When 2008 started, I made a list of my objectives that should be accomplished before the year ends.  I read them often to remind me of the things I should prioritize.  Here are some of them:

1. Fully pay MYDREAM JCB card by April
2. Fully pay HSBC Mabuhay Miles Card by June 
3. Fully pay Citibank Cash Back Visa by May
4. Fully pay Metrobank Mastercard by December
5. Save P3,000.00 every month

Among the  5 objectives listed above, the first four were already achieved.  I was kinda having a hard time with the last objective since I prioritize paying my credit cards first to minimize interests payments.  After paying the whole balance, I terminated the cards.  I only have 2 credit cards left right now, BPI Express Credit and Citibank Clear Visa.

My financial objectives were mostly debt reduction for this year.  Next year, I will be concentrating more on savings and investment.

I have 3 kids and I have a nanny for my 1 year old daughter Ysa.  I used to have another nanny for our 2 year old son Ythan but she left last month and we decided not to get another one.  Since I am really not that busy, I am the one taking care of our son.  I just realized that there are hidden costs of getting a nanny aside from the salary you are paying for the service.

1.  FOOD
When you have a nanny, your food budget will be affected because she is living with you and you should nourish her.

2.  ELECTRICITY
The nanny has her own room.  She uses the light, the electric fan, and the television.  Some will even buy cassette for their room to listen to at night.

3.  WATER
She takes a bath and washes her clothes. 

4.  SOCIAL SECURITY and PHILHEALTH
You are required by law to provide SSS and PHILHEALTH coverage for the nanny. (correct me if I'm wrong)

So, aside from the P2,000 that I am paying for the salary, it would cost me an additional of about P2,000 for the hidden expenses I describe above.  That would be P4,000 additional expense a month or P 48,000 a year if I get another nanny.  That is already a big amount that I can add to our savings. 

How about you?  Do you know some hidden cost of getting a nanny that I was not able to discuss?

  The envelope method is one way of budgeting your money.  Here how it is done:

Write down categories or labels of your monthly expenses on the back of the envelope and the corresponding amount:

FOOD (the money on this envelope will be used for the grocery and other food related expenses)

UTILITIES (electricity, telephone, water, cable, internet payments)

CREDIT CARD PAYMENTS

AMORTIZATION (house and car, if you have any)

TUITION AND ALLOWANCE

ENTERTAINMENT (watching movies, bar hopping, shopping)

GAS AND TRANSPORTATION ( fuel and transportation expenses)

and some other expenses that you have.  But try to limit your envelopes to 7 or maximum of 10.  You don't want to be carrying a lot of envelopes.  When you receive your salary, try to set aside first the amount for your SAVINGS.  Then allocate the remaining money on the envelopes that you have.  Just be sure that you stick to your budget.  If you find out that there is not enough money left for ENTERTAINMENT purposes, don't get money from the GAS and TRANSPORTATION envelope.  I know this is difficult but if you are serious in achieving financial freedom, sticking to your budget is the first step towards it.

Farming is an alternative if you want additional income.  We have a neighbor who has a 1 hectare vacant lot and we decided to plant squash on it.  We will pay for the seedlings while the land owner's contribution will be the land itself and the plowing of land.  He will also check the crop from time to time.

Listed below is a summary of our business venture:

Inputs:
1.  plowing of land (free of charge because the land owner has his own cow).  But others will charge P1,500 per hectare
2.  2 cans surprema (squash seeds)  P 2,300.00
3.  1 can karate (insecticide) P 140.00
4.  For fertilizer, we use used rice hull (free of charge because we are near poultry farms)
5.  Labor for planting (free because the land owner planted it himself)

Harvest:
1st:  2,533 kilos at P 8 per kilo (3 months after planting)
2nd:  3,947 kilos at P 9 per kilo, 60 kilos (reject) at P 2.50 per kilo (2 weeks after the 1st harvest)
3rd: 960 kilos at P 8 per kilo, 162 kilos (small) at P 4 per kilo (2 weeks after the 2nd harvest)

Total income:  P 64,265.00 divided by 2 = P 32,132.50 less P 2,440 for the inputs.
NET INCOME: P 29,692.50.

We did not pay for the delivery of the squash because the dealer usually picks up the items from our area.  The price of the squash is not stable.  You are already lucky if it reach P6.00 per kilo.  There are times that the price per kilo is only P3.00.

Christmas is fast approaching and I still don't have my Christmas gift list. My top priority is of course my hubby and my children. Then my mom and my siblings. Then my in-laws and nephew. Then the house helpers. The list just go on and on. I don't give expensive gifts. I am more of a practical gift giver. I give something that can be used everyday rather than something that will only accumulate dust on the corner.

Here are some of my gift ideas:

Clothes (be sure it's the right fit)
Utensils
Personalized mugs and towels
Feeding bottles (if the receiver is pregnant)
Hair accessories
Pencil case (for young students)
Wall clock
Swiss knife
Wallet, Pouch, Bag
Photo Album
Umbrella
Cellphone (if you can afford one)
Money

How about you? Do you already have your Christmas gift list?

My mother is a kapampangan and she is a great cook. I don't know if it's true that kapampangans are good in cooking. But in my mom's case, it is true. This special talent of her was used months after my father died. She opened a small carenderia/eatery at Dona Segunda Complex. We have some money left at that time so she was able to buy the necessary equipment to start an eatery. She would wake up early every morning and cook viands to be sold and she will set aside something for our breakfast. Then she would left the house by 9:00am to open the stall. Sometimes she will cook new dishes for lunch at the eatery. She hired someone to help her out but she is still the one doing the chores like cooking, serving, and washing the dishes. Most of her customers were students from Interface Computer College, a school just above her stall and some sales clerks on the garment stalls nearby. But that business only lasted for about 3 months or so. The income was not that good because the competition is tight and there was no customer loyalty. She was spending more on the ingredients than the money she is making for serving them.

Lesson: Technical skill is just one thing, management skill is also another. Not because you are good at something, it does not necessarily mean you are going to succeed on it.

  My father has a dry goods business.  But one time, he tried to engage in a small scale money lending.  Small scale because the maximum amount he allowed to be loan is P2,000.  His client were mostly supermarket vendors.  Here is the business system.  Every 3 pm, the store clerk that was assigned to my dad's money lending transaction would leave the store and proceed to the vendors.  She will bring some cash and ledgers.  The next morning, she would then have the names of the borrowers and the amount they borrowed.  Collection was done everyday.  No credit investigation and no further verification about the borrowers background.  This went on for about how many months.  Many loan releases but minimal collection.  The store manager then started to question the clerk who is doing the lending transaction.  She explained that she can no longer locate some of the vendors that is why their is minimal collection.  This was investigated and it turns out nobody knows anybody.  It looks like the names were just fabricated.  And the money?  Charge to experience and considered as losses.

Lesson: Before you engage in any business, be sure to establish a system that will protect your investment.

When I was a kid, I am very fond of keeping piggy banks.  I would fill it up with any coin that is left with my allowance.  Until now, I am still keeping a piggy bank.  But I only use P5.00 and P10.00 coin because they are easier to count.  About two months ago, I really wanted to buy the globe visibility prepaid kit that costs P4,500 (USD 90.00).  I don't have that much money at that time.  So I opened my piggy bank and surprisingly, the coins totaled to P5,500.  That was about 8 months of dropping every P5 and P10 coins that I have.  So I was able to buy the globe visibility kit using my piggy bank money.  And I am starting to fill it with coins again.  Maybe next year it will be used in buying another item.  This is the best example of the Filipino saying, "Kapag may isinuksok, may madudukot".  Translation:  If there's a will, there's a way.  Just kidding.  I think what that Filipino phrase mean is "save for the rainy days" or something like that.  What do you think?

My mother used to run a sari sari store. It's the easiest business to start yet some don't really succeed. You know why? MISMANAGEMENT. The start up stocks of my mother was purchased using my credit card. I told them that they will just pay me when they already have the money. I have four siblings and all of them are still studying at that time and my mom does not have a work. So there is no other income coming in. By the way, I'm already married with 3 kids. Anyways, the store sales were okay. The problem is, they use the money for my brothers and sisters school allowance and transportation expense. If they no longer have food, they get from the store without paying for it. The store was just like their extended pantry and stock room. By the end of the month, there were no longer items to be sold and no money to buy new stocks. They tried to ask me for another capital. But I told them that it won't make any difference because they will still do the same thing. I told them that they should not touch the store's earnings if they still want to continue the business. Or they can just get a portion of the proceeds but not everything because they need to replenish their stocks. Well, I can't blame them for doing those things. They have no other source of income.

Food is one of our major expense. And I noticed that if I don't plan out our meals, I tend to cook a lot of food that only ends up in the garbage can. So I created this weekly meal planner and it serves as my guide on making my grocery list. By doing this, I can avoid purchasing unnecessary items and concentrate on what is only needed for that particular week. As you can see, I also allocated one dinner for eating out because we usually go out during Sundays. And when you are preparing your own meal planner, do it with your family so that they can suggest what they want to eat on that particular time of the day.