Are you guilty of having selective hearing when the topic is about Financial Management? Do you pretend to be interested in efficiently managing your funds but when you’re faced with the dilemma of saving up for the future or buying that 50% item on sale, you almost always succumb to the latter? Personal financial management is a subject that is not taught in many schools, but is something that you have to deal with in your life sooner or later.
Living in a condo does not excuse you from monitoring your cash outflow just because you are maintaining a relatively smaller space. Surprisingly, a number of people owning a condo in the Philippines find it harder and harder to manage a simple and clutter-free home, more so in the US.
Good news is, you don’t need a financial adviser to start with a clean slate. There is an aim-shoot-fire approach that you can familiarize yourself with for you to manage your finances effectively.
Simplify your Life
Learn to live with less. The more appliances and gadgets you have, the more energy and condo space you need. Likewise, the more material things you have, the more money is needed for its maintenance. Simply put, do not buy things that you don’t need and give or sell those excess things that you have. Enough said.
Managing your finances doesn’t equate to cheap purchases or not buying anything at all. Injecting one of those energy efficient home designs in your renovation / makeover projects will definitely result to trimming down your household expenses in the long run. You can start investing on energy-efficient products and appliances like refrigerators that use up to 50 percent less energy than old models or replacing your light bulbs with energy-efficient LEDs.
Another thing, instead of purchasing expensive home decors that add clutter to your home, why not buy indoor plants instead and slowly convert your place into an eco-friendly haven. The positive impact of green architectural designs to both your health and the environment cannot be stressed enough.
Peter Drucker, a management consultant, educator, and author who invented the concept known as management by objectives, is credited to this famous adage “If you can’t measure it, you can’t manage it.” Likewise, how will you be able to identify household expenses you can cut if you don’t even have the list of the said expenses?
Here’s a few of the usual household living expenses and ways you can trim them down:
Pay your bills on time. You have no idea how much you can save from the late fees piling up on top of your regular bills.
Check your billing statement for accuracy. Believe it or not, inaccurate billing / overbilling happens and you wouldn’t want to be paying for something you did not use.
Remember that credit card, like cash, has its limit. Not the credit limit but your budget limit. Pay your dues in full and take advantage of the perks of owning a credit card, like paying purchases on the next billing period, cash back / discount / points privileges etc.
Use bike or just walk if you need to do some errands a few meters from your place instead of using an automobile.
Distribute work among family members. This will make household chores easier and faster to do, not to mention children becoming more responsible. Another thing, hiring a house help these days is really expensive plus the fact that it is hard to look for someone you can really trust.
Be creative in finding ways to lower your electricity bill. Some of the practical methods that could be done easily at home are as follows:
Use compact fluorescent light bulbs or LEDs. They use less electricity and last up to 10 times longer than incandescent bulbs.
Turn-off lights and be sure to unplug the appliances when not in use,
Use timer when using the air conditioner,
Minimize ironing schedule to once a week or better yet every other week,
Play with your family outside the condominium than busying yourself with computer, media and/or gadgets,
Clean the content of your refrigerator so it wouldn’t be consuming much energy in keeping your food cold.
Eat together. It can help you save on energy cost by minimizing the use of oven/microwave for reheating food.
Keep carpets, heavy drapes and blankets away during summer. Aside from the fact that they consume more water and energy when washed, your unit will welcome the summer breeze with light curtains and summer friendly interior.
And the list goes on. Remember these steps: list, keep track, monitor and improve.
Maintenance is the Key
Regular maintenance is important in maximizing the efficiency of appliances that you already have. Examples include:
Check air filters of cooling systems monthly especially during the seasons that they are mostly used.
Clean air vents and exhausts.
If your refrigerator does not defrost automatically, defrost it on a regular basis to eliminate ice build up on interiors coils.
Follow prescribed maintenance in product owners’ manuals.
Clean bulbs, fixtures, lenses, lamps and reflective surfaces regularly. By removing the grease, dust and other dirt, you can increase their light output.
Live by it
Managing your finances is not a one-time-big-time project, rather, it is a way of life. So to start the ball rolling, you have to make your own financial purpose. It can be any of the following; To have Financial Freedom, to have a P10M net worth in 10 years, to see the world, to purchase more condo units and have it rented, be a financial adviser, etc. This statement will give you direction and manage the gap between where you are now and where you want to be. In fact, even a 70% off on an item you don’t usually miss will not be a temptation anymore if you have that goal in mind. Best thing about it, the more you manage your finances, the more it becomes a part of your everyday life.