Several weeks ago, a fellow blogger messaged me, asking if I can share my top 5 frugal practices that help me save money. I thought of posting my reply here as well, plus some additional notes, so I can also share those tips to my blog readers.
As you can see in the title, I didn't simply focus on saving. Sometimes, spending is inevitable. In case you really need to spend, at least you've considered the less expensive approach. :P So here it is, my Top 5 Saving and Spending Tips. :)
1. Wants vs. Needs
Determine if the thing you want to buy is a want or a need. Wants can be deferred. Needs are the things that you need in order to survive (life or work).
2. Save first before spending instead of spending first before saving.
After getting your salary, set aside an amount for your savings (ideally, at least 20%). The rest will be used for monthly expenses. Track where you spend your money and identify which expenses can be reduced. Increase the savings part if still possible.
3. Know when to pay in cash, know when to take advantage of your credit card
When buying expensive stuff like gadgets and appliances, don't be shy to ask for the "cash price" or the "best price". You'll be surprised that some reputable stores can give you generous discounts. Just to give you an example, I bought an LG front load washer and drier in 2012, which has an SRP of 62,000 Pesos. Can you guess how much I got it because I was willing to pay in cash? 41,000 Pesos. Yes, 21,000 Pesos less, just because I mentioned the "secret words". Even on Apple products, you can actually get a 10% discount, if you can pay in cash. ;)
In case a merchant tell you that the credit card price is the same as the cash price, just use your credit card (if you have one) to earn rebates (provided you pay your credit card balance in full every month). Credit cards can also be used to avail special promos.
4. 3-in-1 coffee over Starbucks, home-cooked meals over fastfood
If you're already working, you'll save a lot of money if you make your own coffee (3-in-1 or coffee from the pantry) instead of buying from coffee shops.
I drink coffee twice a day. Assuming I spend 130 Pesos for a Grande sized Macchiato, that's 260 Pesos per day, 1300 Pesos a week, 5200 Pesos a month and 62400 Pesos a year!
With regards to home-cooked meals, you'll realize that buying budget meals from fastfood chains is still pretty expensive once you see the prices of chicken, fish, beef and pork in the supermarket. If you can cook, or someone else can cook for you, home-cooked meals is a way for you to stretch your monthly budget.
5. Wait for "Sale" events
In case your purchase of clothes, furniture and other stuff can be deferred, wait for your favorite mall or shops to go on sale. You'll definitely be able to save some money on your purchase. Aside from the usual discounts to items, some malls even give additional discounts during the first 3 hours.
I hope these simple and practical tips can help you save more money. Got other tips? Feel free to share it in the comments section. :)
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