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Sunday, January 9, 2011

The Cash Culprit #1: The Credit Card and Mister Trilby

The Cash Culprit Series:
After partly managing my company’s money, and of course my own, I may be in a position to give modest financial advice, primarily on managing money.  I have to admit that I was a big spender in the past, confidently thinking that new money would always come. My salary, back then, was enough to indulge in any whim I had.  Those were the days when my date’s name was Zara, and I regularly visit my good friend Calvin and we would go hang out in Springfield but we wouldn’t be caught dead sitting on Bench or roaming around Gap. Those were the days when my friends and I used to think that Starbucks coffee was just an inch higher than Nescafe 3-in-1.  I would enter a restaurant and the waiters would know my name, even if a month had passed after my last visit.  A huge tip, I learned, could extend someone’s memories. 
That was in the past.  Friends have told me that I must have been insane to quit my job and go into semi-retirement, working only for fewer hours and being contented with a salary that I used to get 4 years ago. Well, that is another story.  I digress.
The question of the day is “Where did all my hard earned money go.” I look around my room and I can see some proof, but personally speaking, I wish I had managed my money well. I was so distracted and busy that I was not even able to buy the things that I promised myself I would buy once I had enough money, like a digital camera.  I used to stop at Hush Puppies and look at their shoe display. I used to say, “one day, I would bring those brown suede shoes home.”   If Audrey Hepburn had her breakfast at Tiffany’s, I had mine at Hush Puppies.  Fast forward, I still have no digital camera and brown Hush Puppies suede shoes. Nada.  But what really breaks my heart is that I was so busy that I was not able to take my mom on vacation.  All is not lost.  What I have now is something that is not quantifiable. I have experiences.  I learned so much about myself and my capabilities that I think that’s all where my money went.  I bought experience. 
Anyway, I digress.
Here’s my first advice.  Stay away from credit cards as much as you can.  Forget what other financial advisers may tell you. Believe me; credit cards won’t do you any good unless, of course, you are filthy rich.  However, if you are earning less than P15,000 a month and you have family financial obligations, the credit card is your enemy.   What about the status symbol a credit card gives a person? What status symbol?  I know friends who have credit cards with credit limit higher than the tallest building in Makati, and they have salaries that also go as high, but they still end up in debt.  It is not the amount of money you earn but the illusion those credit cards give you.  Get this to your head.  Your credit limit may be as low as P5,000 or as high as P100,000; but it is still not your moneyIt is the bank’s money. If you don’t use your credit card, then all is well.  However, the minute you start using it, you’re spending the bank’s money and they’re not your best friends, especially when you become late with your payments.  Banks will never say, “Pay me whenever you can.”   No, they’ll hire agents to do their dirty work and these agents will say “F*** you, when will you f****** pay your debt, you piece of s***?!”
Thanks to experience, every time I see someone with a credit card, I see a person living in Debtville, just along Denial River.  I am no longer impressed. 
Take my advice, stay away from credit cards. Start a savings account instead.  Remember this rule, if you can’t buy it now in cash, then don’t buy it.  One of the best pieces of advice I have ever heard comes from financial guru Suze Orman. She asked, “Can you afford your life?” If you get sick and you cannot work or you lose your job, do you have enough money to support yourself?  If a family member becomes ill, will you have enough money to pay for his or her medical bills, for a week, a month, a year?  Her mantra is “People first, then money, then things.” Invest on people and health.

Last year, I posted on Facebook that Topman grey melton textured trilby was one of the items in my Christmas wish list.  It’s a 1,300-peso hat.   Last December, I saved enough money to buy it for myself.  At the store, I put it on, looked at myself in the mirror. The 20something salesgirl told me I look good in it.  Then I asked myself, “Can you afford your life?” Slowly, I put the trilby back on the display rack. The salesgirl was puzzled.  She asked, “Sir, aren’t you going to buy it? It’s on sale.”  I wanted to tell her that I was going to buy something more important than a hat.  I want to buy my life back.  But since she was just in her 20s, she might not understand. 
So I just said, I changed my mind, and left the store silently humming “I traded fame for love without a second thought. It all became a silly a game. Some things cannot be bought. I got exactly what I asked for wanted it so badly, running, rushing back for more, I suffered fools so gladly. And now I find, I've changed my mind.” (That last bit is dedicated to the Transcendental Tourist, he knows where those lyrics came from.)
Bye Mister Trilby

CASH CULPRIT #3:  Your Brain is On Sale

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