For roughly four years in college, I am used to eating out in restaurants, fast food chains, and carinderias (pinoy version of small food outlets) almost all the time. I live away from my real home in Davao, and here in Manila, I find no time to cook in my apartment (with serious studies and not-so-serious gimiks as valid excuses).

Admittedly, eating out also means shelling out some cash, so food budget really takes the bulk of my expenses BEFORE. But now that I am a li’l more mature, already graduated from college, moved out from my old apartment, and earning my keep, I know that eating out everyday is a no-no.

Right now, I cook at my new apartment. The food staples in my kitchen cupboard are beans in tomato sauce, sardines, tuna, canned corned beef, fresh eggs, tomatoes, a cheap loaf of bread, margarine and lots of bananas. Also, I have my daily consumption of coffee, chocolate, or juice from concentrates. Trust me, they might seem a lot, but they cost only a few hundred pesos in the grocery. I do my grocery twice a week. So far, this way of life is earning me a few bucks already.

For some, however, eating out is their only option because of their busy schedules. Anyway, the thing is to eat healthily. Taking in fastfood fries and chicken everyday can be a tough ordeal with our digestive system -simply, bad nutrition.

I just felt sharing these things because I read Simple Dollar’s blog about food. It made me hungry. I may not be a culinary expert, but at least I am learning a few tricks with the stove.

Have fun in your kitchen!

Today, the Simple Dollar illustrates the common misconceptions about frugal living.

Quite simply, most of us may feel miserable whenever we try to set aside a sizable amount from our spending power. For example, I feel deprived of the movie I REALLY, REALLY want to watch at the cinema today. I can’t help it; I’m just human.

But see here, a penny or two saved will accumulate in the future, perhaps to a few hundred thousands. Trust me, it works for me in day trading. I trade with a hefty volume everyday, and the way I see it, I may lose -$3 or -$4 from my account, but if I have saved enough $2 ten times over, I will still leave my account with $13.

The same thing goes with your lifetime savings, I suppose. If we have saved a penny every day, it would be a lot by the time we’re 60. Even if at times we need to take some money for emergency purposes, the total amount left would still be sizable. 

As to the feeling of misery, it’s a matter of choosing which angle to look at. For sure, I’d feel more miserable if I get sick and I don’t have savings to pay up hospital bills. HA-HA.

[1] MRT vs FX taxis

I have two choices of transport in going to work from Diliman, QC to Ortigas Center. The first one is to take the FX from the EDSA-Quezon Avenue corner, right below the MRT station. It gets me right exactly where I need to be for work, which is right across The Podium.

The other choice is obviously to take the train. I’d get off it at the Shaw Boulevard station, because passing by Shangri-La is less polluted than walking from the Ortigas stop-over. Besides, I get to enter SM Megamall just in case I needed to buy something.

COST ANALYSIS

To get to either MRT or FX, there’s the tricycle from the village (P7), and one jeepney ride from Philcoa (P8). The FX from Q. Ave to Ortigas costs P30, while a one-way train ride from Q. Ave to Shaw Blvd costs P12. MRT is cheaper, and thus gets the 1st point.

The FX gets me there directly, while I have to walk quite a route from the MRT. Mind you, walking can sometimes be tiring. FX scores 1 point for ease.

The FX, though, takes roughly 45 minutes because of the heavy EDSA traffic. The MRT speeds its way in less than 20 minutes. Still, from the train, I have to walk another 20 minutes because walking inside the mall can only be overly-tempting. It’s therefore a draw when time is considered.

So technically, the match is a draw, but since this analysis is about cost-effectiveness, MRT wins by a wide margin! Why so? Because if I take 20 days of work a month, the MRT fare totals P240, while the FX fare costs P600. I saved a whopping 60%  from our transport allowance.

Aside from that, if I buy a P100-value MRT ticket, I would have paid for eight P12 rides plus one bonus ride. That should be enough for 9 rides. If I calculate costs for 27 days, the MRT costs P300, while the FX costs P810. It’s 63% savings. In a stretch of a year (almost 240 working days), the total MRT fare costs less than P2,700, while taking the FX will take P7,200. Look at that.

So friends, I suggest we all take the train! We also get to reduce air pollution in Metro Manila, and we have a few minutes of exercise by walking. Not that I’m stating the obvious, because I think everybody is already doing the same, but having this detailed calculation convinced me that the MRT will lessen my transport expenses.

Just my two cents.

Here’s a great article by The Simple Dollar . Any ordinary person can save 20-25% off his salary every month, invest, and live off entirely from the retirement fund at age 40. That’s incredible, almost impossible to imagine. But it can be done, the article says.

For someone in the same line of thinking as I do, I know that time is on my side, at least for now. All I have to do is keep 5-10% off my meager monthly earnings, and I have to do it faithfully.

Right now, I am still 20 years old, single, have no debt, have no intention of incurring long-term debts (including credit cards), and have a single investment money stashed in time deposit in a rural cooperative bank (bigger interest rate, but insured by PDIC).

But I still have a lot of things to do before I reach 40 years old. Right now, I am a stocks trader. By age 21, I want to enter medical school, finish it off by age 26. During that 5-year salary hiatus, I’ll be saving at least 1,000 every week from my school allowance. Hopefully, I can get that done.

By age 30, I have already established a portfolio consisting of 100% large-cap Philippine stocks. I intend to be this aggressive until age 40. Of course, at age 30, I feel that I need to support my parents, too, so I still have to work my ass off in some public hospital or in private practice as a doctor. But my retirement fund should remain intact, I swear.

I hope to retire by age 50, and live simply. If I will spend extravagantly, it will be about traveling to many places here and abroad. Other than that, I am already used to a life of a simpleton.

So retiring at age 40 is not impossible. Prudence in spending plus aggressiveness in saving equals healthy financial attitude.

We are not immune to the woes of personal finances. Many of us are struggling to make ends meet, while some may have a hard time paying up loans and bills. A few of us may have a little in the piggy bank, but perhaps not enough for retirement.

No, we don’t need a lot of things. Thrift is the first rule of saving. That’s contrary to the idea of consumerism and exhaustive spending. But it’s easier said than done. How can we save some without becoming miserly?

1. Spend less time in expensive situations.
Going through product catalogs or seeing gadgets, clothes, etc inside the mall will only make us feel poor. Maybe you have some money for these, but you know that it’s not in the budget. Rather, go to the park, walk around the village, invite friends for a movie marathon at home, etc. Some things in life are for free. Meet up with old friends. You’ll be surprised how much time have gone away without spending a dime.

2. Change the image in your brain.
Delayed gratification is almost impossible if we do not see the whole picture of a more fulfilling future. When you think you’ve worked really hard to deserve a reward of some sort, think of long-term rewards such as a bigger savings-account balance or retirement fund, and the things you can do with them in the future.

3. Check your current state.
Do you have lots of clothes you don’t need? Do you have some books unread? Are there dusty things inside the closet, or below the bed that have never seen the light of day? Maybe you really don’t need all of them. Are you happy with them? Maybe you were better off with a larger savings account.

4. Cut some extravagances.
It’s a difficult thing to do. Right now, I’m cutting off my cable TV addiction. I’m getting used to free TV. Eating out in restaurants may be hard on the budget. I’m having a tough time cutting this habit, but I’m starting to eat at home before I go to work.

5. Identify your financial attitude.
Mutual fund managers often ask you this. But being prudent or risky can also apply to other aspects in life, like in saving. Are you faithful in your saving targets every month? Or did you miss your goals by a few bucks? Well, that’s okay. Or perhaps, you haven’t started at all? Find that weakness, and change it for the better.

6. Substitute costly with cheap, or free.
Look at every nook and cranny at the grocery store. Watch movies at home with friends rather than spending 10x more at the cinema. Borrow rather than buy.

7. Plan to spend, plan to save.
Some people call it a budget. Your spending plan should be realistic, though. Know how much of your earnings you can spend, and how much you can keep, without resorting to loans as much as possible.

8. Remind yourself.
Place a post-it on your refrigerator, on the PC monitor, or on your wall mirror. Seeing those rewards for your savings will make it feel like its almost there. It keeps you motivated and focused.

9. Fix your bank accounts.
You can allocate one account for your earnings, while setting-up another savings account strictly for savings. Pay up your credit card accounts soon! I’ve tucked away my own savings account so that it is now difficult (but not impossible) for me to withdraw those savings prematurely.

10. Set your personal rewards.
Here’s mine. I’d rather pay up monthly for a DSL connection than buy a PSP. Think of when and where do you feel happiest. Reward yourself with those. I’d rather visit my friends at their house than spend a lot on an extravagant vacation.

It’s good that we work hard every day, but it’s worthwhile to measure the true rewards that lie ahead.