Monthly Archives: September 2014

Top 3 Mistakes People Swamped In (Bad) Debt Have In Common

By Keng dela cruz

bad debt 1

Had met with a number of people asking for help how to go about their finances. Ok to be more specific, how to get out of their 6-digit-debts. Since I shared on one of my posts about helping a friend get out of her 2-year debt issues in 3 short months, it is usual that I get PMs and inquiries about how can they get out of their personal debt battles as well.

So I meet up or set-up a call with them and talk about it; others as far as Canada but mostly here in the Philippines. Some I know from way back younger years like elementary school days, some just recently – brave people who approached me and asked for directions.

How do we go about it? First, I will always ask if they feel comfortable talking about personal money issues on a very open level. Since I am a stranger to them, I am conscious that they might feel shy (nahihiya) or wants to keep things in private when it comes to money handling. Before engaging in the conversation, I make sure I explained the importance of honesty. For the simple reason that I wont be able to see where the money leak (problem) might be coming from and without knowing that, it will be difficult to assess the time duration of the way-out journey.

Summarizing, herbad debte are the top 3 mistakes people swamped in (bad) debt have in common:

1. They do not know (TRACK/MONITOR) their expenses. Their usual peg, “Money just goes through my hands” or “I don’t know where my money went”.

2. IMPROPER use and settlement of credit cards. Most people do not know that their credit card is requiring them to pay 3.5% per month, that is equal to whooping 52% in one year, compounded. You want to challenge? Try to use your credit card to buy “bananas” worth Php100 this month of Sep 2014. Don’t pay for it for 12 months and see how much your bill will be. At 3.5% interest charge, that is Php151.10 by Sep 2015, equivalent to 51% interest payment you have to settle.

With all honesty, I use my credit card for our monthly domestic necessities/expenses. But please take note: I pay the “whole” amount every month on or before due date so there is no penalty(interest) incurred. Why do I use credit card? For 3 basic reasons:

a. Convenience of one-time bill payment (I am all about schedules, saves a lot of time!)

b. Its easier to know (TRACK/MONITOR) what are my expenses (which is number 1 mistake mentioned above).

c. Takes advantage of of cash rebates (I love my Citibank cash back credit card so far).

There are other perks in properly using your credit card. Buying in installment, credible credit history, extremely emergency cases, online buying, cost of money, etc… But the keyword is “PROPER”. If you do not have the discipline, stay away from it. It can be your best friend or your worst enemy.

3. Not enough cash flow or simply said, living beyond their means. If you know how much you are earning, you know how much should go to your tithes, savings and necessities, then you know how much extra you have for spending. While I agree that you deserve to treat yourself, I also strongly suggest, you first look at your numbers. At the end of the day, it will all boil down to two choices: either you live BELOW your means or you EXPAND your means.

So far, most of the people I have talked to have either peace of mind since they passed through the challenge already or are still in the process of digging their own holes. Still they are happy because for the first time, they have seen light at the end of the long dark tunnel (the BAYGON for the creeping creature in their mind that keeps them awake at night).

Hey, we all deserve to have peace of mind and getting out and staying out of BAD DEBT is one happy state that can give you this prize!






Lost and Found – You are here!

by Keng dela Cruz

My ultimate winnings of yesterday? 2 things.
1. I started the day waking up beside my mom and dad; had a FULL good night sleep on THIER bed. NOT a usual thing for a 30+ lady with a family and kid of her own (hehehe).
2. I ended the day talking to a friend, solving her financial distress over credit card and budgeting issues. We were so blessed to have finalized her exit strategy from her debts and financial issues, and now looking forward to see what comes after.

And because I had so much blessings (if you know me by now), you know that means MORE TIPS for sharing!!! Kaya today, I wish to share with you a very basic GROUNDWORK if you want to fix your financial situation.

When you have a car and would want to go to a place unfamiliar to you, what will you do? (hehe, for the directionally-challenged people like me, I suggest) Go to waze, type your desired destination and NAVIGATE. But this will only work IF… you have TURNED ON your “location services”. This will show you 3 things.

  2. Which way to go.
  3. Your desired destination.

Same thing when you get lost in a mall; go to the maps of the mall directory. After checking what specific place you want to be, check your exact location showed as “YOU ARE HERE” markings.

Needless to say, it is important for us to know WHERE WE ARE to know where to start. This is also true in finances (and goals in life as well). If you don’t know, and wont give yourself the time to know where you stand, chances are it will be a DIFFICULT journey for you.

So the questioning begins, know 3 things.
What are your Assets, Liabilities and Net Worth?
(Big words? Accounting? Math? Kebs? WAPAKELS?)

Sorry to break it to you friends, these are the language of the financially literate people. If you want to get ahead financially, no other way but to know these terms. Don’t worry, I will try my best to explain in the grade 5 level, since my son is in Grade 5.

  1. Asset – something that PUTS money in your pocket
    In tagalog — DAGDAG PERA SA BULSA.
    (Thank you RK for making this SO EASY to understand!)

  2. Liabilities – something that TAKES AWAY money from your pocket.
    In tagalog — BAWAS PERA SA BULSA.

  3. Net Worth – Assets MINUS Liabilities (real measure of wealth)
    In tagalog — DAGDAG BAWAS, hahahaha!

Its so simple right? Go ahead, open your excel files and start breaking down your assets and liabilities then check what is left on your NET WORTH.

After all, ever since we were kids, our teachers always taught us that the FIRST step to SCIENTIFICALLY solve the problem is???

STATE THE PROBLEM – Because a problem can’t be solved if it isn’t understood.

Have a wonderful Morning to everyone!
Let the blessings pour down to you after ACCEPTING the reality and TAKING ACTION take hold of your life!



you are here