33 ways of boosting your savings

Posted: January 11, 2013 in Misang's Personal Finance 101
Tags: , , , ,

Save and invest is my main goal for 2013. Mainly because we already have a little girl to prepare a good future for and while we still have access to some amount of money that we can invest, we will try it this year. I would say, enough of all the mindless spending (except for the house and hubby’s dream car).

I am first arming myself with the knowledge that I will need to ride that investment vehicle so I have been Google-ing a lot of articles regarding investments (Trust Funds, Mutual Funds, and no, Stocks are too technical for me) and I found this really informative blog named Investor Juan. There a lot of forums and financial blogs all over the web but this one is like an overnight financial investment crash-course so try to visit this on your spare time.

Meanwhile, I decided to repost this article here as my “getting started” post for 2013.

33 WAYS OF BOOSTING YOUR SAVINGS

33 fool-proof ways of cutting back on expenses and saving more money.

1. Cut back on going out for drinks. It’s okay to occasionally go out with friends and loved ones to catch up on things or celebrate special events. By occasionally I mean twice a week, at most. Going out more frequently than that is a sure-fire way of being broke at the end of every month. If you cut back on your going-out spending by 500 pesos per week, you’ll save 26,000 pesos per year.

2. Use your free dental benefits. If your office health plan covers dental services, then you’re most probably entitled to two cleaning sessions per year and one or two “pasta” treatments. The cleaning treatments alone will save you anywhere from 1,200 to 1,600 pesos per year (conventional wisdom teaches us to visit our dentist twice a year), and that doesn’t even count the benefits of having sparkly white smiles all year-long.

3. Walk to wherever you’re going whenever possible. I know how painful it can be to walk even short distances under the stifling heat of the sun, but whenever you can do try to just walk to wherever it is you’re going. You’ll not only save a few bucks on gas or transportation fare, you’ll also get a few minutes of exercise to boot.

4. If it’s not possible to walk, use public transportation whenever possible. If you’re just traveling alone and you’re not carrying any heavy stuff, then try to use public transportation like the MRT/LRT lines, FX shuttle services, and (as a last resort) buses as often as you can. While the savings on gas may not be very significant, avoiding the frustration and stress brought about by the ghastly traffic along major metro thoroughfares is priceless. What some people from the north do when going to Makati is park their car at Trinoma (flat rate 45 pesos per day) and just take the MRT to Ayala or thereabouts.

5. Stop using cable. TV is called an idiot box for a reason. Stop being an idiot, get rid of your cable subscription, and save at least 9,360 pesos per year (or 2,500 pesos one time if you’re into that illegal cable thing).

6. Learn to love reading for entertainment. Get a nice, second-hand Stephen King book from Book Sale for 150 pesos and it will give you anywhere from 24 to 120 hours of pure entertainment pleasure, depending on how fast you read and how imaginative you are. You’ll save on movie tickets (around 160 pesos for around one and a half hours, and sometimes the movie is not even that entertaining) and electricity (for your TV, DVD player, PC, or gaming console) and you’ll even improve your vocabulary and writing skills.

7. Eat at home more often. I’m not even talking about your once a week dinner dates with your special someone; what you need to get rid of is your almost-daily fill of Chickenjoy or Cheeseburger Meals. A 2-piece Chickenjoy meal now costs around the same as one kilogram of dressed chicken. Buy a pack of breading mix and gravy (or ketchup, if you’re into that) and deep fry your home-made version of Chickenjoy for at least one-third of the cost. But often, it’s not even about how much you’ll save, but how you can make sure that you get the best nutrition you can get for your money.

8. Take advantage of credit card freebies. Don’t forget those free Chickenjoy meals from BPI credit, Greenwich pizza from Metrobank credit, and movie passes from Citibank. But as Anica commented in one post before, don’t make the mistake of buying stuff you don’t need just to rack up the required amount. And don’t forget to redeem your points for free meals or extra flier miles.

9. Get free language lessons online. Free basic lessons for common languages are available from BBC – Languages. When I was looking for free Cantonese lessons online, I came across these two wonderful sites: chinese-lessons.com and learnchineseez.com.

10. Stop drinking soda. One less soda can a day will lead to around 9,000 pesos per year in savings and a lower chance of getting fat.

11. Buy a second-hand car instead of a new one. A brand new car loses around 10% of its value as soon as it rolls off the showroom floor. A decent second-hand Toyota Vios or Honda City that’s less than five years old with less than 100,000 km on the odometer will probably set you back anywhere from 400,000 to 500,000 pesos or around 40% off the brand new sticker price and still be eligible for bank financing.

12. Plan your trips to the grocery. You’ll enjoy the benefits of economies of scale in terms of effort and gas usage. Not only that, you also increase your chances of getting a free movie ticket from Citibank.

13. Withdraw money only from your bank’s ATM. It’s bad enough that we earn dismal returns on our savings accounts because of terribly low annual interest rates (often lower than one percent); that we have to pay a fee every time we withdraw from another bank’s ATM even when it’s part of the same ATM network as our own bank is what breaks the camel’s back. To avoid paying 10 pesos every time you withdraw 200 pesos (that’s 5% of your money down the drain), just put all of your savings in a bank with the most number of ATMs around the country; I think we all know which bank I’m talking about.

14. Negotiate that your credit card’s annual membership fee be waived. Just ask, and I assure you, your credit card company shall deliver. In my case with Citibank, I was just asked to sign up for their mobile service (which wouldn’t cost me any money) in “return” for waiving my annual fee, so who was I to refuse? This will save you at least 1,200 pesos a year.

15. Buy a netbook instead of a regular laptop (and don’t even think of buying a MacBook, with all due respect to Mr. Alyson Yap and all the Mac fans out there). The latest netbook models will cost you anywhere from 15,000 to 20,000 pesos, at least 50% of the price of most regular Windows-based laptops and 33% of the price of the cheapest MacBook in the market today. 10-inch netbooks are not only inexpensive, lightweight, and portable, you’ll also find that they are more than adequate for most of your day-to-day computing needs. A big, heavy, and clunky regular laptop should be out of the question for first-time laptop buyers, and while a MacBook may a sexy, secure, and powerful machine, its steep learning curve on top of its equally steep price makes it a not-so-attractive alternative to the frugal laptop buyer.

16. Use a prepaid cellphone line. No industry illustrates how intense competition among market players benefit end users better than the local telecommunications industry. The market is rife with unlimited text and call promos, and now you can even get 150 text messages to all networks for only 15 pesos! So if you’re an average user, there’s no real reason to get an 800-peso per month plan that you’ll just be forced consume just to not let it go to waste. With a prepaid cellphone service, you can easily get away with 500 pesos per month and save 3,600 pesos per year.

17. Use open source software. The reputation of Linux as an operating system for the exclusive use of geeks has now been completely eroded, thanks to the growing popularity and steadily increasing user-friendliness of distributions like Ubuntu and Linux Mint. Using Linux is the closest you’ll ever get to a “free lunch”: you get all the benefits of a virtually virus-free system at zero cost. Plus, there’s a host of open source software (like Open Office and GIMP) that can easily take the place of most commercial software (like MS Office and Adobe Photoshop) for both your personal and professional needs.

18. Eat more salads or sandwiches. Eating salads is the most inexpensive and hassle-free way of eating healthily. A bag of lettuce only costs 58 pesos and can last you 3 to 4 meals; add fresh tomato slices, some pineapple bits or cucumber slices, just about any kind of meat or seafood, a splash or two of dressing or a dash of salt and pepper, and you’re done. No cooking necessary. Tuna or ham on wheat bread can be similarly healthy and hassle-free, although I prefer my sandwiches toasted. All this healthy, yummy goodness at a fraction of the cost of eating out. And it can even be cheaper than some home-cooked rice and viand combos.

19. Research any major purchase (3,000 pesos and up) before going to the store. Every good decision requires equally good information. When you start earning your own money, you’ll realize how important it is to be more discerning in making big-ticket purchases; oftentimes, the best way to do it is to look for (trustworthy) reviews about your alternatives online before even setting foot in a mall. Once you know what brand and model you really want to buy, then visit a few stores to see if any one store sells the item you want at a significantly lower price than all the other stores: it does happen from time to time. Doing research for major purchases will help avoid “impulse buys” that we more often than not regret as soon as our money (or credit card) leaves our hands.

20. Stop your newspaper and magazine subscription and read news online. The global print industry is dying, as what happens to all business models that are becoming obsolete; in the next few years, most printed content will be converted to digital formats or migrated to online venues. Paying 18 pesos per day (or 6,570 pesos per year) for a newspaper subscription and/or 2,500 pesos per year for a magazine subscription just does not make sense when you can (legally) get the same content and information online for free.

21. Junk your gym membership (yes, the one you don’t even use that often). Doing push-ups for strength training and running for cardio won’t cost you anything. You can easily download a training program which uses a couple of dumbbells and an exercise ball for free. So why pay for gym membership, which costs anywhere from 12,000 to 24,000 per year, especially when you don’t go to the gym regularly anyway.

22. Brew your own coffee. If you’re into real coffee (not that sweet, blended ice beverage kind nor the instant 3-in-1 kind), then the best way to enjoy it is by brewing your own using a French press (even Starbucks says so in one of its flyers). A decent coffee press from Bodum will cost you around 800 pesos; ground coffee will cost you around 300 pesos for a 400 gram pack which will last you around two months at one cup a day (you can get even better and cheaper beans from Baguio). That’s a bargain compared to a tall serving of brewed coffee or cafe americano which will cost you around 100 pesos at your neighborhood cafe; drinking home-brewed coffee can thus lead to savings of as much as 33,000 pesos per year.

23. Pay with cash (for select goods). For basic expenses like gas and groceries, it’s always better to use your credit card because of the freebies you can get, as I mentioned in Item #8 of this list. But for some major purchases like gadgets, appliances, and other consumer electronics and durables, paying with cash is almost always the cheaper option. The “cash price” of these goods would be 5 to 10% lower than the sticker price, which is based on the default assumption that you’ll pay using your credit card.

24. Try to live as near as possible to your place of work. You don’t necessarily have to spend more if you get a pad that’s near your place of work. If you are working in Makati, for example, you’ll find decent and affordable apartments and condos for rent along Estrella or Boni Avenue; if you’re based in Ortigas, there are good-value residences in the Amang Rodriguez area in Pasig City. Whatever additional expenses you’ll incur by living near your place of work you will recoup with savings on gas, transportation fare, and time. Not only that, you’ll also be less exhausted when you get to work in the morning and when you get back home at night.

25. Regularly clean your electric fan and air conditioner. Clean electric fans and air cons provide better ventilation and cooler air even on lower settings, even in exceptionally hot and humid days. Plus you get the bonus of having a cleaner and more pleasant-looking (and not so icky) living space.

26. Scrap your landline phone. When was the last time you actually needed to use one when you were home? Nowadays you can even text your fast food delivery order. Easy 700 pesos per month or 8,400 pesos per year.

27. Use your work HMO for free medical checkups. Yeah, I know how we all love to play doctor from time to time and just google possible reasons for why we feel a bit doozy. But it does not ever make sense to scrimp when it comes to your health, especially when there’s no reason to. If you’re already working, then most probably you have health insurance, which comes with unlimited medical checkups. Use this benefit whenever you feel a little off-kilt and you’ll save at least 500 pesos per visit.

28. Get a part-time job. If you can watch Chuck marathons or play Call of Duty: Modern Warfare 2 till the wee hours of the morning, it means you have excess free time, precious free time you can use to beef up your disposable income. Try writing for a fee for search engine optimization firms or any writing gig you can find posted on Craigslist. If you have a repository of ample knowledge and confidence (and a bottomless well of patience), you might want to try being a part-time tutor. No matter what “racket” you decide to pursue, the key is to be productive and try to maximize the use of your time, especially when you’re still (relatively) young and single.

29. Get free e-books online. Works by Shakespeare, Dumas, Doyle, Dickens and other classical authors are all available online, legally for free, at Project Gutenberg. You don’t even have to have a Kindle or an iPad to enjoy these masterpieces; if you abhor reading from your computer, free e-book applications for most modern cellular phones and smartphones like the iPhone abound online.

30. Always fly no-frills. Just always show up for your flight on time, and you’ll get around 10% cheaper air fares. Who needs crappy airplane breakfast, anyway? The difference in food aside, carrier P is more expensive than carrier C not because it offers better service or because it has a safer flight record: it’s primarily because P is highly unionized. This means at the same level of output, P’s labor costs are several times higher than C’s, at that extra cost is passed on to unwitting consumers, i.e. us.

31. Invest in yourself. It’s something Warren Buffet is often quoted as saying. Getting an MBA is no assurance that you’ll instantly get promoted, but at the very least, you’ll learn things about business that no amount of experience can teach you. And believe you me, it will open doors you don’t even know existed. If you’re too lazy to study for another two years, you can instead try to get a professional certification (e.g CFA, CIA or SCJP) or a professional license to be a Real Estate Broker or a Financial Planner; anything that will set you apart from the other rats in the race.

32. Stop smoking. One, you’ll live longer. Two, you’ll save around 8,000 pesos per year. Need I say more?

33. Don’t celebrate your birthday. But if you can do all of the 32 tips I mentioned above, you can save as much as 140,000 pesos per year (excluding one-time savings), so there’s no real reason to be a penny-pinching birthday celebrant. Celebrating your birthday may cost you several thousands of pesos, but sharing your blessings with those who have helped you along in the past year and spending happy moments with your friends and loved ones is something you can never put a price tag on. So please ignore this last tip. Splurge and celebrate the most important day of your life. Just don’t forget to invite me when you do. 😉

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