By Heinz Bulos

1. Buy energy efficient. Look for appliances with the highest Energy Efficient Factor (EEF) as it is more efficient and costs less to operate. If you replace an old EER 5 air conditioning unit with a new EER 10 unit, you’ll cut your costs in half.

2. Use compact fluorescent lamps (CFL). A 16-watt CFL produces the same light as a 60-watt incandescent bulb but consumes 75% less energy and lasts 10 times longer.

3. Clean and maintain your appliances. The three biggest energy hogs at home are your air conditioner, refrigerator, and cooking range.  Make sure to maintain them regularly to keep them running efficiently. Clean the filter and coils of your AC as a clogged filter uses 5% more energy. Clean your refrigerator’s condenser coils, which remove heat, at least once a year. Check that the seals on the door of both your fridge and oven are air-tight.

4. Use your air conditioner efficiently. Keep it in the shade as that saves 5% less energy than when exposed directly to sunlight. Turn lights off to reduce the heat. Use light colored window shades or curtains to reflect sunlight. Keep all doors and windows closed tight. Install a plug-in timer to shut if off automatically or programmable thermostat that can adjust the temperature on its own.

5. Turn off, unplug. Turn the lights off if you leave a room for more than 15 minutes. Unplug your electronics if you’re not using them, including transformers or voltage regulators as they consume more electricity when they heat up.

A pastor and his family adopts Biblical principles to frugal living
By Heinz Bulos

Who says the Bible isn’t practical? Just in case you didn’t know, “money” is mentioned more times than any other topic in Scriptures. Joey Batungbacal, 53, a pastor at a local Christian church, knows this. “The first I’ve learned,” he says, “is that God owns everything and we’re just stewards of His blessings. If He can trust you with little things, then He can trust you bigger things.”

To put this principle to work, Pastor Joey applies prioritization. For this family of five, that means God first, spouse second, children third. They tithe 10% of their income to the church, a practice that dates back to the Old Testament. He explains, “Give God what is due Him. Whatever comes in goes back to Him. This is a given,” adding that their experience proves that if they give more, more blessings come. He cautions however that people should not take this mean that they’re free to do whatever they please with their lives.

When it comes to family matters, Pastor Joey consults with his wife for financial decisions. They work together on a monthly budget, which reflect the priorities they’ve set. They also set aside 10% to 15% of their income for savings, particularly for family vacations. He points to a verse in Proverbs 6 about the ant which stored food little by little. In his case, he was able to save up for educational plans for his kids, two of whom are already working professionals, as well as life insurance and estate protection.

They also use the envelope system, wherein during payroll, they insert cash in envelopes labeled according to their budget’s expense categories. “What’s left is our personal baon for 15 days,” he says. This way, he explains, they don’t fall for the idea of false prosperity, thinking they have so much cash to spend.

They also make sure to differentiate wants from needs, asking themselves if what they want to spend on is really needed. Pastor Joey notes, “Even if it’s a need, but the money’s not there yet, we don’t borrow. That’s a signal it’s not the right time to buy.”  Instead they save up for it. And often, he adds, after waiting, they realize they don’t really need it after all. “We are careful about impulse buying,” he shares.

Food takes up much of their budget, so his family makes sure they have this cost under control. For instance, their house help buys food at the wet market, which Pastor Joey notes is 30% cheaper than at the supermarket. Before they troop to the mall, they eat a heavy meal and return home before dinner. They also gave up on things they can do without, like soft drinks, which he admits they used to consume morning, noon, and night. “The little things add up,” he shares.

Based on experience, Pastor Joey also advises against buying second-hand cars because you’ll “inherit the headaches of the first owner.” So he always buys brand new, since he can break it in properly and extend its useful life. It’s also important to follow the car’s regular maintenance schedule, he says, since that prevents costly repairs and results in a higher resale value. “And develop good driving habits,” he adds.

For a family who loves to travel, Pastor Joey is as meticulous about preparing the travel budget, saying, “We’ll go only when we can meet the budget.” So they wait for special packaged tours and “buy 1-take 1” promos, usually during the off-peak rainy season of June to September, and they plan and reserve in advance.

By Heinz Bulos

1. Comparison shop. Compare supermarkets based on prices, not on distance and convenience. Make a list of regular grocery items you buy and compare how much each item costs at two or three supermarkets. Definitely avoid convenience stores where prices are marked up much higher. Compare also across brands based on the unit price to find the better bargain.

2. Buy in bulk, or not. For regular stuff you use like toiletries and certain ingredients, consider buying them in bulk at a wholesaler or discount warehouse store. Alternatively, buy bigger-sized packages. But—and here’s the big but—only if they are cheaper on a per unit basis. Some items, such as shampoos and vinegar, in smaller packs or sachets may end up cheaper per unit, so consider buying several of those instead of buying an entire bottle or the bigger can.

3. Shop smart. The layout of your neighborhood supermarket is designed to get you to buy the higher-margin items. Often, you’ll find them on the shelves at eye-level. Reach up or look down to find cheaper alternatives. You’ll also find high-markup prepackaged and preprocessed items in the aisles. Stick to the perimeter to buy meat, dairy, and produce. A few more things to remember: always shop with a list and stick to it. Don’t bring the kids (your hubby sometimes belong to that category) or you’ll end up buying more stuff. And don’t shop when you’re tired or hungry because you’ll end up buying junk food you don’t need.

4. Buy generic. Consider buying generic and store-brand products. They’re usually cheaper than name brands, even though they’re processed at the same plants.

5. Buy fresh produce at a wet market. You spend only a fraction of what you pay at the supermarket for fruits and vegetables, which are often fresher as well.

A busy working mom shows how to stretch her peso
By Heinz Bulos

Saving can sound so boring, but Tracy Aquino, 37, has made it both creative and enjoyable. For her, the most important principle in saving is a change of lifestyle. The mother of a five-year old son makes time for fun without having to spending a lot, or at all.

Tracy, who works as a training manager for a U.S.-based company and a film teacher in a prestigious university on the side, loves watching movies. But before trooping to the mall, she and her family have a meal at home first and bring their own popcorn. She enjoys shopping for clothes every now and then but she never buys those that need to be dry cleaned.

Her husband has also traded his old habits of billiards and going out with the boys for a less costly pursuit such as watching his fish in the aquarium. “Sure he buys all kinds of fish, but he argues it keeps him home and is still cheaper than billiards with the boys,” Aquino jests.

She also makes it a point that her family lives a healthy lifestyle. She always buys fresh food mostly for their health value, but practically for the cheaper cost. Processed food such as your favorite can of luncheon meat is not only expensive but is bad for your health. She does the grocery once a week and always sticks to her list. She also tries to stay away from convenience stores unless it’s a matter of life and death.

On weekdays, she always brings a packed lunch and is seldom tempted to lunch out with officemates even on a Friday when everyone seems to be a little more forgiving about spending.  No amount of peer pressure will budge her from enjoying her lunch lovingly cooked by the yaya. Tracy says, “One of the reasons I hate eating out are the taxes that make an already expensive meal even more costly by a few hundred pesos.”

She’s also a big believer in recycling. In her household, they collect old newspapers and used bottles as well as electronic junk such as old cellphone chargers that she exchanges for cash. To motivate her house help to segregate the trash according to recycling standards and to keep the newspapers and bottles, whatever cash they get from trading these goes to them.

Tracy also proudly declares that she buys her Christmas gifts on sale. In past years, she even made her own gifts. One time, she made 100 small killer whales made from paper-maché, attached with a picture of her family in scuba gear with the message “Save the Ocean”. Another time, she gave away paper weights made of pebbles she bought at two pesos each. She also makes her own Christmas wrapper using the very handy and cheap manila paper and decorate it with stamps made from vegetables out of which she carves her designs.

Saving is no strain on her at all because she has learned what others are still trying to achieve – to live simply and be content with what they have.

By Heinz Bulos

For many borrowers, a low, affordable amortization is the primary consideration rather than the total interest expense.
1. Get an adjustable-rate loan, to take advantage of rate dips, but only if there’s a rate cap. And make sure you will still be able to afford the monthly amortization in case the rate reaches the ceiling.
2. Go for the longest term. The typical duration of a mortgage is 20 years for houses and lots and 10 years for condominiums. Nowadays, some banks offer as long as 25 years for houses.
3. Opt for a straight-line amortization schedule. Your monthly payments are fixed for the entire duration, unlike declining-balance, which starts off with higher payments in the first few years.
4. Pay twice a month. It won’t lower your amortization any more than twice a month but it will let you feel less of the pinch. And it’s definitely easier on the wallet than paying fortnightly.
5. Some banks let you pay just the interest for the first year or other set period. You pay a lower monthly amortization in the short run. But do so with extreme caution.
6. Other lenders let you pay very low monthly amortization then require you to make huge balloon payments every quarter or every year. It makes sense only if your earning pattern is similar.
7. Make pre-payments to your principal and ask your bank to adjust your monthly amortization based on the new principal balance.