Most Filipinos have days when they just exclaim, “Hindi ko alam kung san na napunta ang pera ko.” (I don’t know where my money went.)
Most of Filipinos are used to saving and budgeting for the big purchases so that they can afford it. Some do not track their budgets and wonder where these “mystery spending” are coming from, as stated by 21% of the survey respondents of “Enhancing Financial Capability and Inclusion in the Philippines - A Demand-side Assessment” by the World Bank in partnership with the Central Bank of the Philippines. They wonder where their money went because of unnecessary expenses which are untracked.
Here’s a look at five of those seemingly small expenses that can ruin your budget.
Additional Charges Dues to Late Payments
Interest rates of credit cards may seem low at 1.99% - 2.99% but if you compute it, here are some computations of amounts of interest:
Interest rates on credit cards
Php3,588.00 and Php7,176.00 are both significant amounts that one can add to his savings or investment fund instead of wasting it to pay unnecessary fees. This does not only go for credit cards but for any financial product with an interest. It’s easy to tell ourselves that we’ll just delay the payment for one month but before we know it, we have accumulated unnecessary expenses due to complacency.
Landline and Cable Subscriptions
Stand-alone landline subscriptions costs from Php499.00 – Php600.00 per month depending on the network provider, which can cost you Php5,988.00 – Php7,200.00 per year. Some cable companies now offer prepaid and postpaid plans that have Php1,599 – Php4,280 one-time installation and cable box payments required before the recurring monthly fees. This could lead to Php7,868.00 (Php4,280 one-time fee with Php299 per month charge) - Php8,187.00 (Php1,599.00 one-time fee with Php549.00 per month charge).
Some things to ponder on if these expenses are worth it are:
Inter-branch and Inter-bank Fees
There are many instances when going to a branch of your bank where your ATM card is not registered or checking the balance of your account using another bank’s ATM.
Here are some bank transactions and their corresponding costs, which can vary depending where you have your account.
Coffee shop visits
There are many of us who think of coffee shops as a place for meet-ups such as corporate meetings, get-together of friends, and a place for studying.
In this infographic by MoneyMax.ph, it’s indicated that you can save as much as Php34,800.00 if you skip the weekly Starbucks coffee. This is also applicable to other coffee shops because most artisan coffee are priced at Php120.00 – Php150.00. Are you up for this challenge?
Unnecessary food splurges
It’s understandable when we go out for good food such as birthdays, graduations, and weddings, but there are instances when you can avoid spending extra cash on money. This could be bringing your lunch to work or buying food from the nearby stall so you can eat at the office instead of going to the mall.
You will have spent Php600.00 on lunches alone if you spend Php120.00 on a lunch out for 5 days. This can already be your lunch and dinner budget for 1 person if you buy 1 kg. chicken for Php140.00 and 1 kg. pork for Php220 and buy ingredients with the remaining Php240.00.
The definition of expensive is relative to everyone so determine what is your maximum amount for food expenses on ordinary days.
Final Thoughts
There’s nothing bad about spending extra money on different expenses just as long as it is within your budget. What is dangerous is not knowing where your money goes and ignoring tracking small expenses because you do not feel that they are significant enough. It’s not the amount that make the small expenses dangerous, but the frequency of spending.
Author Bio:
Kyle Kam is a Digital Marketing Specialist of MoneyMax.ph, a financial comparison website aiming to help Filipinos save money through diligent comparisons of financial products.
Most of Filipinos are used to saving and budgeting for the big purchases so that they can afford it. Some do not track their budgets and wonder where these “mystery spending” are coming from, as stated by 21% of the survey respondents of “Enhancing Financial Capability and Inclusion in the Philippines - A Demand-side Assessment” by the World Bank in partnership with the Central Bank of the Philippines. They wonder where their money went because of unnecessary expenses which are untracked.
Here’s a look at five of those seemingly small expenses that can ruin your budget.
Additional Charges Dues to Late Payments
Interest rates of credit cards may seem low at 1.99% - 2.99% but if you compute it, here are some computations of amounts of interest:
 |
| Credit card charges sample computation |
Interest rates on credit cards
Php3,588.00 and Php7,176.00 are both significant amounts that one can add to his savings or investment fund instead of wasting it to pay unnecessary fees. This does not only go for credit cards but for any financial product with an interest. It’s easy to tell ourselves that we’ll just delay the payment for one month but before we know it, we have accumulated unnecessary expenses due to complacency.
Landline and Cable Subscriptions
Stand-alone landline subscriptions costs from Php499.00 – Php600.00 per month depending on the network provider, which can cost you Php5,988.00 – Php7,200.00 per year. Some cable companies now offer prepaid and postpaid plans that have Php1,599 – Php4,280 one-time installation and cable box payments required before the recurring monthly fees. This could lead to Php7,868.00 (Php4,280 one-time fee with Php299 per month charge) - Php8,187.00 (Php1,599.00 one-time fee with Php549.00 per month charge).
Some things to ponder on if these expenses are worth it are:
- How many people use my landline number to contact me and cannot do so at my cellphone?
- How many people do I call using my landline whom I cannot reach via cellphone?
- Can I just watch episodes of the TV shows online instead?
- You can keep these expenses if you assess that they are important to your personal life. Otherwise, it would be wiser to take them out of your monthly expenses.
Inter-branch and Inter-bank Fees
There are many instances when going to a branch of your bank where your ATM card is not registered or checking the balance of your account using another bank’s ATM.
Here are some bank transactions and their corresponding costs, which can vary depending where you have your account.
- Encashing a cheque at another branch which is not where your account is registered – Php100.00
- Depositing money to an account registered in another province – Php50.00
- Checking your balance at another bank’s ATM – Php1.00 - Php 2.00
- Withdrawing cash at another bank’s ATM – Php10.00 – Php15.00
Coffee shop visits
There are many of us who think of coffee shops as a place for meet-ups such as corporate meetings, get-together of friends, and a place for studying.
In this infographic by MoneyMax.ph, it’s indicated that you can save as much as Php34,800.00 if you skip the weekly Starbucks coffee. This is also applicable to other coffee shops because most artisan coffee are priced at Php120.00 – Php150.00. Are you up for this challenge?
Unnecessary food splurges
It’s understandable when we go out for good food such as birthdays, graduations, and weddings, but there are instances when you can avoid spending extra cash on money. This could be bringing your lunch to work or buying food from the nearby stall so you can eat at the office instead of going to the mall.
You will have spent Php600.00 on lunches alone if you spend Php120.00 on a lunch out for 5 days. This can already be your lunch and dinner budget for 1 person if you buy 1 kg. chicken for Php140.00 and 1 kg. pork for Php220 and buy ingredients with the remaining Php240.00.
The definition of expensive is relative to everyone so determine what is your maximum amount for food expenses on ordinary days.
Final Thoughts
There’s nothing bad about spending extra money on different expenses just as long as it is within your budget. What is dangerous is not knowing where your money goes and ignoring tracking small expenses because you do not feel that they are significant enough. It’s not the amount that make the small expenses dangerous, but the frequency of spending.
Author Bio:
Kyle Kam is a Digital Marketing Specialist of MoneyMax.ph, a financial comparison website aiming to help Filipinos save money through diligent comparisons of financial products.
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