Frugal Honey

Debt Management

Credit Card Resolutions for the Chinese New Year

*Guest Post

The year 2014, according to Chinese horoscope, is the Year of the Horse. It is considered to be a very lucky year when it comes to money matters, particularly those born under the animal signs of the Horse, Rat, Rabbit and Rooster—at least, as believed by those who practice feng shui.
But of course, regardless of what your animal sign is, improper credit card management is only bound to lead to some really unpleasant consequences, lucky year or not. These consequences may include collectors bugging you every other day, or worse, getting deeper in debt trying to pay off previous credit card debts.
With 2013 coming to a close, leave behind some bad credit card habits and take up some new, good ones. It would be an even better idea if you include a promise to get out, and stay out, of debt in your New Year’s resolutions! This 2014, resolve to:

Pay more than the minimum amount.
If you have credit card debt, you may want to pay a little more than what you’re expected to pay on a monthly basis. By making higher payments, you can eliminate your credit card debt faster than it would take if you opt to just pay the minimum. Paying more than the minimum also helps you avoid accumulating more debt on interest.
Avoid unnecessary purchases.
There are certain signs in the Chinese horoscope, particularly the Dog sign, that are also predicted to have an excellent year ahead—financially and professionally—but will have trouble saving money. Don’t let these predictions deter you from achieving your goal to save more this year, by making sure to limit the use of your credit card to important purchases only.
Create a timetable for paying off your debts.
The Year of the Snake has come and gone, and 2014 promises to be a crucial year for the Snake sign. A snake’s loyalty can be proven over time, and time is something that’s also crucial to your credit card management. If you’ve a sizeable credit card debt, it would be a good idea to establish a specific timeframe wherein you intend to pay off that debt. Make sure your timetable is a realistic one. Otherwise, it’ll only be another source of stress for you.
Stop using cards that have balance.
Certain animal signs, like the Rabbit for example, are predicted to have a 50-50 year when it comes to money. Because of this, it might be a good idea to stop using cards that already have a tremendous balance to avoid getting buried deeper in debt. On a year that can go either way when it comes to luck, it’s best not to take chances.
No matter what animal sign you may fall under, or how seriously you take the Chinese Zodiac signs, one thing is for sure: you definitely need to establish a more disciplined approach to your credit card use and management. Doing so will definitely lead to a prosperous 2014, regardless of your sign.
* MoneyMax is the Philippines’ foremost online platform for comparing financial and telecom products and services – fast, comprehensive, and free. We aim to give the power of smart purchase decisions back to Filipino consumers by providing everything they need to become financially savvy. Find out more at MoneyMax.ph.

How I Demolished My Credit Card Debt

I’ve talked in passing about paying off my credit card debt a few years back, but now it’s time to get to the nitty-gritty, to spill the details on how I said sayonara to debt once and for all. Let’s talk numbers:

  • Number of credit cards = 3
  • Total amount of debt = Php150,000 more or less
  • Total amount paid = Php200,000 more or less
  • Time it took = 5-6 months

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The Necessity of Taking Out a GSIS Loan

Ok, so there’s really no need to get a GSIS loan, or any loan for that matter, especially if you don’t need it. But more than half a dozen people have prodded me to take out a GSIS loan because if I don’t, someone else will supposedly take one out in my name! How true is that? The fact that more than one person has told me the same thing means that there must be some grain of truth there right? Or maybe it’s just a case of double (or triple) hearsay perpetuated into a truth because it’s been repeated over and over again?

So confusing.

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Lending Money to Friends and Relatives: More Harm than Good

This article from Learnvest brought back a barrage memories of the first and last time I acted as guarantor for my friends.

In my old law firm, one of our clients had an ex-deal with Gold’s Gym and was paid with 1 year membership GCs redeemable at any Gold’s Gym branch. Our client then sold these GCs for Php12,000 each, payable in 12 monthly installments. Of course I pounced on the deal and informed my friends about this fantastic offer from Gold’s Gym. Several friends bought GCs and we agreed that they would pay me Php1,000 monthly for each GC, I would then remit the cash to the client every month.
Sad to say, of the 3 friends who got GCs through me, only 1 religiously paid every month. One always forgot it was that time of the month and the other lost her job and gave back her GC to me, promising to pay me back later.
The forgetful friend eventually did pay me, but only after I demanded the whole amount after he forgot for 2 straight months to remit his payment. The other friend still owes me money and from the looks of it, she has already wiped off that debt from her consciousness, even if she got a new job about 3 years ago.
I’m still friends with these two, but I will never, ever lend them money again or act as a guarantor for them, or for any other person, for that matter. The stress and disappointment are just not worth it. 
For me lending and borrowing money involves so much more than the actual value of the transaction, as it really boils down to respect. Do you as the borrower, respect the lender enough to make good on your word? Or will you just disregard the loan, reasoning that the lender has more than enough to not notice that she’s out a few thousands of pesos?
I know money problems can’t be avoided, but what you can control is how you will honor your word to someone you are indebted to.

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