Are your finances holding you back from crossing the “buy a home” item in your wish list every year? These little changes in your spending habits might be the key.
Every year around this time, we jot down on a piece of paper a number of things we plan to accomplish for the incoming year, like losing weight, quitting some bad habit, or being a bit more adventurous. If your goal is to purchase a home within 2016, you might want to add another item to that list: spending smartly.
There are things you might be doing with your money that seem small now, but are actually taking a bite out of your finances when you consider the big picture. If you’re serious about finally securing a home, here are some examples of where you can save a little each day, which will add up to a lot in the long run.
Habit #1: Booking a ride to work
There’s no denying the convenience of using car-booking services like GrabCar or Uber to get from your home to work every day: you don’t have to walk far from your home to be picked up, it weaves in and out of traffic faster, and best of all, it’s all yours for the next half hour or so. On the other hand, this convenience also forces you to fork over an insane amount of money each day; a ride from the Ortigas area to Makati in a GrabCar during rush hour, for instance, can cost up to a whopping Php300, sometimes even more when it’s raining!
Best alternative: Take the bus or MRT. A bus commute from Ortigas to Makati costs more or less Php20, while an MRT trip costs even less. Commuting through these methods may be more of a hassle and they may force you to get up extra early each morning, but it’s a small price to pay (literally and figuratively) to buy your very own home one day.
Compromise: Scale back by opting for GrabTaxi, which brings your fare down to about Php150.
Habit #2: Grabbing a Starbucks every morning
Most of us can’t function in the morning without caffeine pumping through our systems, and to many, their first cup has to be from one of the many coffee shops found at every corner of the metro. Think a grande latte every morning at Php130 is too small to matter? Not when you realize that these daily runs add up to about Php2,600 a month! What more if you make a habit of grabbing another one during your afternoon break, and another after dinner?
Best alternative: Two words: instant coffee. Bring a coffee mug to work and learn to embrace the beauty (and affordability) of 3-in-1 coffee and your office’s water dispenser. You can choose from a variety of brands, and a week’s worth would probably still be cheaper than a single tall cappuccino.
Compromise: Limit your coffee runs. You don’t have to wean yourself off your precious frappe completely. By simply cutting your trips to coffee shops to about once or twice a week, your caffeine spending will be down to Php1,040 a month.
Habit #3: Lunching out
Now this is a tricky one. Unless you’re still living with your parents, bringing your baon to work might be too much of a hassle if you can’t find the time (and the skills) to prepare it in time, making eating out your most practical choice. The problem lies with the choices you make when opting for a restaurant. If you’re one of those who would prefer to eat something different each time and at a restaurant you’ve never tried before, you might be looking at spending at least Php150 per meal every day, or about Php3,000 a month.
Best alternative: As mentioned above, making your meals at home would be your most cost-efficient alternative. Buy fresh ingredients and cook large batches of different viands you can ration so you have meals you can freeze and reheat for different days of the week. If you cook pork adobo for six, for instance, a serving won’t cost you more than Php50 (and face it, adobo is one of those dishes that taste better as you reheat them, which means you’re all set for a few breakfasts or dinners for the week, too).
Not skilled in the culinary department? You don’t need to be Wolfgang Puck to sauté corned beef and cook rice for a simple but filling meal. No kitchen equipment in your apartment? No problem. Go to the supermarket and buy pop-tab cans of tuna or packets of ready-to-eat “ulam,” which you can heat up in the microwave at work, and buy rice from the cafeteria or a convenience store.
Compromise: Value meals were created to give you a full stomach without emptying your wallet. At your favorite fast food joint, a complete meal would average about Php100. Want an even cheaper option? Convenience stores like your friendly neighborhood 7-Eleven or Ministop offer rice meals and pasta too, and some even start at Php40.
Habit #4: Not saving chump change
You’ve probably done this before: you go out to buy something, you take a look inside your wallet, see change, and spend those while keeping the bigger bills for later. You’re probably thinking, “I’m not going to deposit just Php20 in the bank. I might as well just use it.” Some people have this notion that saving means putting a big amount of money in the bank, not knowing that setting aside the change you get every day is just as smart.
Best alternative: Whenever you have some spare Php20 bills or loose change at the end of the day, instead of spending them on trivial things or giving in every time your kid has his hand out, put it somewhere for safekeeping like a coin bank or a jar.
When you think you’re ready to take on a more challenging money-saving trick, try the 52-week money challenge: put Php20 in a jar one week, then Php 40 the next, then Php 60 after that, and so on. By the end of the year, you will have saved Php27,560. You can start as high as Php100 or even as little as Php1. You can even work in reverse: start by dropping Php2,600 in the jar in Week 1, Php2550 in Week 2, and end with just Php50 on Week 52. By then, you’ll have put away a total of Php68,900. Create a chart so you can keep track of your weekly contributions, and be consistent in adding to your little bank. And DON’T touch the money until the end of the year.
Compromise: There is no compromise on this one. Either you save money or you don’t. Because seriously, why wouldn’t you want a large chunk of a home’s down payment waiting for you at the end of the year?