Taking it from Scarlet

"As God is my witness, I swear I'll never go hungry again," so declares Scarlet O'hara in one of the rousing scenes of that great classic, Gone With the Wind. 

Unfortunately, it takes more than a classic line to ensure that one does not go back down that path of hunger. Fortunately, it has been proven and tested (personally, if I may add) that you can shout this line at the top of your lungs, mean it, and live to live it.

LIVE, for that is the essence of wanting not to go hungry again, isn't it? And as classic as the chicken and egg debate is, for you to be able to live fully, the only prescription (common sensical!) really is: Live within your means! 

Four words that can be interpreted in so many ways.  Is living just having to eat three square meals a day? Is it being able to send your kids to the best schools in town? in the country? in the world? What if you don't get to travel another continent at least once a year, are you living less of a life than your neighbors who could? 

Within your means is just as problematic. Our current woes - banks collapsing under the weight of unpaid debts (aka nonperforming loans or assets) among others - speak volumes about how liberally individuals have interpreted what within their means mean.

There is a song that says, Life is what you make it. YOU will have to define what life is for you. But remember, for each point, there will be costs (peso or dollar amounts or whatever currency you wish, you can use the currency converter in this site handily) attached to them.

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So it is said that if you know your enemies and know yourself, you will fight without danger in battles.
If you only know yourself, but not your opponent, you may win or may lose.
If you know neither yourself nor your enemy, you will always endanger yourself. 

(from The Art of War)

Living within your means requires discipline, and knowledge. I offer two specific pointers to you now to help you get by. 

(As this is the first prescription post in this site,  heed these: (1) that while definitely useful and relevant, you take my ideas at your own risk, and that (2) these are not exhaustive remedies, i.e. there may be other better solutions out there.  I write to satisfy my own caprices.)

1. Know your enemy. Literally. Figuratively.

I baffle myself at times, and I know this to be true for a lot of people, when in the middle of the payroll period, I stare at my bank balance and wonder where in Hong Kong or Manila or Asia my money has gone. It is a shameful thing to admit but it is true.  This is irresponsible! 

Towards attaining fiscal (a fancy word that really denotes just financial or budgetary) independence, it is imperative that we understand what our expenses (the items we spend money on) are. Rent. Tax. Transportation. Cellphones. Drinks. Drugs (Over the counter or otherwise). 

Write these expenses down. Use a columnar notebook. Or use Microsoft Excel or Lotus notes. Just write them down. Understand their nature. You will notice very quickly that some are recurring items with fixed amounts. Some can be avoided or reduced easily (drinks, drugs). Some cannot be anticipated (hospitalization, burial), while some are one time big time amounts (vacation in the US, buying that plasma tv). 

Once you get the hang of noting these down you'll see playing around, shifting spending schedules, can be lots of fun. 

One benefit of doing this is that with a personal budget of expenses you see over time (e.g. across 12 months in a year) which months you are tight on cash, and which months you will have a  surplus, when you can then plot additional expenses (getting that new laptop) all within your means.

How obsessive and controlling are you? Your answer here would depend if you want to track just the major amounts rounded to the nearest hundreds, or jot them down up to the last cents and last decimal place. 

Interestingly, I have observed that a big challenge to living within your means is the matter of appearances. Don't we sometimes just want to spend something more than we can afford because we don't want our nosy neighbors to say that we are one of the have-nots? Honesty is needed here.  You need to ask yourself, does your "enemy's" opinion really matter? The rational approach is to take the high road and live it real. Kebs. I have to say though, there are specific cases that it is ok to spend for show (hello, when you have to meet your ex-lover and his current beau!?!?!).

2. Know your friends. Literally. Figuratively.

If your expenses are your enemies, your sources of cash are your friends.  Let me correct that, your  sources of funding including credit cards, and the Philippines's Social Security System (last time I checked almost a decade ago they offered 12% annual interest on your loans, vs. 42% annual interest from most credit cards) are friends. The more friends you have, the merrier indeed.

And friends, real friends, that you don't have to show off to, can help. In times of dire and sudden cash needs, they provide a source of credit that are often interest-free. Suck it up. Swallow your pride and call them up.  There is of course a certain way that you must behave (at least if you want to borrow from me) that must be followed. Common courtesy I would call it, but this will have to be a topic for another post.

Sadly, friends can quickly turn into enemies so you need to track them too like you would your natural enemies, else you could get mired in credit card debts, foreclosure proceedings, or lost credibility with them human ones. 

MoneyMe

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