Managing finances

Being a woman who wears many hats, people often ask me how I am able to do all that I am able to — like manage my home, attend to my children, train for triathlons, conduct seminars, have “me” time and dates with my husband. I cannot boast of having accomplished all of that on my own; not without the help of people who back me up and allow the hours of my day to be longer.  It is no joke to try to attend to so many people’s needs especially since each one of them is unique and so I have to adjust my timing and approach to each one depending on what connects.

One of the main responsibilities I have right now that I have been diligently working on is managing our finances.  As I have relayed in previous articles, this area of financial management is very new to me. I am blessed to have a husband who takes care of everything and leaves all the spending to me, which he has already properly allocated for. I have to admit that spending is a much easier task than having to come up with what to spend.

I sometimes take for granted the amount of work needed to properly manage the expected inflows of the family and to properly assign this funding to corresponding allocated spending. It is easy to spend — but not very easy to manage the given amount coming in every month. 

These past few years, I have learned that it really is essential for one to start with a budget. For as long as one is given a clear, big picture of the actual or even estimated situation of the family’s funding situation, there will be enough confidence to carry the family’s budget through until the next month comes. I have also learned that there must always be a back-up plan for unexpected payables as well as delayed collections that will mean adjustments in the current budget as inflow total is then affected. I have learned to stay calm when a promised collection is not received for some reason or another. It is hard to judge suppliers or partners but it is a good reminder for me to always keep my word and when I can’t, to try to inform those expecting from me ahead of time so they can resort to a back-up plan. 

In cases where available funds cannot meet the current budget, I have resorted to using my credit card to give me more time to source the funds and it is a good one-month reprieve. For as long as I commit to paying the same amount of money I spent, I am in good standing with my card.

To make our card fully beneficial to us as cardholders, we have to make sure we are conscious about our credit card’s limit and make sure that we spend within that line.  Our credit limit is based on our paying capacity so we should not abuse it. I have to admit that in the past, all I knew was an estimate of our credit limit; it was not my practice to study what was written in my monthly bill.  Remember, payments were previously settled by my husband. We should take time to scrutinize the information given to us so that we are aware of our benefits and responsibilities as cardholders.

As a mother, I always keep in mind our cards’ credit limits, which helps me plan our day-to-day spending. As much as possible, I make sure that whatever budget I have allocated for groceries, gasoline, tuition fees and other bills are what our card limit can handle at any given month.  Instead of paying outright cash for the things I mentioned, there is more room to stretch our budget. 

Aside from our credit limit, we must be aware of our card payment’s due date. There is a penalty charge for every day we don’t pay our credit card on time. This is on top of our interest charges based on our total spending. So don’t miss paying your card on time. Keep in mind that your card remains in good standing and penalty-free for as long as you pay it on or before its due date. Even if you pay your card in full, but missed the due date, you are still going to be charged a penalty fee. I try my best to make sure also that we pay more than the minimum due so we can stay in good standing with our credit and have the chance to settle the base amount and not just cover the finance charge alone. 

Since we just moved to our new home a year ago, we needed to inform our card company of changes in our address or contact information so that they are able to send our billing on time and at the proper address. 

My main career is that of a mother but I also work and so does my husband, Anthony. I am in charge of drawing up our weekly budget, which we meet about before the end of each week. We take note of all expected inflows and then draw up the allocations for regular and one-time expenses. We have learned that setting aside a certain percentage of our earnings on a weekly basis for payables such as our credit card payments helps ease the load of producing the necessary payment on its due date. It pays to be on time!

With a credit card, we are able to enjoy convenience at our fingertips. We don’t necessarily have to carry cash with us all the time, which for me is quite a challenge to keep track of to the last centavo. I don’t have to worry about having it lost or stolen. However, I have experienced having my card stolen in the middle of taking care of my children in the mall; but for as long as we are able to call before the thief makes a purchase, our money remains intact.

There have been times wherein certain people presenting themselves as agents call me to ask for certain details that will enable them to give me updates on my card’s standing and I have also learned from experience to not share any information about it casually with anyone, especially those I do not know so well. I do not entertain calls from strangers who present themselves as agents of my card company. Once they start asking questions about card information like our birth date, card expiration date, etc., I gently decline to continue the conversation and ask for an official letter from our card company. That will then expose the credibility of the agent calling. I also avail of a card I can use separately for online purchases or charges only. This way, I don’t expose our full credit limit and it gives us added protection from online fraud. BPI offers the e-Credit card for free to its cardholders.

When I was just new at handling our finances, a dear friend introduced me to online banking. I take advantage of this by paying my cards and bills online. As soon as I get home, I transfer the payment to my credit card account online and don’t have to worry about missing the due date. This requires enrolling our card in our online banking transactions and it takes a few minutes to save; we don’t waste so many hours commuting and lining up in our bank.

What I just learned lately, having spoken to some friends from BPI, is that there are countless ways to pay zero interest on goods purchased by installment. I was told that all I have to do is inform the accredited establishment about a purchase I would like to pay on installment basis and they will ask as to the duration of the installment I would like to avail of and I can then enjoy the purchased item upon charging it to my card.

As we have stressed in our previous articles, Anthony and I believe that a credit card is a gift that must be used wisely for a more empowered life. It can either make you if you are wise or break you if you abuse it. Suze Orman reminds us to ask ourselves how it makes us feel to use our credit card. It will determine how we use it. I would definitely ask you to set aside your credit card if you see this as a tool to get over your anger or frustrations in life. By being powerful for a few moments, you set a trap for yourself that might make you helpless for life. Managing our budget is not about how we feel about circumstances alone. It is about seeing the big picture and studying the best possible options to take in order to balance what has been entrusted to our care. It also means giving value to our commitments and meeting our obligations on time.  We then need to learn to ask ourselves basic questions before making a commitment to spend on any given thing such as:

1. Is this a need or a want?

2. Can I pay for what I purchase on time?

3. What will my family and I gain or lose from this transaction?

There is this three-second rule that I learned from my husband that can help with impulsive urges, whether in our finances or life. It simply states we have three seconds to decide on our options regarding anything we face in life. During that brief time, all we need to do is pause, take a deep breath, think clearly and pray before we actually make a decision. If we apply this practice, we will most likely end up in a better place, especially when it comes to managing our finances.

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BPI and BPI Family Savings Bank have conceptualized together the launch of a credit card with low rate, no frills positioning – the BPI Family Credit Card. Your everyday spend is now more affordable with this no frills credit card with its low interest rate (2% monthly) and membership fee. For more information visit www.bpicards.com. For questions and feedback email us at wealthness@philstar.com.ph