the year 2015 opens with financial lessons
the start of 2015 is proving to be a challenge. currently, there is some work situation that can only be filed under 'tests and trials.' these challenges are both disheartening and enlightening.
without discussing what those trials are; let me list lessons that shouted at my face beginning of 2015:
emergency fund - for someone who loves to read finance articles and blogs, i sure am grateful that i am made aware of the value of emergency funds. generally, emergency fund is that amount of money put aside and only to be used during 'emergencies' and nothing else. emergencies that count include 1) sudden sickness 2) loss of income/job 3) disaster etc. most financial experts suggest to keep at least 3 to 6 months' worth of expenses as emergency fund. it should be kept in an instrument that can easily be withdrawn once there is an actual emergency - not before. building an emergency fund has helped me cope with the current situation. what is unfortunate is i didn't follow this soon enough. i only got serious late last year. thus, i failed to set aside at least 3 months. plus, i made the most grievous error of using what i've put aside to loan it to the company. the amount wasn't big, yet - it feels that it is only now in light of the unreliable cash flow, and with no other income stream. so, if there's a chance that you are reading this post by coincidence - i highly suggest that you don't commit the same mistakes i did.
Lessons: SAVE UP NOW!! start small, start big. it doesn't matter. what's important is you get started NOW. stop procastinating.
insurance - when i was around 23, i was diagnosed with a condition called 'adenomyosis'. it's not a life-threatening nor a debilitating disease. but in my mind, i could die anytime. thus, i had the forethought of getting myself insured. but at 23, my salary wasn't OK yet, so i postponed getting one until 2 years after. at 25, i got two life insurance policies from manulife. at 26, i got a third one from insular. the policy values weren't much, but i figured they were enough to at least help my parents with funeral expenses, pay for any obligations i might have had, and whatever remain could be theirs to enjoy. i figured, i didn't need a bigger coverage as i'm single and with no child to speak of. of the three, i paid off the third one in 2011, and just this month, 10 years after i got them, i made my last payment for one of the policies. now, i only have 1 policy to worry about. plus, if things take a turn for the worse; i could cash out one of the policies for its equivalent cash value - but is the last thing in my options, especially that with my 3rd policy - i'm already reaping the benefits of the insurance.
Lessons: GET INSURED - the younger, the better. DO NOT cash out, until necessary.
credit cards - last december, i got in to too much holiday spirit that i threw caution to the wind and violated my rule on credit card use: DO NOT SWIPE MORE THAN YOU CAN PAY FOR IN FULL. i thought it's december and there's 13th month around the corner. while there are many horror stories about people going into and getting buried in credit card debts, these stories are only applicable to those who don't know how to use their credit cards wisely, and i'm not one of them. anyway, last december i volunteered to have my personal cc used to pay for purchases for the company's christmas giveaways. i didn't have second thoughts of volunteering because i was confident that should i have my 13th month, i'll be able to pay my credit card in full, including the company's should it fail to pay. the company did pay in full, but i didn't get my 13th month to this day. so, obviously you can figure out what happened next: finance charge. UGGHHH!!! I HATE FINANCE CHARGES. i hate it more because FCs are not based on how much your unpaid balance is, but is actually based on the ENTIRE transaction for the month (at least, if i'm not mistaken). anyway, a huge finance charge is what i have to live with for violating my own rule.
Lessons: don't count your chickens before the eggs are hatched. stick with your own rules: you wouldn't have made them if you didn't think of their benefits to you.
without discussing what those trials are; let me list lessons that shouted at my face beginning of 2015:
emergency fund - for someone who loves to read finance articles and blogs, i sure am grateful that i am made aware of the value of emergency funds. generally, emergency fund is that amount of money put aside and only to be used during 'emergencies' and nothing else. emergencies that count include 1) sudden sickness 2) loss of income/job 3) disaster etc. most financial experts suggest to keep at least 3 to 6 months' worth of expenses as emergency fund. it should be kept in an instrument that can easily be withdrawn once there is an actual emergency - not before. building an emergency fund has helped me cope with the current situation. what is unfortunate is i didn't follow this soon enough. i only got serious late last year. thus, i failed to set aside at least 3 months. plus, i made the most grievous error of using what i've put aside to loan it to the company. the amount wasn't big, yet - it feels that it is only now in light of the unreliable cash flow, and with no other income stream. so, if there's a chance that you are reading this post by coincidence - i highly suggest that you don't commit the same mistakes i did.
Lessons: SAVE UP NOW!! start small, start big. it doesn't matter. what's important is you get started NOW. stop procastinating.
insurance - when i was around 23, i was diagnosed with a condition called 'adenomyosis'. it's not a life-threatening nor a debilitating disease. but in my mind, i could die anytime. thus, i had the forethought of getting myself insured. but at 23, my salary wasn't OK yet, so i postponed getting one until 2 years after. at 25, i got two life insurance policies from manulife. at 26, i got a third one from insular. the policy values weren't much, but i figured they were enough to at least help my parents with funeral expenses, pay for any obligations i might have had, and whatever remain could be theirs to enjoy. i figured, i didn't need a bigger coverage as i'm single and with no child to speak of. of the three, i paid off the third one in 2011, and just this month, 10 years after i got them, i made my last payment for one of the policies. now, i only have 1 policy to worry about. plus, if things take a turn for the worse; i could cash out one of the policies for its equivalent cash value - but is the last thing in my options, especially that with my 3rd policy - i'm already reaping the benefits of the insurance.
Lessons: GET INSURED - the younger, the better. DO NOT cash out, until necessary.
credit cards - last december, i got in to too much holiday spirit that i threw caution to the wind and violated my rule on credit card use: DO NOT SWIPE MORE THAN YOU CAN PAY FOR IN FULL. i thought it's december and there's 13th month around the corner. while there are many horror stories about people going into and getting buried in credit card debts, these stories are only applicable to those who don't know how to use their credit cards wisely, and i'm not one of them. anyway, last december i volunteered to have my personal cc used to pay for purchases for the company's christmas giveaways. i didn't have second thoughts of volunteering because i was confident that should i have my 13th month, i'll be able to pay my credit card in full, including the company's should it fail to pay. the company did pay in full, but i didn't get my 13th month to this day. so, obviously you can figure out what happened next: finance charge. UGGHHH!!! I HATE FINANCE CHARGES. i hate it more because FCs are not based on how much your unpaid balance is, but is actually based on the ENTIRE transaction for the month (at least, if i'm not mistaken). anyway, a huge finance charge is what i have to live with for violating my own rule.
Lessons: don't count your chickens before the eggs are hatched. stick with your own rules: you wouldn't have made them if you didn't think of their benefits to you.
Comments