Are You Part of the Sandwich Generation?

The photo above may look yummy, but once you get behind the metaphor it isn’t so appealing anymore.

What is the sandwich generation? Basically it’s the people who are financially caring for their retired parents while they are also financially providing for their children. In other words, they are financially “sandwiched” between two generations that can’t provide for themselves. It’s a relatively new term, which just made its way to the Merriam-Webster Dictionary in 2006. Though the term originated in the US, it’s a common phenomenon here as well.

But how does this happen?

Read more..

5 Things You Can Do to Save an Extra P1,000 or More This Month

It’s a new month again, which means that it’s a new opportunity for you to find other ways to save money. If you don’t know where you can get extra money for your savings, check out these five tips and see if they apply to you:

Have a daily quota for using cellphone credits. If you find yourself calling and texting often,  exercise a bit of discrimination when sending out messages. Avoid sending out forwarded messages the entire month. My cousin once asked me to be honest about how much I load my cellphone each week, expecting that I’d tell him a large amount. He was shocked to find out that I usually just spend P30 per month, and I almost never spend more than P90.

While I understand that there are some professionals that may find this difficult, at least try to cut back on using your cellphone for texting or calling friends and relatives. Opt for free ways to communicate instead, such as via instant messaging, landline-to-landline calls, Facebook, or email. (Of course, this isn’t applicable if you don’t have easy access to the internet, or if you need to call long distance.)

Don’t buy new clothes this month. Unless your house was accidentally set on fire or your clothes were stolen as you left them hanging out on the clothesline, don’t buy any new clothes this month. I know quite a few people whose monthly income is mostly spent on clothes shopping, and as they tell me they can’t find any money to save, I just want to slap my forehead in disappointment. Just eliminate shopping for clothes or shoes this month. It won’t kill you, I promise.

Discontinue newspaper and magazine subscriptions. I don’t subscribe to any newspapers, mostly because I just read them online. The Philippine Daily Inquirer, The Philippine Star, and The Manila Times all have online editions. Apart from the subscription savings, you’ll also have access to breaking news, and you won’t have old newspapers cluttering up your house.

I also don’t subscribe to magazines, but this doesn’t mean I won’t buy the occasional magazine that catches my eye. I just happen to be very choosy and I make sure that the content and value that I get from the magazine won’t be found for free elsewhere.

Cut dining and drinking out by half. If you find yourself going out often, such as more than once a week, cut this by half. This includes going out for coffee or lunch during the regular workday. Brew your own coffee or pack your own lunch instead. If friends invite you out and you don’t want to let them down, try my suggestions for making a gimik more affordable.

Automatically send at least P500 to your savings account as soon as you receive your paycheck. It’s wise to keep a  separate account for your savings, apart from your payroll account (as I’ve mentioned in a previous post). By setting aside your savings as soon as you receive your income, you have a lower chance of spending it.

Do you have additional money saving tips? Please share them in the comments.

Image by asterisco from sxc.hu

What are you doing with your extra cash this Christmas?

I’m receiving a sizable amount of unexpected income this month. Almost like a freelancer’s 13th month pay.  This isn’t unusual during Christmas, where people get paid more, businesses generally have more income, and students receive money as gifts from their ninongs and ninangs.  This extra money you receive is called “a windfall”.

What exactly is a windfall?  A windfall is an unexpected extra amount of income or business revenue.  Some examples include: inheritance payouts, Christmas bonuses, extra revenue, cash winnings, and cash gifts (the ones from relatives, not illegal ones form Malacanang hehe).

Although windfalls are common during the Christmas season, they also happen in other months during the year.  Anything you receive above your average income may be considered a windfall, if the money has not been budgeted yet.

What to do with a windfall

Most people spend windfalls by buying treating themselves or taking out their friends and family to lunch.  While nothing is wrong with rewarding yourself, leaving the rewards unchecked or unmonitored often means the money will disappear sooner than you think.  This is why I always have a plan for windfalls.

In case of unexpected extra income (which I usually have each month, since my income is not set in stone), I always have a hierarchical game plan on what to do with my extra money. Here’s where I stash them (in order):

1. Fund for house in the farm.
2. Fund for repairing my mother’s house.
3. Retirement fund.
4. Emergency fund.
5. Travel fund.

How I divide the money into those 5 funds depends on how much my windfall is.  If it’s only P5,000 or below, I usually put all of it in Fund #1, or I divide it between Fund #1 and Fund #2.

You can also do the same thing, set up a list of 3 to 5 things where you can put the windfall.  Make sure your list is in order so you would know what to prioritize. Keep this list handy - whether in your budget notebook or as a file in your computer - so that you can easily refer to it before the temptation to splurge sets in.  Don’t worry, you can always include “Personal Reward” in your list of windfall funds so you can enjoy that extra money a bit.  Just make sure that your entire windfall doesn’t go there.

It may seem like I’m too disciplined or I’m not rewarding myself enough, but that’s not the case.  Having the farm house built as early as possible will be a great reward for me.  I prefer to live in the farm and have some place to retreat to when things are going too crazy in the city.  It’s really all about setting your priorities based on the things you want to do and the dreams you want to fulfill.

Will you be receiving extra money this Christmas?  What will you do with it?

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