Credit Card Tips

Historians say that ‘Letters of Credit’ were used as far back as ancient Egypt and Babylon. Merchants would use these letters of credit – in essence promissory notes combined with a character reference to allow them to buy goods without shelling out money and instead paying at a later date with interest. Letters of credit continue to be used today in international trade. Whereas for consumers like us, we also have our own version in the form of credit cards.

Credit cards are wonderful personal finance tools when used right…but when not used right it can be a humongous challenge to overcome and dig yourself out off. Check out some tips I shared at Solar Daybreak a few weeks back.

It’s Never Too Late to be Wealthy

Although it’s not the start of the year anymore – like the title says, it’s never too late to be wealthy.

December: Magkano Ka Na Ngayon?

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Building #onewealthynation one person at a time.

How do you know when you’ve arrived at your destination? When taking a road trip then there’s usually a arc saying welcome to so and so town. At the airport, before you deplane, the stewardess welcomes you to the city you’ve just landed in. Your senses confirm through sight, sound, touch, taste and even smell that you have made it to the place you intended to go.

But what about when it comes to money? How do you know when you’re making progress and how do you know when you are wealthy? For the past 11 articles we’ve been talking about a whole lot of doing. But as important as that is, it’s also equally important to slow down and re-assess where you are.

Meditate. Pray. Reflect.

Do your SALN again – this time it will take into account all your hard work for the year. You could find that you’ve decreased your debt (May: Invest in Debt Reduction) or have increased your assets (November: Investing). You could also find that you’re at the same place (numerically) speaking but that now you are making better money decisions which will reap its rewards later on. (February: SALN)

Revisit every month’s expense tracking – look at what kind of lifestyle you have as evidenced by your spending. How loose or tight are you with your money? How does that affect your life – your family, your relationships? (January: Follow your…) Have you started saving? (March: Savings Equation) Do you need to work on your spending some more? (April: Retain, Reduce, Eliminate) Is your safety net in place?

How far or close are you from your wealth goals? (July: Wealth Goals) Have you gotten serious about equipping yourself with the right knowledge and skills in building your wealth? (June: Financial Education) Do you have your financial safety net? Without it, it will be difficult to take the risks required to grow your money. (August: Financial Protection) Or are you already there? Having seriously studied your investment options-Risk, Return, Liquidity (October: Assessing Investments), are you already saving and investing regularly?

The good news is that wherever you are today in your financial life, and whatever condition the market is (you’ll know if you keep up to date and understand what’s going on (September: Signs of the Times) – whether it’s performing well or not so well, there are opportunities for you to take in building and protecting your wealth!

Colayco Foundation is here to help you on your journey with One Wealthy Nation – a community of Filipinos committed to being financially free. Learn more about it on www.onewealthynation.com

In this Series:

• JANUARY: Follow my money. This 2014, I will know exactly where every centavo I have goes.
• FEBRUARY: I will know how much I am worth today. I will have my own Statement of Assets, Liabilities and Net Worth.
• MARCH: I will start saving. Income – Savings = Expenses. I will set a target amount and set it aside before I spend.
• APRIL: I will seriously assess my spending habits. I will make the decision to RETAIN, REDUCE, ELIMINATE some of the things I spend on and put my money to better use.
• MAY: I will invest in debt – in growing out of bad debt. I will increase my payments so I can pay off the debt faster.
• JUNE: I will learn (something new) about growing my money. Read a book, attend a workshop, check out blogs and videos all about money management and investing.
• JULY: I will identify my wealth goals. Protection. Life Goals. Retirement. How much do I need? When do I need it?
• AUGUST: I will prioritize securing my protection – financial protection: Emergency Funds, Cash Reserves & Insurance.
• SEPTEMBER: I will learn to understand the news about global and local economy, financial markets and business and keep myself updated as these affect my finances.
• OCTOBER: I will select at least three mutual funds to consider investing in and study the risks and rewards of each.
• NOVEMBER: I will open a mutual fund account for my Life Goals and Retirement and start building wealth.
• DECEMBER: I will update my Statement of Assets, Liabilities and Net Worth and assess my progress versus my SALN from the start of the year.

New Year, New Wardrobe?

A few months back, Arthur Ladaga and I were working on really short articles to publish in a lifestyle magazine…some of the articles didn’t make the cut. Still we’d like to share them with you. 🙂 

New Year, New Wardrobe?

Start 2014 fresh, with an improved wardrobe, a healthy financial position and a game plan to be wealthy:

1. Buy the best classic pieces you can afford. Save with on trend accents. Trends don’t last long…so it doesn’t make a lot of financial sense to invest big bucks on something you’ll use only for a couple of months. Splurge on quality, good fitting, sensible classic pieces then jazz things up with bargain accent pieces.

2. Stop investing IN fashion, and start investing FOR fashion. If you spent 2012 maxing out your credit cards and worrying about your credit card balance…start investing FOR fashion, rather than ‘in’ fashion. Set up a fashion fund – a mutual fund investment whose earnings you specially dedicate for spending on fashion.

3. Make a game plan to be wealthy. Your current lifestyle is possible because you have the money to support it. If you want an upgraded lifestyle, it’s going to cost more. So make a plan – do you need to earn more, spend less, invest more, save more, buy more (assets) etc. Enjoy the finer things in life without worrying about the bill, start by making your game plan to be wealthy.

Guita T. Gopalan
Let’s Make Great Things Happen!

                

January: Follow Your Money

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Building #onewealthynation one person at a time. This phrase stuck with me the other day, then I realized – that’s how it has to be when it comes to MONEY MATTERS. It’s utterly and completely personal. Each one has to make that decision to be wealthy, identify their destination and has to find his/her own path to wealth and then has to traverse that path and make their detours along the way.

So, I’ve prepared for you 12 things you can do this year (one for each month) to effectively turn your financial life around. It’s all available and you can breeze through the 12 articles in one go but I recommend you come back to this series of posts every month and take the next step in your journey to be wealthy.

I hope you agree – It’s time to really do something life changing when it comes to your money this 2014. Be part of building #onewealthynation

Follow my money. This 2014, I will know exactly where every centavo I have goes.

Why:

• know where your money is spent
• understand what your ‘spend’ triggers are
• discover ways to save (so you can invest)

To Do:

1. Set up your tracker. It could be a small note book and a pen, your cellphone’s notes, an app, a spreadsheet…

2. Every time you reach into your wallet or coin purse and pull out money and when you swipe your credit or debit card…list how much EXACTLY (not just a rough amount or estimate) you disbursed and what it was for. Even the Php1 you paid a street vendor for a piece of candy.

3. Review this list every week (or every month). You’ll definitely learn something about yourself and how you manage your money.

Following your money is a life-long discipline don’t stop when January is over.

In this Series:

• JANUARY: Follow my money. This 2014, I will know exactly where every centavo I have goes.
• FEBRUARY: I will know how much I am worth today. I will have my own Statement of Assets, Liabilities and Net Worth.
• MARCH: I will start saving. Income – Savings = Expenses. I will set a target amount and set it aside before I spend.
• APRIL: I will seriously assess my spending habits. I will make the decision to RETAIN, REDUCE, ELIMINATE some of the things I spend on and put my money to better use.
• MAY: I will invest in debt – in growing out of bad debt. I will increase my payments so I can pay off the debt faster.
• JUNE: I will learn (something new) about growing my money. Read a book, attend a workshop, check out blogs and videos all about money management and investing.
• JULY: I will identify my wealth goals. Protection. Life Goals. Retirement. How much do I need? When do I need it?
• AUGUST: I will prioritize securing my protection – financial protection: Emergency Funds, Cash Reserves & Insurance.        
• SEPTEMBER: I will learn to understand the news about global and local economy, financial markets and business and keep myself updated as these affect my finances.
• OCTOBER: I will select at least three mutual funds to consider investing in and study the risks and rewards of each.
• NOVEMBER: I will open a mutual fund account for my Life Goals and Retirement and start building wealth.
• DECEMBER: I will update my Statement of Assets, Liabilities and Net Worth and assess my progress versus my SALN from the start of the year.

When It’s Ok to Not Be Paid

Inquirer:

FREE HUGS (Photo credit: drinksmachine)

Ask ko lang po, paano kung may kumukuha ng Serbisyo ko pero ayaw naman ako bayaran? Tulad ng nagpapa-make up services?

Guita of Colayco Foundation:

Whenever you give something for free you have to know exactly why you’re doing it.

a) Family or friends and you’re doing it as a favor to them

b) are you building up your portfolio – you need ‘looks’ and ‘clients’ that you’ve served who you can mention

c) It’s promotional-as the person will recommend you to others who can pay.

d) When you’re donating your skills/product for a good cause

If they just flat out refuse to pay then it’s time to evaluate. Why do they not pay? It’s possible that your price and service are not what they expected – the client has to feel ‘sulit’ ung bayad sa iyo. If this is the case then look at your pricing and the service that you give them. Should you lower your prices? It’s possible that your past and current clients aren’t your market, they can’t afford to pay your fees. Or is there an ‘extra’ that you can add at minimal cost that will make the client feel that they got so much in exchange or so little.

If they are really just stingy then it’s time for you to say no. Your client is the person who pay’s you for your services. If you keep giving your services away for free then you will never make any money nor will you ever be considered a professional in what you do.

A while back I saw this Decision Making Map about when to and when not to give your service or product away for free. Try it out it’s really helpful: check it out here.

Understanding UITFs

Pooled funds are a really good way of growing your money through financial investments with greater convenience, simpler decision making processes and leveraging on massive funds and expertise.

Learn more about one of the three types of pooled funds – UITFs or Unit Investment Trust Funds.

 

Guita T. Gopalan
Let’s Make Great Things Happen!

                

 

Freelancers in the Philippines

Curious about Freelancing? Take a peek into the lives of two young freelancers – listen to their stories about transitioning from full time employment to freelance, it’s challenges and how they’ve overcome it.  Get insights from veteran  and self-made professionals seeking to bring freelancing to the next level.

Guita T. Gopalan
Let’s Make Great Things Happen!

                

Debt Dilemma

Debt Payment (Photo credit: Images_of_Money)

 

Inquirer:

 

I am in a dilemma right now with 2 credit card company where I was a member since 2004. I was able to pay my obligation with this bank for few years while I am still living in manila where business is fine. But due to inevitable circumstances, we transferred our residence in Bicol. Business didn’t went well and ultimately wasn’t able to pay even my minimum due since it swell bigger than I am able to pay. I cut off all my communication with them because the 2nd month I’ve been answering their call and trying to negotiate to give me a longer (5years) term they couldn’t give me. I don’t have any means to pay. I have maxed out the 2 credit cards to 120k each.  But now, I received a postal mail from one of the bank’s legal collectors, it jumped up to 240k. They said, they will file a case against me and my wife.  My wife doesn’t know about my dilemma, should she know, it will another dilemma.  I admit, failures on this and willing to get out of this. But It seems growing and growing.

 

May I appeal to your good heart to give me a good advice on how I could get out of this mess, except for killing myself.

 

 

 

 

Guita of Colayco Foundation:

 

 

To get out of this problem, you and your wife need to work together so find a way to tell her of your dilemma. The presence of a counselor (or priest/pastor) may help you explain the situation to her.

Do you have a job or any means of earning regular income?

Do you have other financial obligations? I.e. Children, other debts?

Do you have any assets?

Here are initial steps you should take:

Step 1: Get in touch with the credit card company itself. The letters and calls are probably from a 3rd party debt collection agency. Ask for a statement that lists exactly how much you borrowed and also how much interest and fines were added resulting in the current total. This is important because when renegotiating, some of the interest and fines can be waived.

Step 2: Identify what assets you can quickly sell and approximate how much that would give you. This is because when you renegotiate, they will ask for a lump-sum payment.

Step 3: Spend only on what is EXTREMELY necessary and Identify how much monthly payments you can afford regularly. You and your family will have to give up luxuries and divert all excess funds to paying off the loan. Otherwise you will be in debt for a long time.

This is the start of your journey to Being GOOD – Growing Out Of Debt. It is do-able and MANY people have done it in the past. The following article can help you in greater detail: Debt Repayment Plan to manage your debt. But before all of that you need to be honest with your family, they are the ones that will assist you in growing out of debt.