So Near Yet So Far!

Maybe it's wrong to equate getting my first paycheck and my commuted leaves as the finish line, but that's how it really feels like at this point. It's as if I've been running this financial marathon these past two months, making do with what we have without touching my investments. Unexpected expenses like our car's battery dying and the resurrection of a headache which I honestly thought had long been dealt with, felt like punches to the gut. Let me reiterate again for the nth time how important it is to have a healthy stash in your emergency funds and believe you me that building up my emergency funds is the second thing I'll be doing, next to paying off my credit card bills, once my cash inflow becomes regular.

Speaking of credit cards, I've been carrying a balance in three cards and to minimize the financial charges, my strategy has been to use the card with the lowest balance while trying to pay off the other two. It's not the best of strategies to be honest, but doing that has limited my interest charges to less than Php2,000 for the past three months for all of my credit cards, so pwede na rin kahit papaano. But those balances will be decimated this month when I get my commuted leaves. I can't wait to be credit card debt free once again!

So there. Konting tiis na lang. The worst case scenario is I get my first paycheck at the end of the month but with my commuted leaves coming in next week, we'll still have a healthy buffer around us. And if my commuted leaves are delayed once again, then it's time for another salary advance and more suck-it-up juice. Argh.

This actually feels like deja-vu because I remember waiting just as anxiously for my first paycheck the first time I entered government service via the Court of Appeals. But this time around, my credit card debts are merely a third or a fourth of what I amassed then, I have a positive net worth, access to an interest free salary advance and didn't have to take out a loan from family members. Yup, things are definitely better this time. But for my third career jump, which may happen in the next few years, I don't want to go through this whole rigmarole again, so building up a sizable war chest is the number one priority.

It's also the same when I retire, I've seen enough of my relatives getting into debt while waiting for their retirement checks to come in and I don't want to suffer the same fate, hence the need to have lots of cash at hand when that time comes, and at all times to be frank.

And on a totally unrelated note, go Manny go!!


Jacqueline Uy said…
Hi Ms Jill! Been following your blog to help me with financial literacy :) Can you elaborate more on your strategy to to minimize financial charges? I have two credit cards, one has been fully paid (yaaay!), the other one may balance pa. I havent been swiping any of them hanggang hindi pa bayad ung isang card.
Jillsabs said…
Hi Jacqueline,

It's actually just a delaying tactic that I use while waiting for my money to come in. I have three credit cards but I usually just use one card that I pay off in full every month. Here's how it usually goes:

Month 1 = card 1- beginning bal. Php20,000; interest fee (3.5%) = Php700

By this time, I use credit card 2 with 0 balance and pay down credit card 1 by Php5,000 and pay a little above the minimum for credit card 2 when the statement arrives.

Month 2- credit card 1 - balance = Php15,700; interest fee = Php549.50
credit card 2 - balance = Php15,000 (no interest fees carried over from month 1)

Month 3 - credit card 1 - balance = Php11,195
credit card 2 - balance = Php13,000

And by month 3 I can already pay off the full balance for the two cards so there won't be any interest fees going into month 4.

Using this method, the total interest fees paid amounts to Php1249.50. But if I continued using credit card one, it would go something like this:

Month 1= beginning bal. Php20,000; interest fee (3.5%) = Php700

Month 2= Php15,700 + Php15,000 = Php30,700 ; interest fees = Php1,074.50

Month 3= Php26,774.50

Total interest fees= Php1,774.50

No interest fees also going into month 4 since I'll be able to pay it off in full by then.

There's a Php500 difference in interest fees if I use 2 credit cards versus using only 1 credit card.

But as I said, this is only a delaying tactic and the longer you do this, the interest fees will end up piling up regardless of the strategies employed.

Hope this helps!
Jillsabs said…
Sometimes I think the benefit of this method is to just give me a false sense of security that my debt isn't as big since it's spread out so the total amount doesn't seem so daunting.

Paying off debt is largely about developing the right mindset too and this method makes me breathe a little better at night (even if I know that I'm just spreading my debt around and probably not even saving that much in interest fees to be honest)
Jacqueline Uy said…
Thank you, Ms. Jill for enlightening me. I have bookmarked this page to serve as reference. :)
edelweiza said…
Like you, I learned some great financial lessons from relatives who had it all and lost it all. I wanna retire comfortably so I'm thinking smart financially and working for that dream as early as now. It's better if you would finish paying those credit card debts as soon as you can because they incur interest monthly. Sayang din ang 2k. (But I know you know that very well.)

While I am credit card debt-free, si hubby may utang pa sa card nya. (We keep just one credit card each, different bank.) Isip nga ako ng diskarte paano sya tutulungan na hindi naman lalabas na sinalo ko ang utang nya. You know, male ego. Haha. :)
Anonymous said…
This is very inspiring! Can I share to you some articles that I have in your blog? :)

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