Getting a grip on your finances

Oh no, not our refrigerator again, my sister protested when she learned that I’ve used our refrigerator as a visual aid in one of my talks.

I needed an eye-grabbing image for my graduate school presentation on financial discipline.

The photograph of our dilapidated refrigerator was perfect. It had character and said a lot more than a gazillion words could.

Our ref’s rubber lining had thinned out, so the door can’t be completely closed. This allows some hot air to enter the freezer compartment which isn’t good since this increases our electricity expense.

It never crossed our minds to buy a new appliance.

According to my big brother and sister, the 20 year old refrigerator is still in good condition (it still produces ice and keeps our drinks cold), although it looks like it’s falling apart.

Being resourceful, big brod took a bicycle strap and fashioned this into a belt for the poor thing. So whenever we wanted to get something from the ref, we had to unfasten the belt.It worked wonders for my pocket and my waistline.

Considering that I found it cumbersome to unfasten the refrigerator belt, I only ate twice a day (I read somewhere that a healthy human being only needs to eat two full, nutritious meals a day).

In other words, I ate less and bought less food.

It’s easier to discuss food discipline; food doesn’t really eat-up too much of your budget. And, surprisingly, it is the kind of expense most people can control.

Luxury items, on the other hand, are an entirely different matter.

Luxury items always find a way to get your attention and onto your credit cards or wallet.According to some information I've seen online, the average family is several thousand pesos in debt on their credit cards.

Some people may not mind that right now when they can still get a loan. But in the long run, debt can be an extremely huge burden.

Why is being in debt bad? Because you start paying lots of interest, so that what gets paid back is much larger than the original debt.

How exactly does debt become so bad? Two words: compound interest.
The money that is not in the lender's hands is charged interest, and interest on top of interest, it piles up fast over the months.

Unless your husband is working for the Mafia, the only way to get out of debt is to stop adding to debt.

Financial management requires discipline. You need to set yourself firmly on a clear course of action, and stick with it over weeks, months, and years.

I know how you feel; you’ll need to be reminded over and over again that there are no easy solutions.

The last time I talked to my sister, she said the photograph of our refrigerator has been doing the rounds of the Net.

Does that say anything?