How we (husband and I) control our spending

July 21, 2014
We all love shopping, don't we? We can't avoid drooling over mall displays which sometimes lead us to unplanned purchase - branded clothes, gadgets, bags, a new pair of shoes, furniture, or anything that catches our eyes. If I were a heir of Uncle Bill Gates (lol), maybe I could shop things as much as I want. But we all know, that is not the real situation.

Since I've been promoted as a mom (which is my new blog's tagline), I have already become kuripot (stingy), which I'm only second to my husband who is the ultimate kuripot. Yes, we were blessed for having substantial-earning jobs, but we make sure we don't spend more than our income. We are not "ubos biyaya, bukas nakatunganga" type of people, not even one-day millionaires, because as we know (you and me) money would easily disappear in our pocket when we're not conscious of our spending.

So here, I will share with you our agreed-upon method in handling money.

1. Set up a budget.

Honestly, Ronan is much more financial literate than me, so his influence about handling money has infected me so much. (hehe) During in the early stage of our marriage, Ronan and I first talked about how we should handle our finances. We both agreed to keep track of our expenses no matter how small or big so we can figure out where our money is going.

How? We make a list by categorizing our necessary expenses including foods, emergency funds, house amortization, insurance, bills, gasoline, recreation, and the like. We agreed how much money or how many percent of our salary will go to each category.

This is how we classify the items under each category: Expenses and Savings:

2. We put right away our savings in the bank.

To avoid the bad money habit like overspending, we immediately put our savings in the bank. This fund is reserved for emergencies and future use like Chesska's education and for our retirement as well.

Luckily, since Ronan and I are both income generating, a certain rate of our income will go directly to our bank account. We have faithfully practiced this financial principle: SALARY - SAVINGS = EXPENSES. 

What does that principle imply? Well, it's very simple. As soon as we received our salary during pay day (take note pay day...well unless payday falls during holidays), we put right away our savings in the bank and never touch them unless, of course, when emergencies happen.  Then the money left will go to whatever our expenses.

Though at the beginning, we find this practice tough to achieve, but as time passed, we already get into the habit of saving.

If we'll reverse the financial equation to SALARY - EXPENSES = SAVINGS, for example,  what will happen then?  If you can't control your impulse by buying anything useless, you might have turned your savings into negative, as a result, you might have left indebted.

3. We avoid credits. 

As much as we want to avail credit card for easy purchase online such as booking a plane ticket, or for the sake of convenience by swiping the card when grocery-shopping,  but the idea that it is still "utang (debt)", then we decided not to avail it.

Instead, the only card we have is a debit card. Yes, we can still swipe and purchase online, well unless there are sufficient funds on it. As long as we know it is not "utang", then we can sleep well at night by not worrying about paying interest and credit card dues.

4. We invest into financial education.

Does it sound expensive? Actually, it's not. Financial education is just around the corner. We can read financial books on how to increase our financial literacy. Or we can ask advice from a financial mentor who can guide us how to handle our finances. Or meaningfully surf the net on how to manage our money wisely.

5. Lastly and most importantly, we practice delayed gratification.

While strolling around the mall, a nice dress in the boutique catches your attention. Would you stop and buy it? Or wait for a few days and think many times before you buy it?

How you answer the question would have a great impact on your finances in the future.

Delayed gratification is an important skill for one to develop in order to attain financial success. It means to delay your pleasure and to fight temptations over instant buying just to satisfy your present self or just to impress others.

Presently, I am proud to have a better half who managed setting aside his "wants" for the sake of our most important goal. I know he has long wanted to buy a new bike so he can exercise every morning, and a latest windows phone to upgrade his programming skills, but he rather opted to save so we can fully pay our house, hopefully, this year.

The same is true with myself. I want to replace my 8-year-old and cranky laptop into a new one, but then I have to control my urge until we'll hit our goal this year.

On the other hand, here are three ways how to reduce instant gratification.


How about you mommies? How did you and your husband manage your finances? I'll be glad to hear from you by leaving your comments below.

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