Financial Wake Up Call

My husband resigned from his job last August with a replacement job whose start date was unclear at that time. We had no worries since we knew we could get by with my salary and would just make some adjustments in our lifestyle and make some sacrifices. By sacrifice I mean no eating in pricey restaurants, no watching movies in expensive theaters (good thing there weren't any great movies lined up during those times) and no unnecessary purchases.

But the actual experience made me realize that I need to look into my financial health, or the lack of it, and wake up from my financial slumber. The wake up call became even louder when while I was reading my yahoo email, I stumbled upon a very interesting article entitled "10(more) Reasons Why you are not Rich" http://finance.yahoo.com/banking-budgeting/article/105934/10-Reasons-You. Although some of the reasons stated there are not applicable to me, but a few reasons really hit home.

The first reason that hit me was Reason # 2: You Feel Entitlement. My version of this reason is my addiction for Starbucks coffee. I soooo loved a cup of Starbucks Mocha Frap, Coffee Jelly or Iced Caramel Machiatto that I never end a work day without consuming a cup. I felt I was entitled to the over priced designer coffee because I was working hard and I deserved it. Don't get me wrong, I still love a good cup of Starbucks coffee but I stopped buying it everyday. Now I just visit the nearest Starbuck whenever I meet up with my best friends every now and then. I save an average of 140 pesos a day since I started abstaining from the designer drink.

The second reason that struck home was Reason # 7: You Buy Things You Don't Use. The first thing I did the night I got home after I read the article was look into my closet and drawers. I saw all the bags I bought but I rarely use. Then I checked my shoe racks and saw all those shoes that I also rarely use. I found out that some of them just needs a trip to the shoe repair shop before I could use them. I also threw out a large bag of old shoes that were already unusable. The article made me Clean House so to speak. It was that compelling. It was also the day I found out I had 6 pairs of flip-flops. I never knew I would own so many. So what I did the next day was use the bags I rarely use to feel that they are not wasted money. Haha!

This experience made me remember a famous quotation in the book Rich Dad Poor Dad by Robert Kiyosaki which is "Pay Yourself First". This made me think. How could I pay myself first? What are the steps I should take to make me pay myself first? I was in the right direction with applying reason # 2. In order to pay myself first, I stopped buying expensive coffee everyday. Then the next step is to set aside a certain percentage of my salary every month and then be disciplined enough to not "dip into this savings" as the author of Rich Dad Poor Dad put it. I just wish I prove to myself that I am disciplined enough to do this. We'll see in next year if I manage to discipline myself. I just pray that no major illness or financial problem befall my family because this will totally change everything.

I was encouraging my financially challenged co-workers to do the same. I have managed to inspire one and I hope together we remind each other to pay ourselves first every pay day so we can successfully increase our savings. I told her, pay yourself first and don't procrastinate any longer. Because the more you delay it the harder it will be to start. Pay yourself first even if it is just small for now because it is what you can only afford right now. The amount actually doesn't matter at the start. What matters is to learn the discipline to pay yourself first. To help me carry this out, I set out a target amount of what I want to reach. Then I gave myself a time table. Within one year I plan to save X amount of money in my savings account. With this in mind, at least I have finally set a financial goal so it will help me focus and not stray and give in to my shopaholic and impulse buying spree.

It is also important to have a very strong sense of purpose why you want to be financially healthy. Mine as I realize it now is because I do not want to be working as an employee until I get old. I also want to get out of the so called "Rat Race" while I'm still able to enjoy the fruits of my labor so to speak. But don't get me wrong, I don't see the rat race as something disgusting or utterly evil like some extreme minded person. I see the rat race and being in the rat race as a means to get out of it. This is by applying the "Pay Yourself First" principle and by making small sacrifices now then reaping the benefits later.

If you who are reading this post is also in the rat race as I am, I would like to encourage you to use this situation and start your journey with me to get out of the rat race. In the near future I will make another post and will update you on the status of my financial health. But if you ask me, how will I measure my financial health? There is a simplified answer to this question although there are more complicated answers as well but I believe in simplicity. You can measure your financial health by simply counting the number of months you can survive without your current job. If your answer is I cannot survive at all or I can survive for 1 month, you are financially sick. Surviving for 2 - 3 months, you are slightly sick. An acceptable figure is if you can survive for 6 months. As of now I can only survive for 2 - 3 months without my current job so as per my simplified measurement version, I am slightly financially sick. I hope to heal my finances in the next year so help me God.