Mommy Banker

Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders is a documenatary film which seeks to raise awareness on how credit and lending issues are affecting American society.   While it is targeted for Americans,  it could very well be telling our own story.  We as a nation and as individuals are also over our heads in debt.  Affluenza has led to an addiction to debt.

It’s a movie you can’t afford to miss.  Watch it here for free (albeit in low quality).   Share the link with your children,  your family and your friends.  Hopefully, it will make them think twice about spending money that they don’t have.    When it comes to credit,  it pays to be informed.

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

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I’ve seen numerous emails circulating about six-word biographies, especially after Wired Magazine held a contest inspired by Hemingway’s story:  “For sale: baby shoes, never worn.” If you search the internet,  there are quite a few interesting 6-word financial stories, some of which could be the story of my own life.  =)

Here are some lives in money, in six words. 

*  Bought high, sold low, smacked forehead.
*  I save, he spends, we’re broke.
*  Must mend holes in my pockets.
*  Need to pay off credit card.
*  Spending my days hiding from responsibility.
*  ET phone home. Wire more money.
*  Born with a silver spoon: yum!
*  Do children really cost that much?
*  I came, I saw, I overspent
*  Doing my best to retire early.
*  Spurts of saving, blasts of decadence.
*  Got more sense than dollars, unfortunately.
*  Spent much, saved little. Oh well.

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

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Here are a couple of things I learned from my son’s confinement:

1.  Know your medical benefits.
Even though our employers use the same HMO,  the benefits were very different - mine (higher room rate - all incidentals must be paid upon discharge),  his (no cash out - subject to deferred payment via payroll deductions).  We had to sit down and compare line by line before deciding to use mine.

2.  Know your rights under the contract signed between your employer and the HMO.
All HMOs have liason officers at the hospital.  Ask them the nitty gritty so that you won’t be unpleasantly surprised when you get the bill.
For example:  My employer has an agreement with the HMO that if a regular private room cannot be provided within 24 hours,  I am entitled to an automatic upgrade to the next class, so long as it isn’t a suite.  Now,  did you know that in MMC,  the next class to a regular private room is not a large private room but a suite?  I went ballistic when I called the call center and they said that I had to pay extra for the large private because it was within the same “class/category”.  
Also,  did you know that the 24 hour count is used according to the hospital’s billing cycle?  So even if I had been admitted at 4pm on the 19th,  since MMC’s billing cycle starts at 9am,  I needed to find another room by 9am on the 20th or be charged extra.  Weird.

3. ER is convenient but will cost you extra.
When we rushed Andre to the hospital on the 19th,  he was suffering from dehydration.  His pedia recommended that he be admitted right away.  Rather than wait for a room to be found,  I requested that he be sent immediately to the emergency room so that he could be hooked up to an IV, and have his blood extracted and Xray taken.  Anyway, the ER costs were covered by our medical plan.  I’m glad I did because it took me some time to get a room for us (there’s a lot of sick children).

4. Make HR your BFF.
I don’t think that I would have been able to process our medical papers or get the kind of attention from the HMO that we got it if it hadn’t been for the help provided by HR.  We were able to get discharged even at the extremely odd hour of 945pm yesterday because all the paperwork had already been accomplished.

Being hospitalized is mentally and emotionally draining.  It is good to know your entitlements before *knock on wood* you, or a loved one,  needs to be confined.

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

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Ok, so we had a budget which we felt we could live with.  The problem was recording our daily expenses.  We tried excel files,  notes in cellphones/pdas etc… all to no avail.   Matching credit card slips with our statements was ok.  Recording the day to day casb expenses was another story.  Such a pain!!!!!! 

This year,  we’ll try a different tactic.  We’ve printed out calendar sheets from outlook and as soon as we get home,  take 10-15 minutes to write our expenses — from toll to food to cab fare.  On weekends,  we take 20 mins max to record the expenses against the budget.  A bit more convoluted but it seems to be working.  =)    I realized that my discretionary expenses shot through the roof in dec not because of gift purchases but because of Starbucks runs made in pursuit of the planner.  Humph.

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

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I was inspired by the MBN Group Writing Project to share a sample family budget spreadsheet.  We use ours to map out and track our projected expenses (including big ticket items such as yearly tuition payments) for the next 2 years so that we can adjust our savings in anticipation.  Note that budgets vary from family to family so please feel free to tweak it to suit your own needs.  This will address the question “Where Did It All Go?” and help keep you on course. 

Download:  Sample Budget Planner.  The link will expire in 7 Days and will be available for 100 number of downloads.

The very first worksheet is the TOTAL Budget and is divided 4 Sections. 
1.  Income Contribution (Rows 4-7)
This assumes that each partner will be contributing a set amount per month for the common fund.  Enter the agreed amounts in columns F - AD (include one-off additions such as 13th month pay and bonuses which go to the family pool).   Row 7 are for the other sources of income eg. rental etc. 

2.  Regular Bills / Fixed expenses (Rows 11-19)
This includes all regular bills including needs and wants.  This includes loan payments,  insurance, and savings.  Note:  Pay yourself first. Enter the figures in columns F-AD.

3.  Budgeted Items / Variable Expenses (Rows 24-33)
These are the items which could vary month on month e.g. electricity, cellphone bills.  Note the Gifts and Travel rows.  I’m providing a budget for Bday/Xmas gifts and budget travel. The figures in columns F-AD are automatically picked up from the MONTHLY SHEETS.  I included a Discretionary Budget  for pampering e.g. dinners, clothes.   Note:  Unlike the previous items, inputs for variable expenses should be placed in the Monthly Sheets.

4.  Totals (Column B-D)
These columns summarize the incoming and outgoing funds for 1-2 years.  The remaining funds (Row 41) should be zero / positive.  If it is negative, then consider adding income or minimizing expenses.

MONTHLY SHEETS
For yearly budgeting purposes,  place a figure in the cells highlighted yellow.  This is the average/expected expense for the month.  You can then gradually replace these with the actual figures as they occur.    The totals (Row 19) are auto-linked to the Total Budget Worksheet. 

Keep the spreadsheet tidy by “hiding” columns and sheets for the coming months in Excel. (Under the “Format” menu, select “Column -> Hide” or “Sheet -> Hide”.)

Make it a habit to review and update this spreadsheet regularly.  =) 

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

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Before you co-habitate, do your financial due diligence! It is not exactly the most romantic thing to do (sweetypie,  how big is your credit card bill) but extremely necessary to avoid/minimize pesky arguments in the future.  TheStreet.com’s Michael Katz has come up with the following tips.

1.  Discuss Financial Goals and Attitudes
You HAVE to talk about money and what it means to you before it gets to you.  Differences in attitude can be a major source of tension.  What will you use the savings for?  A new car?  Travel?  House?

2.  Review your Credit History and Debt
Credit card debt is a touchy subject.  Do I want my husband to know that I blew half of my salary on shoes?  One of the reasons why the  Shopaholic series is so popular is because so many women can identify with Becky Bloomwood.  Both partners need to figure out how to reconcile their spending habits.  It takes a little bit a work but the spendshift and the saver can get along.  The family finances are your joint responsibility.  Remember, the rules on conjugal property apply to both assets and liabilities.

3.  Update Beneficiaries, Will and Legal Documents
Remember the insurance policy you took out when you were still single?  It’s time to revisit and update the beneficiaries.  A tad morbid perhaps,  but you should also make a will, power of attorney and health care proxy so that your families aren’t left with difficult decisions to make.

4.  Create a budget
Your financial goals will not come to fruition without a good budget. It will let you know if you are living beyond your means.  Oh, and make sure that you have an emergency fund (generally 3-6 months worth)

5.  Joint or separate accounts?
What’s yours is yours? Or what’s yours is ours?  There are pros and cons to either arrangement.  Given our very different personalities and preferences,  we decided to set up a common fund to take care of the family expenses and investments and at the same time maintain separate chequeing accounts for our personal expenses.   So far so good.

Real Simple has an excellent list of Money Questions to Ask.  Download the file here.

Related topics:
Engaged? Show me the money!

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

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Family finances can be a tricky subject.  The engagement period is an excellent opportunity to communicate…. communicate… communicate… so that hopefully, a few years down the road,  you won’t be screaming at each other to “show me the money”.

Most couples, once engaged, attend a Discovery Weekend to thresh out potential points of conflict e.g.  how many kids they intend to have,  how they will be raised,  where they will spend Chrismas Day, etc.   I firmly believe that pre-marriage counselling should also include financial planning.  I had an officemate who, upon her engagement, sat down with her fiancé to determine their networth and make a 5-year financial plan.  It’s a great idea which I think I will ask my children to do when it is their turn to settle down and start a family.  

These are conversations which SHOULD take place BEFORE the wedding - doing an ostrich could lead to frustration, fights and power struggles.  Here is a list of questions which all newlyweds should ask themselves and their partners.

1.  What are your assets and liabilities?  In our culture, talking about one’s financial status is generally a taboo subject, but these are important numbers to know.  You need to know if you will be starting your married life in relative financial security or deep in debt.  You cannot stay in denial about the state of your finances, especially when it comes to debt.   The truth will always come out and sometimes it won’t be a pretty sight.  

2.  What is your money history?  Another taboo subject but also necessary.  You need to discuss how you were raised to view money.  How did you become a spender or a saver?  What does money mean to you?  You need to understand each others money habits before determining your future financial goals.

3.  What are your financial goals?  That dream house, European vacation, BMW all come with a pretty hefty price tag.  You should talk about the time-bound steps you’ll be taking to transform those dreams into reality.   Turn this into a yearly exercise. 

4.  How will we manage our finances?  The wedding preparations can be viewed as a stress test which will help you identify “hot spots” which may need to be worked on together.   How do you deal with run-away wedding expenses?  Does your partner get easily blindsided by the pretty flowers and fully beaded gown? 

These questions are meant to be starters to a more meaningful and insightful conversation.  You will certainly learn more about each other in the process.  We’re starting  a bit late but hey, better late than never.  =)

Related Post:
Pre-wedding Due Diligence: A Must!

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

Subscribe to my feed or subscribe via email to get notified of my next post.

Here’s a front page story from today’s New York Times:

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

Subscribe to my feed or subscribe via email to get notified of my next post.

The path to Frugal Living can be lonely if you’re doing it on your own.  The key to success is surrounding yourself with like-minded individuals who will provide the little extra push to get the ball rolling.    One of my favorites is Dawn and her blog Frugal for Life.  

She recently came out with her BIG list of tips to save money.  While some may not be doable in the Philippine setting,  there any many more which made me go… OO nga ‘no??!!!  

• When you go out to eat,  order water.  It’s free AND it’s healthy.
• Take your dinner from the night before to lunch the next day.
• Be obsessive compulsive and keep lists.  Don’t buy on impulse.  Planning ahead is your biggest money saver.
• Save those newspapers, plastics and soda cans.  Your junk can be turned to cash.
• Stay at home more by taking on a hobby or project (hmmm.. transition from paper scrapbooks to escrapbooks). 
• Learn to sew (alteration costs can add up).
• Spread the word when you are in need of a particular item.  Someone might actually have one handy to lend / give to you.  Or at the very least  tell you where to get it a good price.  =)

The Philippines is one of the 11 countries where Citibank decided to conduct a survey called Citi Fin-Q to measure financial intelligence among consumers. The results were stark: eight out of ten Filipinos believe they face a bleak retirement and more than half expect to be supported by their children in their old age. Nine out of ten attempt to follow a budget, but only 33 percent stick to it.

We definitely need to improve financial literacy in our schools. Students are graduating without the basic skills needed to manange personal finances.