Avoid Surprises

During tax season, we always wish that we could claim our dog as our dependent. We could not so we have to pay our dues.

To make it easy for us, we set aside “tax money” in the beginning of the year. We put it in the savings account and pretend that the money does not exist. I always cringe everytime I see how much money we have to give to the government, but it is what it is. 

We do the same thing with other bigger expenses such as car, house and earthquake insurance. Every month, we set aside certain amount. When the bill comes, we have saved enough to pay it off.

My husband and I work well together on this area. He is the bookeeper and I am the moneykeeper. He schedules the payment and I do the paying. In that way, we both have full knowledge of our financial status. There is no surprises. 

How about you? What kind of system do you use? 

Live Within Your Means

A page from my old journal.

Living within your means is one of the most used phrases around. Doing it successfully is another story. I talked about how I was able to survive and save with a thousand dollars monthly salary in my other post. 

One thing that helped me most was focusing on what I have, not what other people have. If I spend my time being envious about my neighbors’ or friends’ abundant lifestyle, then I will start to feel sorry for myself. I would be tempted to live like them even when I could not afford it. 

My roommate was driving a brand new Nissan. My car was a 1988 Dodge. It was given to me by my boss. My friends shopped at Macy's, I shopped at thrift store. I did not care at all. I learned to rejoice with them and be content with what I have. 

Don’t get me wrong. It was my dream to be able to live a good life, travel, and do things that I enjoy most. Until then, I just work hard and strive to improve the quality of my life.

I still keep the journal that I used to monitor my budget. Every cent that I spent was recorded in it. It helped me set my limit prioritize my spending. 

My husband wonders why I would not toss it even after we got married. For me, it is a great reminder that I can be happy and content even when I did not have much.

Got Refund?

I was working for a small nonprofit agency when my husband and I got married. The day after we said our vows, my husband decided to consolidate our bank accounts and credit cards. 

When we went to my bank to close my account, my husband was very surprised to see that I had $3,500 in my savings account. You might think it was nothing but with my $1,000 monthly salary as a caseworker, it was almost impossible to have any saving.

How did I do it? When I opened my bank account, I set up an automatic $25 monthly savings. Everytime I get my paycheck, that amount would be automatically withdrawn from my checking and be deposited to my savings account. I did not wait until I get a bigger income before I started saving. Small savings is better than nothing at all.

The bigger part of my savings came from my tax refund. Every year, tax refunds goes to my savings account. While most people were thinking where to spend theirs, I was more concern of saving for the rainy days.