The key to good financial health is to know when and where costs can be saved – you may be good at spending only within your means; you may pay off all your bills on time to avoid huge interest rates; and you may know how to stay within your budget. But in addition to all these good financial traits, if you know how to cut costs on expenses that are necessary, then you’re never really going to find yourself in the difficult position of debt.

When it comes to medical expenses, there are some that cannot be avoided and others that can be prevented if you use your common sense and take the right precautionary measures. Most families spend way too much on medical care than they need to, and if you want to know how to reduce your expenditure, here are ten tips that are sure to help:

1. Shop around for the best insurance policy – when you take time to select the best policy based on the needs of your family, you don’t have to pay more than you need to by way of premiums and you ensure that you’re going to get the best and comprehensive care if you fall ill or need hospitalization.
2. Pay up on your premiums every month without fail – even one missed payment could prove to be costly if your policy lapses and you meet with an accident or a child falls ill.
3. Ensure that your family eats healthy food – it’s cheaper and healthier to buy fresh ingredients and cook all your meals at home than to eat out or buy takeaway junk food.
4. Exercise regularly and make sure your kids are involved in a sport or in a physical activity like dancing, swimming or skateboarding. If nothing, get them out to play once every week; make a day of it in the park or at the beach with your pets and balls and Frisbees. The outdoors air is good for health and you also indulge in some much needed physical exercise.
5. Avoid smoking and drinking too much alcohol – you not only set a good example for your kids but also safeguard your health and prevent cancer, lung disease and cirrhosis of the liver.
6. Don’t self-medicate – even with OTC medicines that you think are safe, you could go horribly wrong when you mix drugs or when you’re allergic to a compound in them.
7. If your doctor prescribes medication, ensure that you follow the prescription to the letter – don’t stop taking your drugs when you start feeling better and don’t take them for longer than necessary.
8. Don’t abuse antibiotics – they’re very powerful drugs that can mess up your immune system and leave you prone to all kinds of diseases if you take them without a prescription or if you stop taking them for the recommended period of time.
9. Keep your medical records in order and be aware of hospital procedures and treatment methods to ensure that you prevent medical errors and oversights.
10. Consider seeing a nurse practitioner instead of a primary care physician – they’re well qualified, they tend to spend more time with you listening to and taking care of your problems, and they’re more cost-effective than doctors.

Note from Alma:

Living a frugal life is a choice.  What I would like to say is that not prioritizing medical needs defies frugal living.  The tips above intends to help you minimize medical expense as YOUR health and that of your family should and must continue to be a priority.

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Here are simple ways you can curb that anxiety:

Assess and Decide on what is needed before the month of May.

Make a list of ALL the school supplies needed.  Before making your list, I suggest you inspect your children’s old school items before deciding what needed to be replaced and bought. For example, I found that my middle child’s school bag still looked good as new.  One thing about me is that although we only have enough money to go around, when it comes to clothing,  shoes and other frequently used items, I prefer buying high quality items.  I inspected their shoes and school uniforms and decided that some of them are still good to wear for another year and some of my eldest daughter’s skirt needed to be repaired.  Setting aside all those that needed repair, I decided how many blouses, skirts, polos and shorts are needed for this coming school year.

Call School Admission a Month before Enrollment.

I always call my children’s school admission office to check for school fees increase and schedule.  This helps me decide on how much I needed to pay during the enrollment.  Its also advisable to check how much the book fees not to mention those dreaded miscellaneous fees.

Make a Plan.

If you have not done this yet, make a short financial plan.  This should all be broken down as follows:

1) School Fees, including miscellaneous fees

2) School Uniforms including P.E. Uniforms

3) School Supplies

In my case, since I have 3 children, I broke down my budget per child. Once you have added up all the possible expenses, I suggest adding 20% for contingency.

Next plan out how you will be able to pay for those expenditures.  In my case, I have started saving for my children’s school expenses last year.  I try to be at least 6 months ahead when it comes to saving for my children’s education.  I suggest you try to make the habit of setting aside a certain percentage of your monthly income for your children’s education.

Plot your Schedule on your Calendar.

Doing the above will help you curb unnecessary trips to the mall.  It will also help to check out the stores at least two months before shopping and decide where you wanted to buy the school items.  I have also learned that 2 months before June, malls begins there mid year inventory which means there will be huge sales prior to these inventories.  This might be the best time to buy those expensive yet durable black shoes and school bags.

Plan your shopping day wisely and never go to the mall on a weekend.  Avoid the crowd and last minute shoppers.  Spend enough time in the store of your choice so you can still do a quick price comparison. When doing your shopping, stick on your list and let your budget known to your children.

Buy in Bulk for the Whole Year.

In my case, since I have 3 children in school, I save more money buying school supplies in bulk.  Instead of buying one pencil for each child, I opt to buy one box of pencils instead.  The same goes for crayons, markers, notebooks and paper.  Place these supplies somewhere where your children cannot touch them.  I have a school supplies cabinet in my house.  Children can make requests for supplies when necessary only.

So,

If you have done those necessary steps mentioned, you should be able to survive May and June without breaking the bank.  It is also essential to include your children with your planning so they will understand whats vs needs.  Shopping with children does not have to be stressful especially when they know you are hell bent on sticking to the list.  As always, remember to reward good behavior!

How did you do this month by the way?

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If I do not start saving or setting something aside for myself today, how will my financial health be when I am 52?  So if you have learned the power of writing things down, then you must begin today.  I have learned that to get clarity and purpose, it is imperative to write things down.  It helps me gain perspective.  It also make planning for the steps necessary to reach those goals.  Whatever those are.

So if you are like me, a separated woman with several children to raise, then you might be scared shit like me, but hey, never allow fear to hinder you from making and implementing your plans for financial independence and stability!   There are simply alot of places where you can cut corners.  Some purchases are not necessary… remember that silly bag you bought last month?  Where is it now?  At the back of your closet, I bet!

Anyway, before I digress on useless purchases, here are some tips that I have learned to live by:

1. Buy Used.

Knowing what kind of daily comforts you can and cannot live without.  This reminds me of a purchase that my parents made years ago.  They bought this heavy-duty microwave oven that cost more than the usual ovens.  They hardly use it and the thing ended up useless on the cabinet.

You will definitely save more by buying used.  I like buying my books from places like Book Sale and although I buy books from Amazon, I like buying those used ones.  I also save cash by buying used DVDs from ebay.

I have a huge stance on buying used clothing.  I tend to buy high quality clothing for myself and the children.  We seldom shop now, but I noticed that it is still best to buy high quality clothing on sale than those cheap ones that break after a few months.

2. Always Pay in Cash.

This reminds me of several relatives who kept on telling me that I should buy a car.  I told them, I do not have enough to buy one in cash and they said, who told you you need cash?  Just put a downpayment and pay the rest for 3 years!  This is one of the reasons why alot of us are in debt.  If you cannot buy anything in cash, then it means you cannot AFFORD it.

Two months ago, my Macbook died.  I took  it to the Mac Center and I was informed that I fried my hard drive.  A replacement cost more than P4,500.  Not only that, my RAM needed an upgrade if I wanted the latest Mac OS– another P1,500.  And it did not end there, my battery needed replacement as well.  How much is a battery?  P6,590.  Not cheap.

So what did I do?  I have only budgeted P3,500 for the repair.  So, I PRIORITIZED the repair and had the RAM upgrade first.  The Mac technician told me, “Maám if you have a credit card, you can charge the rest there so I can fix everything in one go.”  Although I have one CC, I told him, that I dare not charge anything.  I will be back next week or so for the rest of the repairs.  Know what??? It took me a month and 2 weeks to save for the HDD and the battery.  Did I regret the delay?  No!  Just think of the worry free nights and the no-freaking out-during the 1st of the month when the credit card bill is delivered on your doorstep.  It was definitely worth the wait…

Unless you have a good credit standing and you are like my friend Bing, then you can always use credit cards for emergencies.  But you need to be careful with credit cards.

3. When Making a Budget ALWAYS Include Contingencies.

Make a budget and stick to it should have been the first tip, aye?  But sometimes, we forget to include contingencies when making a budget.  More often, you ended up finishing most of your pay every month.  Not good.  Cut corners and allocate some cash for emergencies.  After a year of setting aside for contingencies, you will thank me, I swear!  It does not matter how small, but you have to start somewhere.  It could be as little as P1,000 per payday.  That’s already P12,000 in a year!  Think about it!

4. You Don’t Have to be Rich.

One of the things I am proud of today is that I am debt free.  Although I do not have alot of savings, I realized that that is better than living a life in debt.  Ofcourse some of you might have the knack of using credit wisely but some are not that lucky.  Think of snowball effect.  Once you are in debt and you fail to pay off your monthlies, these would snowball and the next thing you know, you’d be in debt neck deep.  Not good.

You do not have to be rich to live comfortably.  The rule of thumb is this.  Be happy with what you can afford and ALWAYS live within your means.

5. Be Willing to Make Do.

Living a frugal life is a lifestyle change.  You needed to be able to learn to make do of what you have.  I believe that frugal living is not a life of depravity. This lifestyle is obviously not for everyone.  Let’s face it, there are lots of things that are completely out of your control, but what you spend on is something you CAN control. Learn to say no and make do!

What Now?

Everyone has different ideas of what frugality is.  But to me, being frugal has kept me out of debt.  It has helped me teach my children that saving for things they wanted is a good thing.  Not only are you teaching your children how to handle their cash flow, but to me, this would also help my children to harness their creativity.

Nothing beats planning, budget and saving for your future.  If cashflow has always been a problem for you, then you needed to change your attitude and mind frame in order to live and stick to it to be able to live a life free of worries and debt.

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We live in one of the richest countries in the world, but with the economy in turmoil, having a baby is becoming more and more of a financial challenge.  We always want the best for our baby without compromising safety and quality.  As my husband and I are slowly preparing to become new parents, we are slowly discovering smart money-saving techniques to help us in this tight economy.  Here’s some of them:

1.  Choose the best insurance coverage and get covered. Giving birth to a child is not cheap.  Here in the US, normal childbirth costs without insurance and without any complications would range from $10,000 to $13000.  If there are any health complications for the mom or the baby, that cost could spiral up to $150,000.    My husband and I are both fully employed and have good medical insurance coverage.  When we got married and decided to become parents, we had to put everything on paper to find out which insurance coverage will give us the best bang for our buck.  My company has a PPO (Preferred Provider Organization), while my husband’s has an HMO (Health Maintenance Organization).  There are advantages and disadvantages to both, but in the end we ended up going with his HMO since the premiums are relatively cheaper and it provides very good maternity coverage.  You can read about the comparison between the two from About.com.

The trick is, before renewing our coverages, we made sure that we put everything on paper and did the math.  We took into account all the money we needed to spend during the whole pregnancy journey, not just the money we will be spending during the time when I am in the hospital giving birth to our child.  My husband’s HMO insurance included free ultrasound for all prenatal visits, free yoga classes, and free childbirth education seminars.  I thought it was such a great deal because if we were to avail of these services elsewhere, we would end up spending $5000 more.  Plus, staying healthy during the whole pregnancy will prevent having complications which consequently leads to more hospital time and more money spent.

2.  Before buying baby stuff, do the research and be a smart shopper.  In buying baby items,  our first step is making sure that these items are safe.  One of the websites that we visit to do our research is the US Consumer Product Safety Commission.  Customer reviews also help. But I look for unbiased opinions.

Once we are certain about an item, we look for it in specialty stores like target and babies r us to be sure that it is really what we want.  We note down the price, then go online to find out if we can find a better deal.  Normally, we would find good deals at Amazon or Craigslist.  If you do go this route, don’t forget to include shipping and taxes in your computation.  Sometimes it is still better to go to the store.

3.  Use credit wisely. I have 4 credit cards, but I only use  2 of them.  Both have rewards points on them.  I pay them in full every time, so I never get to pay interest or late charges. What’s best about it is I accumulate points for every dollar I spend which can later on be exchanged for gift items, free hotel stays and free airline tickets.  Before giving birth to our child, I have planned a “babymoon” for me and my husband using the points I’ve accumulated through my credit card.  We have a monthly budget for food, gas, etc.  Instead of using cash to pay for those, I pay it with my credit card and rack up the points.   Then we use those points for entertainment.  So technically, we pay nothing for entertainment.  Plus, we get to improve our credit score by using credit wisely.

4.  Go online to get educated.  Getting educated about pregnancy and childbirth is one of the best tools that any new mom can have.  But it doesn’t have to cost anything.  If you do not have the money to spend for Prenatal information classes or pregnancy books, you can always get those information online.   Two of the best websites that I go to is My Baby Center and The Bump.

I am one of those people who sometimes prefer print media over online media.  Sometimes I have to print out articles to read them instead of reading them from the computer.  If you are one like me, you may want to get free magazine subscriptions.  Here are 2 magazines that are very informative and are given out free: here and here.

5.  Do not spend too much money on maternity clothes.  Being pregnant doesn’t mean you have to be ugly, but it also doesn’t mean that you have to spend ridiculous amounts of money on clothes.  I was surprised to find that bargain stores carry maternity clothes.  Two of my favorite bargain stores, Marshall and Ross, have a maternity section.  Instead of spending $30+ for maternity pants at a regular maternity store, I spent $15.   On my big shopping day, I walked away from the store with 4 items: 2 tops and 2 pants and only spent $50.

It’s easy to save money even with a baby on the way if you look in the right places.

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On my Mac, I use Ecto to plan and write my entries. What is great with Ecto is that it is pretty straight forward although there was an instance that I lost what I have written once. No idea what happened, but it just went kaput. Anyway, life is good and I am happy that although I have not updated my blog for awhile, I have been receiving alot of traffic specifically my entry, Why I keep my money in FICCO . I am happy that FICCO has been gaining alot of attention and more and more Pinoy are thinking of putting their money in cooperatives.

Due to the demand of information about how you can keep and maintain your savings in FICCO, I will be posting more information laden entries about FICCO, the benefits of signing up as a member including their non-banking services offered. Nonetheless, I intend to write more frugal tips on the coming weeks, including the lessons learned everyday.

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To encourage my children and get them to learn how to save their own money, I give them P50/weekly allowance each.  My eldest daughter I observed is more aware of her spending.  Instead of buying snacks in school she would ask me to make sandwiches for her and even brings her own water or juice in a bottle along.

First Community Cooperative  (FICCO) is a cooperative which originated in Cagayan de Oro City.  It is one of the largest and a fast growing cooperative in the Philippines. From its very humble beginning, within the confines of Xavier University, it has now extended its reach throughout Mindanao. This effort is based on the belief that FICCO is a variable and beneficial product which can benefits the locals here in Mindanao.  FICCO now has twenty five offices spread in Northern, Southern and Eastern Mindanao. And two more branches are coming up in Bayugan, Agusan Sur and Maranding, Lanao Norte.  FICCO now boasts of almost 97,000 members, resources of P 2.1 billion, and share capital of P 830 million.

According to Isagani Daba, FICCO‘s Chairman of the Board, the reason why the credit unions in the US has survived and thrive amidst the economic crisis in the US is due to the fact that cooperatives normally don’t hold many of the investments that are poisoning financial institutions.  Ofcourse being a member of FICCO would give me more advantage as members are offered health insurance, hospital coverage and benefits, and granted emergency loans to name a few.

Although I am not a member of FICCO yet, I have opened several accounts with them including Time Deposits because of their high interest yield compared to the local banks.  Not only that, the minimum requirement to open a TD is only P1,000.  This is really very encouraging to low income earners like me who wanted to start saving. With as little as P100, you can actually begin your saving accounts.

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The problem with us Filipinos is sometimes were are too touchy and be tend to avoid discussing money issues even among families.  I was born in a very traditional home where my parents never discussed money problems with us children.  I have brought that up with my father years ago and his response was that he didn’t want us to be aware of any money issues because he can take care of that himself.  He said it with so much pride and even with dignity that I did not have the heart to argue and voice out my thoughts.  What’s the point?  The important thing is that I did not want to pass that kind of behavior and attitude towards money to my children.  That as a parent, I needed to be aware that I owe it to my children to prepare them and mold them to be responsible people.

So where should you start?

Give them an allowance. By giving your children an allowance you are giving them the chance to learn how to manage their cash.  For them to be responsible, discuss and inform them your expectations.  Ie, that if they finish their allowance before Friday, there is no way you are giving them more spending money. Be firm with your rules and enforce them.  Be firm and consistent.  Sometimes children both young and old can be crafty and absolutely know how to manipulate you or the situation  to their advantage so they can get more cash from you.  But as soon as they realize that you are serious, then they hopefully will not waste more time thinking of schemes to get you to increase their allowance but instead would put more effort on how to spend their money wisely.

Help them open their first savings account.  I took both my daugher to the local cooperative bank.  Since it is FICCO, I shelled out P150 to open their first bank account.  One of the advantages of opening an account at the local cooperative than the local banks is that the minimum amount required for opening an account is lower but the interest rate is higher than the local commercial banks.  Currently, the minimum amount required for a kiddie account in FICCO is P50.  They filled out the forms themselves.  I also taught them how to fill out the deposit slips and my daughters excitedly handed over their deposits slips with their new passbooks to the teller.  It was momentous and it has been months since their second deposit.

Reward achievements with money.  This is something I have learned from a close friend.  Betty said that one of the ways to help children to be responsible with money as well as strive higher in school is to reward them with cash.  I know this is dowright controversial.   According to child psychologist Sylvia Rimm when it comes to high-achieving students, money doesn’t matter. And, Rimm says, kids who are underachievers fail because they’re inconsistent. So if they slip and get a poor grade, they figure that they’re not going to get the reward and give up. Even worse, parents sometimes end up paying them for half measures and the system backfires.  I have read several blogs that has ranted against this kind of rewards system, but lets be honest, when you do work hard at work, you do get compensated with money, and one way for them to strive better in school is to reward them monetarily.  Anway, to stay true to my own rules, I rewarded by daughters P500 each for making it to the honor roll.  I told them that if they get better grades next year, they will be rewarded double.

Being Filipino, I noticed that parents usually reward achievements by rewarding children with food or toys.  I find nothing wrong with this except that we are teaching our children that when they get good grades we needed to give them toys, gadgets and such.  Bottomline, we needed reinforce good behavior and be able to create a good link between performance and compensation.

The earlier we instill the value of money and the importance of saving including the need to wait and patience before spending money is imperative.  My children has taught me that children are indeed ready to learn about money as soon as they’re old enough not to swallow it. And increasingly the evidence suggests that we shouldn’t wait to begin teaching them.  It is the habit of saving is one of the important money lessons that we needed to teach our children.  According to Sam Renick, a former financial services executive whose company, It’s a Habit, publishes money books and music for kids. Parents need to push back against those messages, he said, and teach kids the basics “before they’re too cool” to listen.

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I am still busy with Freelance Work, but Pinoy Frugal Living will certainly get back on its feet a few days from now.  Expect more frugal tips, review on productivity tools, personal finance hu-has and my stories relating to rural life and the financial challenges of a just-separated mother of four.

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1. Beware of scams. This is so obvious. With the wake of recent financial scandals in the US causing major collapse in finance related companies, not ot mention the collapse of CAP and Legacy Group. Be aware of scams and stay away from to-good-to-be-true deals. There are 3 ways you can do to ensure you never fall and become a victim of fraudsters. First, if you have a financial advisor, never issue a check directly to him nor give custody to your assets to them. Second, never give your advisor a Special Power of Attorney over your bank accounts. Third, insist on getting monthly statements from the custodian (place where your trading accounts are held) rather from your advisor.

2. Do not dare predict the future. I do not think there is a sure fire way of predicting the future. No one can predict the future, do don’t try or you’ll just drive yourself nuts.

3. Invest 5-10 minutes a month and know exactly how much you have spent. Just track your total withdrawals from your accounts, chargings made into your credit cards with your income. Get everyone in the family involved. It would be easier this way. Not only that, you would be teaching and showing your children how to manage household finances.Getting their involvement will also make explanation easier in case you needed to do some cost cutting in order to make ends meet.

4. Do not withdraw too much from your investments. According to CFP Neal Frankle from Wealth Pilgrim, if you have a balanced portfolio, it’s generally safe to withdraw 4% to 5% annually. If your accounts have taken a hit over the last 12 months you have to re-evaluate your withdrawal rate. Just because you could safely take let’s say P15,000 a month out of your account 12 months ago doesn’t mean you can safely do this now. If your withdrawal rate is too high, you run the risk of running out of money faster. If your accounts have dropped 40%, your withdrawals may have to be reduced.

5. Take time to understand your investment time horizon. It’s easy to be very anxious about finances these days – but it may not be necessary. Let’s say if you are 60 years old, and you intead to retire next year, you may take away or withdraw 5% of your investment account just to make ends meet. If you are female, you can expect to live another 20 years! You have to consider and ask yourself if your money will last as long as you will. If you think about it, a person in this situation really have plenty of time to invest and work on your own portfolio. Just because you are retiring next year, doesn’t mean your investments should. Your money still has plenty of years to work for you. Make sure you don’t squander those years by allowing your money to lounge around in low-paying investments.

These are all easy and common sense steps. If you take the time to protect yourself, refuse to try to predict the future, track spending, make sure your withdrawals are appropriate and understand your investment time horizon, you’ll be far ahead of the game. More important, you can eliminate financial anxiety.

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