Alam ko medyo gasgas narin ang mga paalala namin para mag save at invest. That’s why today, let’s reward ourselves and talk about SPENDING.:)
Sino ba may ayaw ng latest gadgets, out of town or out of the country vacation, food trip, and shopping? I’m sure, aside from bills, education, and health expenses, ito ang madalas natin pagka-gastusan.
There’s nothing wrong to spend on these things. Ang importante lang, alam natin ang kapalit o “actual cost” ng mga ito. After all, ang perang pinaghirapan natin, hahayaan lang ba natin mapunta sa isang bagay na hindi worth it?
To explain the actual cost further, let’s take a look at this example.
Mark: The Latest Gadget Magnet
If not you, I’m sure you know someone who can relate to my friend’s situation.
Let’s see what we can learn from his spending habits.
Mark, 24, is working in the BPO industry. He earns around 20 thousand pesos a month. Since he’s single and living with his parents, he has the freedom to spend his salary on his guilty pleasures — the latest gadgets.
He recently rewarded himself for working so hard with the new Galaxy Note 3, which costs around P35,000.
Seems pretty fair right? It’s his money. Why not spend on things which he really enjoys?
The Actual Cost
Most of us are already immune by looking at the price tag. After all, it’s just a number.
But what if we look at it differently?
Going back to Mark who earns P20,000 and works 25 days a month, let’s see how much does he earn per day:
P20,000 / 25 working days = P800.00 per day
Sooner or later, I’m pretty sure Mark will get bored with his Note 3. He will probably get the latest IPhone5S which will be available in the Philippines soon at around P50,000. The actual cost to buy this phone is:
P50,000 / P800.00 (Mark’s salary per day) = 63 working days
That’s 63 days of talking non-stop to irate customers on the phone or 63 working days that he will come to work at 3am and go home by noon. If you’re Mark, will you spend 63 working days for a new phone?
Whether it’s worth it or not, only Mark can answer that. But, he should also be aware that it will not only cost him money, but more importantly it will cost him his TIME – which he can never get back.
Value for Your Money
The reason for this blog is not to make you feel guilty whenever you spend. But knowing the actual cost will help you decide and spend only on things that are actually worth it.
Let me reiterate: there is nothing wrong with spending your money on things you enjoy. If there is anyone who should enjoy your money, it should be you – you worked hard for it, you earned it, it’s yours, enjoy it! However, before you spend your money, make sure you get full value for it because the time you spent making that money is something that you will never get back.
I guess we can apply the “Kurot” principle in this scenario.
and they say gadgets are investments…
Panu naging investment ang gadgets when its value depreciates through time?
By earning money by using your gadget. An ROI with what you earn (not by salary, by using your phone) less than the depreciation. How? Sideline.
Very true.. actually my friend tagged his gadgets as Investment because he can earn when he sells them..not considering depreciation …
I really love your advocacy. I like what you said in the end about being aware of the actual cost & the importance of time. I guess that’s a lot like opportunity cost, right?
no 1 fans ako ng P&S , dito ako madaming natutunan. Tama. Ang sa akin lang “balance” , siguro gastusan mo ang mga bagay na maari mo gawin ngayun at hindi mo na magagawa pag tumanda ka na , tulad ng nasabi ,hindi mo na mababalik ang panahon. Ang importante masaya ka sa loob at labas ng kunsensiya mo.
ex. masaya kang bumili ng running shoes (mamahalin) kasi mahilig ka tumakbo , gawin mo yan . Kasi pag tanda mo baka hindi mo na kailangan yan , kahit kaya mo pa siyang bilhin . Pag bata ka pa , halos kahit na ano pede mong kainin , pag medyo ma idad ka na , kahit marami kang pera madami nang bawal.
Ang opinion ko lang , enjoy ka din ng pera mo , but pilitin na merong natatabi . Mahirap din sobrang tipid na ayaw mo man lang celebrate ang sarili mong birthday or debut , isang beses lang mangyayari yan at hindi mo na din mababalik ang panahon. Masarap din minsan maalala ang kahapon na ikaw ay nakangiti .
ruperto nambio says
Tama ka, dapat samantalahin ang panahon sa tamang pag-gamit ng ating kita. Wika nga, maging “discreet” “cautious” o “prudent”. Mahirap na ang mag-overshoot sa ating kita, pag-lampas ang pag-gastos sa kita, mapipilitang mangutang— mas maganda ang debt free.
nice to hear and share it for those people who valued their hard earned money, but pity for those people which the way of thinking are just to experience having it..
That’s what I do ,too!
I learn that trick from the book Your Money or Your Life that you should calculate how much you are spending on an item by how many hours you work- your Real Actual Wage by hour, if you are paid the hour or by day, if you are paid by the day. According to the book, to calculate your Real Actual Hourly/Daily Wage one should factor the transportation cost going to work and any job related expenses like clothing and de-stressing by going out because of your stressful job, that’s work related or going on a vacay to get a way from your stressful job– it’s all work related.
Since I know my Real Actual Hourly Wage, whenever I want something, I would then say ” Man, I ain’t working for a month just to get that! No way, Jose!
Don’t go with the bandwagon. That’s my rule.
Pierre Curay says
This is a great read and a great lesson. I think we can add at the bottom that how about spending that 50k in investments that can 5% (safer) gain or more than 100% (riskier). If you can double your money then you can buy your “luho”. That is how I dot it :). My money motto is to let your money work for you rather than you working for money.
There is only one rule to spending. Do not spend more than you earn.
Anyway if you are happy with your purchase, then it is worth it.
bhongskie Castillo says
sobra dami kong natutunan dito sa Pesos and Sence, sana maraming OFW pa ang makakita nito
christopher aquino says
Tama sarap mag basa ang daming learning at desame time madami ka din makikilala..sana lahat makabasa ng mga ganitong klase ng babasahin
your money equation should be
income – savings = expenses
The problem with most of us, the formula looks like this
income – expenses = savings
nagiging residual amount na lang ang pag save. Ang siste, pag malaki na expenses mo, edi wala ka na nasave. This is also a good way to control your expenses.
salamat sir sa mga timely advise mo.
kailangan din i-apply ang kurot principle dito.
maganda na magkaroon ka ng ganitong mga gadgets pero dapat kinurot mo lang eto sa iyong mga savings or investment. sabi nga nila “Huwag kang bumili ng mga gadget kung hindi mo kayang i-cash ang bayad mo.”
sana’y madami pang mga Filipino ang makakabasa neto.
This is very good article..
“If you spend money on things you dont need, soon you’ll be selling things you do need” -warren buffet
dahil sa kakabasa ng posts ng pesos and sense at sa kakanuod ng videos nila, hindi ko namamalayan na inaapply ko na pala yung mga natutunan ko sa pamumuhay namin ngayon…salamat! merry christmas
Roland Montero says
Not all people who spends on gadgets are also wasting their money since these gadgets can fulfill some of their needs. For me, I get my money for my gadgets from my earnings in the stockmarket and it is just a miniscule percent of what I earn from the investments…
But then, this article I would suppose is addressed to those who really does not know the value of money – ika nga – are you spending wisely or foolishly? and I agree with the author.