Top tips for handling money

Top tips for handling your money in 2009
INQUIRER.net
First Posted 14:36:00 12/30/2008

The year 2008 has been a challenging year. Oil soared high triggering anincrease in prices of commodities from rice and sugar to canned goods andbread. But it also slumped, resulting in rollback of prices at the gas pumpand in transportation fares.Inflation reached double digit levels but recorded its lowest low as well. It was this year that the world felt the effects of a global financialcrisis. Thousands of workers in many countries have lost their jobs and homes as corporations and financial institutions buckled under the financial crisis.Filipinos are not exempted. Crisis is in the air and many are taking stock and preparing for what may lie ahead. That includes managing finances better.Some finance-savvy people share below how they are handling their finances in the midst of a global financial crunch:
Question: What have you done this year to manage your finances better?
Heinz Bulos, editor-in-chief, Money Sense magazine: My wife and I are Quicken types and it's easy to track where our money goes since we normally use credit cards and checks for transactions. But it's the cash withdrawn from the automated teller machine that's always difficult to account for. It's fine if we can't trace a few hundred pesos but when it's thousands of pesos "missing," something's not right. So we decided to centralize everything using a simple petty cash system - each of us can only replenish our cash every week once expenses are accounted for with proper receipts.
Karen Galarpe, blogger - Open for Business at www.inquirer.net, freelance editor and speaker on financial issues: I took a long hard look at my spending and have cut down wherever I can. For instance, I now patronize a salon that doesn't charge as much as the salon I used to go to, but still gives quality service. I also looked for a new school for my son that charges a more reasonable tuition fee yet still gives quality education. I patronize more Filipino products rather than imported ones which more often than not, cost more. In short, I have become more conscious about getting more value for my money without resorting to deprivation. I have also continued my habit of writing down my expenses and checking if I'm living within my means.
Judith Go, Citigold Wealth Management Director, Citibank Philippines: Crisis or no crisis, people need to review their finances every so often to look for areas where one can improve. It could be that the year before, you were setting aside 10 percent of your income, and this year, you will targeta higher saving rate. Personally, I realigned my investment portfolio and went for a moderate-aggressive strategy. I know that the markets will recover and I want to take advantage of the tremendous upside when that happens.
Alijeffty Gonzales, Registered Financial Planner, www.acgadvisors.net2008 will stand out as the year when classic principles of investments like diversification were turned upside down; the commonly accepted principle of bonds being inversely correlated to stocks does not seem to hold anymore as both dropped at the same time. As this may affect the liquidity of my portfolio (I don't want to be forced to a selling position when prices are low), the first thing I did was to establish a cash position that is twice as large as I normally would require. This came from the de rigueur cost-cutting of non-essential expenses and identifying new areas for generating income.
Question: What steps are you taking or will take to weather the financial crisis?
Heinz Bulos:I'm all for a little belt-tightening and some sacrifice, but cost-cutting goes only so far (plus it's not a lot of fun). So we're focusing on increasing the income side. It's not enough to diversify our income sources,working with different companies on ongoing projects. We realize it's very important to own the source of income itself, and that means focusing on our own business. We found a profitable market niche that works for us and we have lined up numerous projects in the coming year. We believe there are opportunities even in a financial crisis.
Karen Galarpe: I look for ways to increase my income without wearing myself down. I look for and work on projects that would be worth my while. In other words, Idon't just jump on any opportunity, but study wisely the pros and cons. I have also continued being diligent in saving, and have taken steps to diversify my investments. I hope to increase my savings rate this 2009.
Judith Go: Where I used to think twice about spending for wants, now I think thrice,even four times, until I convince myself not to go ahead. This is something I will keep doing even when the crisis is fully contained and we start to see a turnaround. I'm fortunate that this is something my kids have pickedup as well – they are quite responsible when it comes to spending their allowance – and I hope that they'll continue to be this way as they grow into adulthood.