you have a Maruti or a BMW, the road remains the same. Whether you travel economy class or business class, your destination doesn’t change. Whether you have a Titan or a Rolex, the time is the same. Whether you have Apple, Samsung or Lava, people who call you remains the same…..


You may have all the luxuries in life but your identity remains the same. You are accepted for who you are, not for what you have(well in some cases, some people are just really after for what you own). Buying things wont give you class, your values will. Breakup with your status ego and start nurturing your character. It will be the foundation of your success in the future, not things.

I hope that you will find joy and happiness with these breakups because I did! Just like what Elsa said ‘Let it go!’. If you find this article helpful to you and want more, do subscribe to my blog by entering your email below this post.

You can also find me on facebook @thefrugalworker

Photo Credits : West PointAlessandro BaffaRaymond Gilfordprof. BizzarroCraig AllenMadhan Kumar


How to save and budget money wisely over time

Do you find it hard to save money? or nakakapagsave ka naman pero pa tsamba tsamba lang, yung tipong pag may natira lang sa sweldo mo? nahihirapan ka din bang paabutin sa next cutoff yung income mo?

In this post i want to share to you what i’ve learned in saving and budgeting money..

Continue reading How to save and budget money wisely over time