Frugal Pinoy

Free Download: Frugal Pinoy Budgeting Spreadsheet

2009-11-10T19:52:29Z

I made something special for you, Frugal Pinoy readers. It’s a spreadsheet that allows you to budget your money, track daily expenses, and track your income as well. Here’s a screenshot of it:

I made it with Open Office Calc, the free alternative to Microsoft Excel. I’m not sure if the file will work with Excel, so you might have to download Open Office first if you don’t have it yet (click here for the website). I’m sorry that I don’t have a version in Excel, since I don’t have a copy of the program. You’re free to convert this spreadsheet into an Excel file, though, if you know how.

To get the spreadsheet, right click the link below and click “Save target as” or “Save link as”:

Frugal Pinoy Budgeting and Expenses Spreadsheet

The spreadsheet may be a bit confusing, so I made a tutorial video (presented in Tagalog - thanks for pointing it out dyoonet!). It’s 16 minutes long. If I’m explaining things too fast in the video, you can pause it and play it back. To see it in detail, you can view it in full screen by clicking the button on the bottom right of the player below.

To make sure that the video plays smoothly, play it first with the sound off so that the video loads completely. Then, watch it with the sound on.

If you have any questions/feedback about the spreadsheet or the video, feel free to comment below.

Do you use a spreadsheet to track your income and expenses? If so, share your tips with us.

Bookmark to:

Affordable Solar Power: Looking Beyond Panels

2009-10-16T04:59:55Z

Lately I’ve been thinking about what I can do to lower our energy consumption at home. We don’t have many appliances, but if there’s a way I can lower my bill and lessen my home’s negative impact on the environment, I’d love to try it. This made me consider using solar energy.

When people think about harnessing solar energy, the first thing that comes to mind are photovoltaic panels — but this is hardly the best choice.

Here’s the problem: First of all, most solar panels are not that environment-friendly. Some use a very rare metal called indium, and if we continue to use indium at our current rate, we’ll only have a 10-year supply of it left.

Using solar panels to power your home can also be impractical. You’ll need several modules or panels to produce a workable amount of electricity, not to mention the space to hold them. Plus, they are just too expensive for the average Filipino consumer.

We have to look at solar energy from a different angle, then.

Solar Ovens

One way to utilize solar energy for your home is to build a solar oven. Basically, these ovens run on nothing but the light and heat of the sun. Here are the advantages of doing this:

You can’t burn anything. Soft vegetables may overcook though, if left in too long, but this just means they have to be the last thing you’ll add.
It reduces your LPG or electrical consumption used for cooking, since you’re directly using solar energy to cook.
It uses less water. Since the cooker is enclosed, moisture is retained in the food, it doesn’t evaporate. Usually, you don’t need to add extra water to your meat or vegetables.
It’s environment-friendly. No harmful emissions and pollutants result from using this oven for cooking.

Solar ovens also have a few disadvantages.

It takes longer to cook with a solar oven. This means it’s not a good setup if you’re in a hurry to eat. Because of this, cooking this way is only ideal for lunch, merienda, and dinner (to be reheated later). To shorten cooking time, set up your oven as early as possible and cut your meat, fish, and veggies into small pieces. If you’ll be cooking a lot of food, it’s better to use two or more smaller pots than one large pot.
Some cookers need to be adjusted to face the sun every half hour or so. But the effort of that is minimal compared to constantly watching your meal on a stove.
Of course, you can’t cook this way during the evening or cloudy or rainy days.

Here are some additional resources on solar cooking:

The Wikipedia article on solar cookers provides a good introduction.
Solar oven do-it-yourself plans from SolarCooking.org. For something large, check out the cob solar oven (PDF). If you want a portable solar oven, try this collapsible one.
A list of common questions about solar cooking at the solar cooking wiki. (Explore the rest of the wiki. They’ve got a lot of handy instructions there.)
Some video demos in YouYube:
- Solar oven pot roast - the guy in this video just used two glass bowls and a large plastic screen.
- Solar box oven cooking in the winter. Pretty inspiring. Kung pwede magluto ng roast chicken (at 300+ Fahrenheit) via the sun during winter in Canada, paano pa kaya sa rainy season dito sa Pilipinas?
- Stewed chicken and cornbread made via a solar oven

Solar cooking is a topic that I’m very, very interested in. By the time I start living in the province, I want to be very good at setting up solar ovens so that I can build them and give them away to my partner’s relatives there. This will lessen their LPG, coal, and other cooking expenses. (I actually made a makeshift oven based on one of the videos above. I’ll be posting about that next week.)

Natural Light

To maximize sunlight and avoid turning on light bulbs during the day, make sure that the high-activity rooms of your house have ample windows and other source of natural lighting. These rooms include the kitchen, a home office, or the dining room. It may sound like common sense, but many people forget this when planning or remodeling their homes.

Here’s an example: I’m in my home office for the greater part of the day, so I need it to be well lighted while I work or read. It’s fortunate that I have a large window on one wall and a sliding glass door on another wall - I never have to turn on a light bulb between 6am to 4pm.

Our kitchen/dining room also maximizes natural light. There are doors on both ends of the room, and both of them have a secondary screen door. Our ceiling also has two skylights made out of the typical translucent plastic “yero”.

If you have the budget,you can try installing tubular light (also known as sun pipes or sun tubes) in your house. I don’t know where to get these locally, though. Frankly, I think the other natural lighting methods I mentioned above should be enough for the typical Filipino home.

How about you? Do you have other frugal ideas on how to use solar energy? Have you tried any of the above methods?

Additional Sources:

“Renewable Energy Solar Cells Ain’t So Renewable” by Kit Eaton, FastCompany.com

Image by flaivoloka from sxc.hu

Bookmark to:

Free Digital Downloads for FrugalPinoy.com Readers

2009-10-05T16:33:49Z

Hello everyone!

I’d like to hear from YOU, the readers of this blog. I want to get your feedback and know what you think about the articles I post here. Because of this, I’ve decided to hold the Frugal Pinoy Survey.

This survey contains 7 simple questions about what you’d like to see here at Frugal Pinoy. In exchange of answering the survey, I’ll send you 3 personal finance books that will hopefully help you live a better financial life. So please put a valid email address in your entry, and I’ll send you the books in PDF format within 2 days.

Here are the titles of the books you’ll get:

“Zen to Done” by Leo Babauta
“Thriving on Less” by Leo Babauta
“Investing Made Simple”

I’ll only be collecting responses until October 31, 2009.

If you’re interested in getting these free downloads, please click the link below:

Click here to take the survey now.

Thanks for participating!

Bookmark to:

The Millionaire Next Door - A Review

2009-09-15T20:04:05Z

I’ve just finished listening to the audio book version of “The Millionaire Next Door” by Thomas J. Stanley and William D. Danko. I’ve heard good things about it, so I thought I’d check it out for myself.

The premise of the book is simple: the authors conducted a survey of self-made millionaires in the US, to see what characteristics they share and how they got to be millionaires.

In the first part, the authors share their discovery of a surprising fact: millionaires often did not look the part. They did not dress like millionaires, they don’t come from wealthy families, and most of them don’t even have an MBA or high levels of tertiary education.

Here’s an excerpt from the book (emphasis mine):

“In time we discovered something odd: many people who live in expensive homes and drive luxury cars do not actually have much wealth…. Many people who have a great deal of wealth do not even live in upscale neighborhoods.”

Then the authors move on to discuss the common characteristics of millionaires and how they acquired their wealth. Not surprisingly, it involves discipline and planning.

Here’s a brief summary of the book’s main points:

What is “wealth”?

“Wealth is not the same as income.”

The authors defined wealth as “Substantial amount of appreciable assets”. This meant a net worth of $1,000,000 or more.

One of the major points discussed in the book is that wealth is not the same as income. This means that just because you have a high-paying job, it doesn’t necessarily follow that you are wealthy. The authors gave several real-life examples of people who earned six figures per year (in US dollars) yet lived their life from paycheck to paycheck. If you added their net worth, it would amount to ZERO. Take their paycheck away, and they can’t survive. According to the book, most people who lived like this would survive only 2 months at most with no income. In contrast to that, wealthy millionaires can live without regular employment.

You don’t have to come from a rich family either. 80% of Ameirca’s millionaires accumulated wealth in one generation, not via inheritance. They are regular people.

But what made them millionaires?

The 7 Factors of Wealth

The authors made a list of 7 common factors found in most of the millionaires they surveyed:

They live well below their means. This may sound strange to some people, but millionaires budget well. According to the authors “They became millionaires because they are good at allocating resources. They stay millionaires the same way.”
They allocate time, money, and energy efficiently in ways conducive to building wealth. From the book: “Millionaires spend significantly more hours per month planning their finances than high-income non-millionaires.”
They believe financial independence is more important than displaying social status. Surveys show that most millionaires don’t spend much on shoes, cars, and clothing - it’s the high-income non-millionaires that do.
Their parents did not provide economic outpatient care. This means that millionaires often did not receive financial support from their parents.
Their adult children are economically self-sufficient. Related to the point above, millionaires did not give financial support to their own children once they reached adulthood. In fact, the research shows that the more money you give your adult offspring, the more they will depend on credit, and the less wealth they’ll accumulate.
They are proficient in targeting market opportunities. Most millionaires are good at selling products and services to those who are also wealthy.
They chose the right occupation. Most of the surveyed millionaires are self-employed or run their own businesses.

What I think of the book:

If you get this book, remember that it’s an analysis of survey results. It’s not a step-by-step how-to guide on accumulating wealth. Don’t expect specific tips on where to invest and how to cut back on your spending.

While the data was eye-opening, I had a few complaints:

Paulit-ulit. Some of the information is redundant.
The book doesn’t take into account the value of time. For example, if there’s a promo, I’m not going to fill out a form for an hour if it would give me only $1 free. My time is worth more than that. If you’re absolutely broke, that’s probably fine.
“Luck” is ignored. While I don’t believe in “fate” generally, I believe that there is an element of randomness involved regarding what opportunities you have. For example, if you’re unlucky enough to have parents who aren’t financially responsible, you’re bound to pay for their debts, retirement, and living expenses (esp. in Filipino culture). This is much harder if you are starting your own family.
The research methodology was a little off. The millionaires were self-selected rather than, say, chosen from an existing list.

What I do like is that it focuses on frugality, investing, discipline, and planning. I believe that these things are a solid formula for wealth, and it’s good to see it backed up with data. It’s a good way to crush the get-rich-quick mentality.

Should Filipinos get this book?

Since 95% of the book is a presentation of data, and only around 5% are ideas and lessons you can act on, I wouldn’t recommend the average Filipino to buy it - especially since the research was conducted in the US. If the same survey was done in the Philippines, the results may be different. That book, I might recommend.

As for the things you might learn, the valuable ideas from this book can already be found on this review, along with other existing reviews of the book. It doesn’t have many solid “tips” or concrete steps you can take to improve your finances. As long as you’re aware of the 7 factors mentioned above, and you act on them, you’re good to go.

Bookmark to:

How John Chow Makes $40,000/month From His Blog

2009-09-06T10:17:48Z

I added new link to the Personal Blogging Degree page. It’s a video of a talk by John Chow on how he makes around $40,000 per month on his blog.

Hint: It’s not through Adsense, and he doesn’t blog for the money.

Click here for the video. It’s around an hour long, but well worth it.

Bookmark to:

Online money-making opportunities: August 16 to 24

2009-08-24T15:38:20Z

Hello everyone Happy job hunting!

Note: I try to list legitimate job opportunities as much as possible, but some illegitimate ones might fall through the cracks. Please use your best judgment when communicating with prospective clients, and make sure you get a signed contract before doing any work.

Blogging and Online Writing:

Web Content Writer ($10/post)
Content Writer for JaneContent.com
Blogger for Employed Online ($30,000/year)
Blogger for WebDesignerDepot.com ($150/post)
SEO Article Writer (7 to 10 GBP)
Ghost writer, business ($50/post)
Travel writing
Writers about weight-loss ($15/post)
Engineering Blogger
Celebrity blogger
Blogger for SocialJane.com
iPhone App Blogger (at least $10 per post)
BlogHerald is looking for contributors
Writer for InternetBrands ($50 to $75/post)

Web Design & Development:

Miscellaneous:

video/screencasting tutorial expert
Expert internet marketer (50% of profits)

Bookmark to:

The Hard Truth: 30 Money Questions You Should Ask Yourself

2009-08-27T03:57:10Z

This post is simple. My goal is to give myself and the readers of Frugal Pinoy the chance to be completely honest with ourselves about our money. While I’m generally doing ok, there are some aspects of my financial life that still need improvement.

Let’s take the time to review this questionnaire. You don’t have to write your answers in the comments. In fact, I just recommend that you print it out and answer it in your private journal or a piece of paper. As for me, I’ll do my best to disclose what I can below, without sacrificing my privacy too much.

Without further ado, let’s get honest, shall we:

Finances

1. How much monthly income do you have minus taxes? Apart from your salary, include other side income streams such as businesses, allowance, etc. [FP's note: My income is ok, but I want to earn more.]

2. What is the exact amount of money you spent last month? Including utilities, debt repayment - everything. [FP's note: All my expenses are in a spreadsheet, so I only have to open it to answer this question.]

3. When you subtract your answer to question #2 from your answer to question #1, do you get a positive or a negative number? If it’s a negative number, you are obviously living beyond your means. [FP's note: Positive! But if I include savings, obviously the answer is zero, since I "spend" every centavo.]

4. If you don’t have an answer to #2, how come you don’t know how much you spend? Too busy? Not sure how to track your money? Overwhelmed at the thought?

5. How much debt do you have? Credit card debt, loans, borrowed money from friends and family. [FP's note: No debt.]

6. If you suddenly lost your job and other sources of income, how long would you survive without resorting to debt or receiving money from relatives/friends? This points to your emergency fund, if you have one. [FP's note: Personally, my family and I could go on for over 6 months, even longer if I tap into my savings outside of my emergency fund.]

7. What’s your definition of being wealthy/rich? It could be a specific amount, a feeling, a lifestyle, etc. Usually, though the answer doesn’t lie in a specific amount, because it’s not the money per se that we want, it’s the experiences and things it can buy.

8. Do you think you have what it takes to be rich? Why or why not?

9. If you want to be rich, what steps have you taken to reach that goal? What additional steps do you need to take?

10. What large expenses will you have within the next 10 years? For those in their 20s and 30s, it could be a wedding, kids, travel, a new home, starting a business, etc. [FP's note: For me it's a house, travel, and kids.]

11. Are you financially prepared to handle your listed expenses from #9? True, you can take out loans to pay for many of these large expenses, but consider this question with the thought that you shouldn’t incur additional debt. [FP's note: Yes, I'm on track with my saving goals.]

12. Do you have any investments? Not just limited to stocks. May include businesses, sources of passive income, bonds, real estate (intended for rental or selling), etc. [FP's note: I have a few investments, but would like to be more aggressive.]

13. How do you make financial decisions? Do you do your own research? Rely on advice from experts? Or do you just go with your heart? [FP's note: A little bit of all three. But the most important factor for me is to gain as much informational advantage as I can.]

14. Do you tithe regularly? Apart from contributing to causes you care about, volunteering your time and giving donations gives you a feeling of abundance. [FP's note: I donate to causes, but want to do more volunteer work.]

15. Are you part of the 10% of Filipinos who save up for retirement, or are you part of the other 90% who don’t? [FP's note: I'm part of the 10%.]

Work and Employment

16. Why are you working at your current job? Apart from the paycheck, what is your motivation for getting up each day and going to the office? [FP's note: I love it, that's why.]

17. If you really like/love your job, are there ways you can become more productive at work? Frugality with your time is equally important. [FP's note: Working on this every single day. It's an ongoing battle. Some days I win.]

18. If you really dislike your job, what is forcing you to stay? I feel sad when I see highly educated, competent employees rant on and on about how much they hate their job.

19. If your job is your only source of income, have you ever thought of creating more income streams? This may include businesses, side raket as a freelancer, garage sales, investments that pay dividends, etc. If you’ve considered these streams of income, have you taken steps to get more involved in them? [FP's note: I've got multiple income streams, but not as many as I'd like.]

20. Have you ever asked for a raise? For some reason, most corporate workers I know are too shy to ask for a raise. I suppose that given the current economy, it might seem like an inappropriate time. Still, you have to consider it if you have a good track record. Have you brought new clients to your company? Did you save them any money? [FP's note: I raised my rates in the past year or two.]

21. Are you aware of all the benefits offered by your employer and do you take full advantage of them? Even your dependents might be eligible to use your benefits. [FP's note: No employers, so no benefits. I have to take care of this myself.]

Family Life

22. Do you and your family have clear “rules” about money? This is especially important if you’re married or if you plan to get married. Will your money and assets be combined or will you keep them separate? Do you talk about saving and spending? [FP's note: My partner and I are completely open to each other about money.]

23. Have you prepared a will? Who gets your assets when you die? Do you have the paperwork to support this? What is the chance of your will being contested? [FP's note: Working on this. I want it done with a professional so it will be hard to contest.]

24. Do you have a living trust? This means that if you ever become incapacitated, there is a designated person who will handle your affairs in the manner you’ve instructed. [FP's note: Working on this.]

25. What are you teaching your kids about money? Children learn more by your actions rather than your words. What financial values are you indirectly teaching them? What values are you directly teaching them?

Spending Habits

26. How do you pay for big purchases? Through cash, debit card, or credit card? [FP's note: Cash.]

27. Do you pay your rent, utilities, and other bills on time every time? [FP's note: I'm on time 98%. Sometimes I forget the phone bill. Sometimes the phone bill doesn't arrive!]

28. How long do you wait until you decide to buy an expensive item you want but don’t really need? Do you buy it as you want it, wait for a month or so, or save up for it and *then* buy it? [FP's note: I plan for it based on my disposable income.]

29. How much research do you do for your purchases worth more than P5,000? Do you look at online reviews and compare prices? [FP's note: I research when I can, but gadgets are my partner's forte so I trust her with those decisions even if the gadget is for me.]

30. Are you making an effort to lessen your cost of living? You don’t have to sacrifice too much or start a diet of lugaw. But it helps to save money where you can, so you can channel it to the things you do care about. [FP's note: Of course I do this. I don't have an expensive vehicle because I don't care about it so much, but I care about the quality of my food. And when I travel I choose cheap accommodations because I prefer to extend my stay for a few days rather than have aircon and a complimentary breakfast.]

Image by gmarcelo from sxc.hu

Bookmark to:

Online money-making opportunities: August 7 to 15

2009-08-14T15:55:15Z

Hello everyone Happy job hunting!

Blogging and Online Writing:

Tax/ Personal finance blogger ($25/post)
Blogger on personal training ($25/post)
Graphic design blogger
Entertainment blogger
Relationship blogger
Photography blogger
Article writer needed (Philippines)
Urgent quality writer needed ($30 to $250)
Celebrity style blogger needed
Article needed: A Comprehensive Guide to Asia’s Martial Arts ($25, registration required)
Article needed: Athletes who have become gods in their native countries ($25)

Web Design & Development:

Bookmark to:

How Poverty Passes from Generation to Generation

2009-07-21T09:34:33Z

In my post for Blog Action Day last October, I wrote about being broke vs. poverty. Being broke is about making the wrong financial decisions which prevent you from spending for your necessities. Poverty, on the other hand, is the inability to acquire your basic needs because you don’t have access to the education, resources, or opportunities that will allow you to rise above that state. As I concluded in that article, being broke is a choice, while poverty is not.

While it’s true that some people who grew up in poverty were able to rise above it as adults, it is extremely difficult to do so. How come most poor families remain poor generation after generation? New research shows that this all has to do with the effects of stress on a child’s developing brain.

Here’s an article from The Economist exploring the results of a study:

“Children with stressed lives, then, find it harder to learn. Put pejoratively, they are stupider. It is not surprising that they do less well at school, end up poor as adults and often visit the same circumstances on their own children.”
Source: “I am just a poor boy though my story’s seldom told” from The Economist, April 2009

This is all because of a part of the brain called “working memory”. Neuroscientists discovered that the working memories of children raised in poverty are much smaller compared to those who were middle-class. This difference is significant because the capacity of one’s working memory is crucial to one’s development. According to the article, this is what working memory is for:

“[...] Working memory is the ability to hold bits of information in the brain for current use—the digits of a phone number, for example. It is crucial for comprehending languages, for reading and for solving problems.”

When a child grows up in a stressful environment, this stress suppresses the creation of new nerve cells in the brain, as well as shrinks the parts of the brain that are associated with working memory.

The study shows that these negative effects on a child’s brain were explained only by stress, rather than other aspects of poverty such as nutrition, shelter, poor access to quality education, etc. Apart from the lack of financial security, poor people are also stressed for other reasons:

“[...] it is now well established that poor adults live stressful lives, and not just for the obvious reason that poverty brings uncertainty about the future. The main reason poor people are stressed is that they are at the bottom of the social heap as well as the financial one. “

To be clear, the study doesn’t say that poor people are stupid while the middle class and wealthy are smart. What the research reveals is that a stressful environment can prevent the optimal development of a child’s brain, especially when it comes to solving problems, reading, and linguistic abilities. While overcoming poverty isn’t impossible, it can be very, very hard given these circumstances.

The research may not be comprehensive, as it doesn’t address other factors, but it’s a start. The only way we can fight poverty is if we have a concrete understanding of its causes - no matter how complex they are. If you want to read the source article from The Economist, click here.

Image by irum from sxc.hu

Bookmark to:

What’s new for Frugal Pinoy this August?

2009-07-10T03:21:38Z

Happy Friday everyone! I have a few announcements to make. Mainly, this blog will undergo several changes so if there are bugs or if you see some weird things happening, it’s just me fixing things. Here are the changes you can look forward to for August:

Redesign. I’ll be using a new design for this blog, mainly to add more “breathing room”. Nasisikipan ako sa current design, eh.The new design will be less cluttered.

WordPress upgrade. Frugal Pinoy is built on the WordPress blogging platform. I’m using a very old version, so I’ll be upgrading to the latest version. You won’t notice this because it’s all happening behind the scenes, but there will be tighter security and additional features.

New topics on online careers. One of FP’s features, The Personal Blogging Degree, has become so popular that I’ve been getting requests on creating similar features on other online careers such as freelance writing, web design, consultancy, etc. I’ll be uploading those throughout August, so if you’re looking to learn more about making real money online, you have that to look forward to.

So that’s it for this week. Enjoy your weekend!

Bookmark to: