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Hey, everyone! Happy Monday morning!
Here’s hoping your Monday is fine, making me the only person in this world to hate Mondays!
love to shop more than we want to save.
After all, saving is a boring necessity, while shopping is an exciting
adventure. We are actually proud of
something when we get great items at cheap prices. This is why we frequently hear these kinds of
ng shoes mo!” (Wow, you really have nice shoes)
at 50% off! (I got it at 50% off!)
should talk more about saving. After
all, I also love shopping and I’m also proud of it when I get great finds. So, instead, I’d like to share with you a
concept that can help you become a better spender. In this post, I’ll be focusing on HOW you
spend, rather than WHAT you buy.
“Spending Efficiency”. Basically, it is
a measure on how well you’re spending each peso that you have. For each financial transaction you make, you
have a corresponding spending efficiency.
A high spending efficiency means that you’re a good shopper, while a low
one means that you’re paying more than what the item is worth (in other words,
you’re at the losing end of the financial bargain.
it is used. A bag is being sold at
P1,000.00. There is a sale on-going and
you bought it at 50% off for P500.00.
getting twice as much value for the peso you spend. You should be proud of spending at that
efficiency level! (Bongga! This is saving me from the guilt of buying that bag on sale I got after watching Catching Fire!)
worth. If the jeepney fare is P6.50,
then we pay exactly P6.50. If the
Sulit-Value meals are P49.00, we pay exactly P49.00 for it. For our basic necessities, we have been
accustomed to spend at 100%
efficiency. This is the minimum level of
efficiency that many of us find subconsciously comfortable. So when it comes to regular expenses, there
isn’t much to talk about when it comes to spending efficiency. The fun starts when it comes to the big
a spender” is put to the test. So for the
rest of this post, I’d like to give you 3 more examples on spending efficiency:
home entertainment system this coming Christmas as a gift for the
family. She takes the family out to the
electronic shops in the mall to check out what the younger kids (and the older
kid that she married) wanted. They went
to different shops until they found an entertainment system they simply
couldn’t resist. The details were as
Ultimate Home Family Entertainment Bundle:
- 50-inch Flat-Screen TV
- Blu-Ray and DVD
Player (with a Free Blu-Ray
Disc of Avatar)
- 5.1 Surround Sound
Package (with a controller and
- Free Home Installation
of all, at the bottom it read:
- Only for P60,000
- Flexible Payment:
- Terms: Pay P5,000 only
for 12 months.
it. The kids were just excited at the
brand-new TV and entertainment system.
It was a very nice trip to the mall.
entertainment store to purchase the Ultimate Home Family Entertainment
system. The sales clerk asked if she
would be paying for it in cash (which would bring the price down to P55,000.00
only). She decline the offer, and gave
her credit card and asked for the 12-months payment scheme. After a couple of minutes, she was informed
that the entertainment system would be delivered and installed in her home
within 3 days time. Marie went home that
day excited with their great purchase!
worth. So she inefficiently spent 8.4% of her money in buying the
entertainment system. So is Marie a good
shopper? Well, that’s for you to
decide. However, in terms of efficiency
alone, Marie is not spending well.
Pag-IBIG Home Loan. The financing terms
he got was thirty (30) years to pay translating to amortizations of P14,654.00
per month. Now, we’ll skip the
story behind the transaction and just go
straight to the spending efficiency of Mario.
getting a house when in the end you’re losing almost 80% of your money?
kid. In 15 years, he expects that he
will be needing P5,000,000.00 in total for the tuition fee, allowances, school
materials and other miscellaneous expenses.
Norman also assumes he’s spending all of the P5,000,000.00 whether it’s
consumed or not. He’ll just probably use
the excess as a graduation gift to his child.
only needs to set aside P10,008.00 per month and let it grow at round 13% per
year with the stock market. So he
dutifully set aside P10,008.00 per month into the stock market for the next 15
his stock market account. Now with this
transaction, let’s get Norman’s spending efficiency.
able to get almost 3 times more bang for each peso he had. I’d say, he’s an amazing shopper for his
kid’s college education!
wondering how efficiently you’re spending your money. Are you powerfully maximizing each peso you
have by spending at more than 150% efficiency?
Or are you getting ripped off with 50% efficiency?
and College Educations, it can easily be applied to your travelling and
shopping goals. Instead of that
P5,000,000.00 being spent on education, it can as easily be spend as a shopping
fund, or a travel-the world fund! What
I’m saying is you should try simply to increase your spending efficiency,
regardless of where you spend it.
check out J3’s free online seminar series called: Take the Leap, Invest Within the Week Free ito, mga sis!. Within 5 training videos, you’ll be ready to
invest safely, conveniently, and profitably in the stock market.
Club and I am thankful of the boundless knowledge, wise words, and information
from Bo and other Truly Rich individuals.
You can be part of this wonderful club by joining here.