Ways to be debt free: Why do you need to write down your expenses

source: http://archive.dyestatcal.com/?pg=dyestatcal-2009-Cross-Country--Road-to-State

I would like to expound a little about writing your expenses by my story.

source: http://phcommute.multiply.com/journal

I just graduated college, reviewed for the CPA board exam, took it and failed. At first it was not that an issue but it came to me I am already a college graduate and I am not already the responsibility of my parents; I should be on my own now. So just like the rest of my classmates in college who failed we all started looking for jobs to make a statement. I applied here and there until I finally landed an accounting staff job at Robinsons Supermarket Inc. Head Office in Eastwood Libis, Quezon City.

source: http://www.wix.com/jacinthtravel/tours

It was convenient. I live in Project 3 and the jeepney ride to Kalantiaw in Project 4 was near and from there another jeepney ride going to Eastwood. And so I started working and also started reviewing in the weekends. I am out of the house from Monday to Sunday. And you know what, if you are out there you spend. My salary was at starting which was around Php 8,200.00 only. It was truly a dip into the real life.

Back then I was able to read Bo Sanchez's book Simplify and Live a Good life. There I found the idea of writing down one's expenses to the detail. Funny it was I was an accounting student and now working as an accounting staff doing record entry for a company making sure I balance my records to the centavo and yet I don't balance my own expenses.  

Back then the Starbucks Planner was a hit and I am one of those who makes sure when I can afford a Starbucks coffee my booklet get stamped. I got one after some months or a year and that planner ended up a expense book. My sister laughs at me because I made a supposed to be diary a record book. You will see in every page what I spent on that day the moment I step out of the house till my eyes closed at night.

source:http://www.thirstyblogger.com

I learned that there are expenses that are really indispensable and there are some that are unnecessary. In order to save you cut on the unnecessary and manage the indispensable. With that I finally realized I am already starting to have a savings. From there I was able to have an idea how much money I am saving and how can I manage my expenses. 

Then I took the exam again but got conditional this time. Transferred to a job with a better time frame and self studied. Took the exam and at last I passed. I searched a job requires a CPA and landed in Orica Philippines. from there and nearly working for 4 years I was able to save up about Php 60,000.00. This savings is now invested at a variable fund at PhilamLife. 

What lessons did I learn from writing down my expenses?

1. It strengthened my discipline. It made me able to follow the goals I

    set because I can see right in front of me what is going on.

2. I learned that if you focus on something nothing is impossible.

3. It is not a matter of time management, it is more of how well you

    pick your choices.

4. Sometimes you just cant believe where your paycheck go but if you

    write it down you will know.

5. People will annoy you not because you can't go with them for a bar

   session(and because I don't drink and smoke, I only drink coffee) but

   because they envy me having savings at an early age and while still

  a bachelor.

How to start investing even if you have a small salary

source:http://fasttrackhomeowner.org/

Many of us back in the Philippines might be shock if you told them that you are investing in stocks.

Most people think that you need lots of money to start investing. Let say maybe in their head the minimum is Php 250,000. But in reality its not the amount that makes investing hard, it's the discipline to put aside money for investing. Just like in my previous post the question is how much money do you have now?

So how will you start investing even if you don't have that much? I have a motto before that I always read when doing something. It goes like this "Start small, Think BIG!" In reality everything starts small. Maybe you saved 20 pesos last week or maybe you got a bonus this year of let say 5000 pesos. Are those amount big?Yup your right it's small. But if you really save this amount instead of planning to spend it by buying a new phone or buying a new pair of pants in the long run it will accumulate. 

Try to re-examine your spending. What are expenses that in  reality are not needed. You only get to spend because maybe your friends  has this coffee after work habit, or maybe you have conditioned your stomach to eat a burger before going home because of the traffic in Pasig. Try to see were your money goes and you'll realize you have been a spender. From there little by little cut it down and shift it to savings. In a short span of time you would have save money enough to open an account at an online stock broker. 

Another thing is you must have the discipline in investing. One effective way is to look at investing as one of your bills. I believe your paying something right now right?Maybe you borrowed money for your car or your house or it so happens that you overused your credit card ending into a credit card debt. And every paycheck you have always made sure that you pay at least the minimum payment in order to avoid penalties right? Why not think of investing like that only in a positive way. 

They call this concept paying yourself first. Here is what you do. Before paying any of those bills and before thinking where will you spend your paycheck first think of an amount to put in your savings that will be invested maybe weekly or monthly. Think of this amount as payment to yourself, a treat. Make sure that when you segregate this amount you will not think of it anymore or maybe think in the back of your mind that in case you got short you can pull this out. Remember this is your treat to yourself so don't touch.

When you have reached a certain amount that you have set to invest go ahead and invest it. Buy the best stocks. Remember as well the concept of cost averaging. The stock might be high but there are times that the price is low does buying on a regular basis will lower your average cost and when the price is right, again remember to compute if you are more than break even, you can sell your stock at a profit. 

Remember to pay yourself first, accumulate, invest regularly to  lower average cost, and take profits when the price is right.

How to start investing even if you have a small salary

source:http://fasttrackhomeowner.org/

Many of us back in the Philippines might be shock if you told them that you are investing in stocks.

Most people think that you need lots of money to start investing. Let say maybe in their head the minimum is Php 250,000. But in reality its not the amount that makes investing hard, it's the discipline to put aside money for investing. Just like in my previous post the question is how much money do you have now?

So how will you start investing even if you don't have that much? I have a motto before that I always read when doing something. It goes like this "Start small, Think BIG!" In reality everything starts small. Maybe you saved 20 pesos last week or maybe you got a bonus this year of let say 5000 pesos. Are those amount big?Yup your right it's small. But if you really save this amount instead of planning to spend it by buying a new phone or buying a new pair of pants in the long run it will accumulate. 

Try to re-examine your spending. What are expenses that in  reality are not needed. You only get to spend because maybe your friends  has this coffee after work habit, or maybe you have conditioned your stomach to eat a burger before going home because of the traffic in Pasig. Try to see were your money goes and you'll realize you have been a spender. From there little by little cut it down and shift it to savings. In a short span of time you would have save money enough to open an account at an online stock broker. 

Another thing is you must have the discipline in investing. One effective way is to look at investing as one of your bills. I believe your paying something right now right?Maybe you borrowed money for your car or your house or it so happens that you overused your credit card ending into a credit card debt. And every paycheck you have always made sure that you pay at least the minimum payment in order to avoid penalties right? Why not think of investing like that only in a positive way. 

They call this concept paying yourself first. Here is what you do. Before paying any of those bills and before thinking where will you spend your paycheck first think of an amount to put in your savings that will be invested maybe weekly or monthly. Think of this amount as payment to yourself, a treat. Make sure that when you segregate this amount you will not think of it anymore or maybe think in the back of your mind that in case you got short you can pull this out. Remember this is your treat to yourself so don't touch.

When you have reached a certain amount that you have set to invest go ahead and invest it. Buy the best stocks. Remember as well the concept of cost averaging. The stock might be high but there are times that the price is low does buying on a regular basis will lower your average cost and when the price is right, again remember to compute if you are more than break even, you can sell your stock at a profit. 

Remember to pay yourself first, accumulate, invest regularly to  lower average cost, and take profits when the price is right.

How to start investing even if you have a small salary

source:http://fasttrackhomeowner.org/

Many of us back in the Philippines might be shock if you told them that you are investing in stocks.

Most people think that you need lots of money to start investing. Let say maybe in their head the minimum is Php 250,000. But in reality its not the amount that makes investing hard, it's the discipline to put aside money for investing. Just like in my previous post the question is how much money do you have now?

So how will you start investing even if you don't have that much? I have a motto before that I always read when doing something. It goes like this "Start small, Think BIG!" In reality everything starts small. Maybe you saved 20 pesos last week or maybe you got a bonus this year of let say 5000 pesos. Are those amount big?Yup your right it's small. But if you really save this amount instead of planning to spend it by buying a new phone or buying a new pair of pants in the long run it will accumulate. 

Try to re-examine your spending. What are expenses that in  reality are not needed. You only get to spend because maybe your friends  has this coffee after work habit, or maybe you have conditioned your stomach to eat a burger before going home because of the traffic in Pasig. Try to see were your money goes and you'll realize you have been a spender. From there little by little cut it down and shift it to savings. In a short span of time you would have save money enough to open an account at an online stock broker. 

Another thing is you must have the discipline in investing. One effective way is to look at investing as one of your bills. I believe your paying something right now right?Maybe you borrowed money for your car or your house or it so happens that you overused your credit card ending into a credit card debt. And every paycheck you have always made sure that you pay at least the minimum payment in order to avoid penalties right? Why not think of investing like that only in a positive way. 

They call this concept paying yourself first. Here is what you do. Before paying any of those bills and before thinking where will you spend your paycheck first think of an amount to put in your savings that will be invested maybe weekly or monthly. Think of this amount as payment to yourself, a treat. Make sure that when you segregate this amount you will not think of it anymore or maybe think in the back of your mind that in case you got short you can pull this out. Remember this is your treat to yourself so don't touch.

When you have reached a certain amount that you have set to invest go ahead and invest it. Buy the best stocks. Remember as well the concept of cost averaging. The stock might be high but there are times that the price is low does buying on a regular basis will lower your average cost and when the price is right, again remember to compute if you are more than break even, you can sell your stock at a profit. 

Remember to pay yourself first, accumulate, invest regularly to  lower average cost, and take profits when the price is right.

Accounting 101: Some thoughts on Break Even

The term is use to signify something about a business's Profit & Loss(click here to know more about Profit & Loss).

Break even is that level in which a business's, for example a karinderia, profit is just equal to its expenses. When I say profit that means selling price minus the cost of the thing you sold and by expenses I mean the cash out for expenses to run the karinderia like rent, salary of your cook and washer(if you hire one), cost of gas, electricity, and other expenses that you have to pay for to run your business.

Why is this important?This one is important when you are running a business because this will be the number that will tell you of you are earning or just losing in running the business. In simple terms you must surpass this amount in order to say that your business is an earning business.

In order to get an idea for this number or figure one must make an accurate assumption of what will your business sell and expend for a considerable span of time. In our case, the karenderia operates on a daily basis and its best to get a daily break even point to determine if it is worthed to stay in the karenderia business. 

The formula to get this number is shown below:

Break even = Operating cost divided by Contribution margin

Where:

Operating cost is your total expenses to operate the business
Contribution Margin is the percentage of profit on top of your item sold
                    which is (Sales - cost of item sold) divided by Sales

For example if your karenderia needs Php 5,500 to operate selling a complete meal(that is one meat, one veggies, rice, drink and dessert) at Php 50.00 of which the total cost per meal is Php 35.00 it must make more than Php 18,300.00 a day to really say that it has recovered its expenses and made a profit.

Now why am I writing about this in a blog about investing? One is that investing is not limited to stocks alone and another it is nice to know if the company you are planning to invest at is making by looking at their Profit and loss statement. Again before you dive into the investing bandwagon know what you are going into, only invest your excess, learn and always don't be shy to ask because its your hard earn money you are handing over to the broker.   

Accounting 101: Some thoughts on Break Even

The term is use to signify something about a business's Profit & Loss(click here to know more about Profit & Loss).

Break even is that level in which a business's, for example a karinderia, profit is just equal to its expenses. When I say profit that means selling price minus the cost of the thing you sold and by expenses I mean the cash out for expenses to run the karinderia like rent, salary of your cook and washer(if you hire one), cost of gas, electricity, and other expenses that you have to pay for to run your business.

Why is this important?This one is important when you are running a business because this will be the number that will tell you of you are earning or just losing in running the business. In simple terms you must surpass this amount in order to say that your business is an earning business.

In order to get an idea for this number or figure one must make an accurate assumption of what will your business sell and expend for a considerable span of time. In our case, the karenderia operates on a daily basis and its best to get a daily break even point to determine if it is worthed to stay in the karenderia business. 

The formula to get this number is shown below:

Break even = Operating cost divided by Contribution margin

Where:

Operating cost is your total expenses to operate the business
Contribution Margin is the percentage of profit on top of your item sold
                    which is (Sales - cost of item sold) divided by Sales

For example if your karenderia needs Php 5,500 to operate selling a complete meal(that is one meat, one veggies, rice, drink and dessert) at Php 50.00 of which the total cost per meal is Php 35.00 it must make more than Php 18,300.00 a day to really say that it has recovered its expenses and made a profit.

Now why am I writing about this in a blog about investing? One is that investing is not limited to stocks alone and another it is nice to know if the company you are planning to invest at is making by looking at their Profit and loss statement. Again before you dive into the investing bandwagon know what you are going into, only invest your excess, learn and always don't be shy to ask because its your hard earn money you are handing over to the broker.   

Accounting 101: Some thoughts on Break Even

The term is use to signify something about a business's Profit & Loss(click here to know more about Profit & Loss).

Break even is that level in which a business's, for example a karinderia, profit is just equal to its expenses. When I say profit that means selling price minus the cost of the thing you sold and by expenses I mean the cash out for expenses to run the karinderia like rent, salary of your cook and washer(if you hire one), cost of gas, electricity, and other expenses that you have to pay for to run your business.

Why is this important?This one is important when you are running a business because this will be the number that will tell you of you are earning or just losing in running the business. In simple terms you must surpass this amount in order to say that your business is an earning business.

In order to get an idea for this number or figure one must make an accurate assumption of what will your business sell and expend for a considerable span of time. In our case, the karenderia operates on a daily basis and its best to get a daily break even point to determine if it is worthed to stay in the karenderia business. 

The formula to get this number is shown below:

Break even = Operating cost divided by Contribution margin

Where:

Operating cost is your total expenses to operate the business
Contribution Margin is the percentage of profit on top of your item sold
                    which is (Sales - cost of item sold) divided by Sales

For example if your karenderia needs Php 5,500 to operate selling a complete meal(that is one meat, one veggies, rice, drink and dessert) at Php 50.00 of which the total cost per meal is Php 35.00 it must make more than Php 18,300.00 a day to really say that it has recovered its expenses and made a profit.

Now why am I writing about this in a blog about investing? One is that investing is not limited to stocks alone and another it is nice to know if the company you are planning to invest at is making by looking at their Profit and loss statement. Again before you dive into the investing bandwagon know what you are going into, only invest your excess, learn and always don't be shy to ask because its your hard earn money you are handing over to the broker.