Sunday, January 26, 2014

The Law of Diminishing Marginal Utility: Is there such thing as "more" satisfied?

In the field of Economics, the Law of Diminishing Marginal Utility is a topic I am interested in.I'd like to call it the Law of Diminishing Satisfaction.

  Investopedia defines this as a law of economics stating that as a person increases consumption of a product - while keeping consumption of other products constant - there is a decline in the marginal utility that person derives from consuming each additional unit of that product.

Don't be fooled by the all-you-can eat buffet restaurants, they are using this law to their advantage. They know that people are willing to pay a higher amount,than they would if they pay per food,on the thought of eating infinite amount of food. Buffet owners also know that  consumer can't eat more than they can. They are laughing their way to the banks. I don't hate buffet restaurants at all, it's just when you know how stuffs work, you get a better understanding on how it's done and you would know if you are really saving money or if it is just another marketing scheme.

I'll give you an example of how this law happens to our daily lives.

Binignit in Cebuano
Ginataan in Tagalog
I was craving for some hot binignit (glutinous rice porridge)lately because of the subzero temperature I have been experiencing in my area. Last time I made one was last 2 Christmases ago and  I decided to make a whole pot this weekend in the hope of satisfying my cravings. While was shopping for the ingredients, preparing all of it, rolling the glutinous ball and all, I was excited as heck. An hour later, this yummy thing was ready. I excitedly put one serving in a bowl and ahhhhhhhh, yummy indeed! The second bowl was equally yummy. The third bowl was yummy as well but when I get to my 5th bowl, I realized  that with every spoonful I take, the less satisfied I get- the more I eat, the more my satisfaction diminishes. I didn't enjoy the 5th bowl as much as I enjoyed the first bowl and if I eat another bowl, I would definitely get sick and if I get sick, where's the satisfaction that I was looking for in the first place?

You think more money can make you happy. Why studies point that wealthiest nations are not the happiest? We keep telling ourselves if only we have more money we would be happy not knowing  the more money is not the solution but knowing that money is just a tool to meet our basic needs (food, shelter, clothing). When we reach to the point of meeting our basic needs, with a little wiggle room to be comfortable, the utility for money begins to diminish and yet, we keep telling ourselves that we need more. You might say "If only I'll have a car then I will be happy" not knowing by the time you get a car, you would move on to the next "If only I have this and that, then I will be happy". Satisfaction is indeed elusive coz we move on from one want to another want.

No matter what we do, if we don't know how much enough is, then we would be like an experimental rat in a maze, going in circles wasting our time on stuffs that aren't worth it. Why don't we stop and appreciate the things we have? The more we savor the stuffs we have, rather than drooling over stuffs we can't afford,the more we are going to increase the worth of things around us. 

Stop and smell the flower. Savor it.

Saturday, January 18, 2014

People Can be so Rude

My head was aching yesterday and I decided to grab an ice cream after work since I have a gift card to spend. After work, I was excited and marched to the nearby mall, went to Coldstone Creamery and order Cheesecake Fantasy in Love It. I pay using my gift card but for some reason, my gift card didn't work. I told her that I just used it last Sunday and it work with 14 dollars balance in it. She kept insisting that it won't work and if I have a cash or debit and I told her graciously that I want to use my gift card up and she freakin' embarrassed me in front of costumers saying "how I get around without any cash or credit card or debit card around", aaaaahhhh! Seriously, I was about to give up my ice cream coz she was so rude! She called the manager who was in the nearby TMobile to switch up her contract. She just swiped my gift card with no problem. I walked out saying sorry for the inconvenience.

Is it my fault that their machine didn't work when that hoe swiped it? Does she need to embarrassed me? People can be so rude!

I "googled" the reviews of that certain Coldstone location,  turns out its not just me who experienced rudeness and it had 2 stars unlike the other Coldstone location nearby.

Oh well, people's rudeness is a reminder for us not to act that way to others coz it doesn't feel good at all.

Wednesday, January 15, 2014

Throwaway Thursday and Why I want to be a Minimalist

If there's a Throwback Thursday, there is also a Throwaway Thursday . These are  pictures of stuffs that I am letting go or giving away to give way to a minimalist lifestyle, stuffs that I have been holding on for reasons unknown. This is one of my mantras: Less stuff, stress. For more information,see the post 

Why do I want to become a Minimalist? Because I want to travel and live with just a backpack for a long period of time before I turn 30, not caring for a huge make-up bag or a hair-blower because, as much I am tomboyish, I still got my kikay side which is frustrating coz it means you have all kinds of products for different kinds of needs. UGH, WOMEN! I want to travel light so I can go places without carrying a huge luggage. When I go back home, I want to go backpacking all over the Philippines and that, my friends, is the reason I want to be a minimalist.

I gave away make-up to my teenage neighbor. I once invited her over to rummage through my make-up stash and to take whatever she likes. She had fun and I was relieved that I gave away most of my make-up instead of throwing it away. I also gave away a huge make-up bag to my nieces back home and my sister-in-law said to give more books instead. Haha! I have hoarded a lot of cheap make-ups and this time around, whenever I am in the hunt for cosmetics, I would consider quality over quantity.

I recently sent a huge Balikbayan box for my family back home. It mostly contains a lot of clothes, shoes and personal stuffs that I am not using to be given to my mom and nieces. I seriously have less stuffs here and I am loving it. I feel free and light but I still have to go through a lot! 
These are stuffs I donated this week:

Heavy  Winter Scarf
As much as I love this one, I had to let it go coz I am not using it.

Trench Coat
I have a special trench coat. This is just extra so gotta let it go.

1 Old Navy long sleeve shirt
1 Aeropostale jogging pant and 2 random pants
3 shirts
1 brown antique-like box

2 shirts and 1 bumblebee costume for kids. Suppose to be for my nephew but he is older now so he can't wear this

Saturday, January 11, 2014

The "PROBLEM" with 52 Week Money Challenge


I started this challenge last August, 2013, see post here and four weeks later, I made the update here.
You can probably  tell in those posts that I was excited but I didn't stick to the challenge. Here's why:
  • Because the challenge isn't realistic

When I first encountered the challenge, I thought "Pfft, Chicken! I can do that blindfolded. Ha!" But when you take a closer look, you have to put a bigger amount of money at the later part or the later weeks of the year- which is the time of the year where you cant help but spend coz its the holidays.
Let's say you decided to do the Php 50:
Php 50- First Week
Php 100- Second Week
Php 200- Third Week and so on...
At first, it's easy and I am fully sure you can come up with that amount of money in the first few weeks. There is also a tendency to "reward" yourself coz "I already dropped money in this and I've been so good so I need to buy myself something" not realizing that last few weeks of the challenge you have to shell out:
Php 2,500- Fifty Week
Php 2,550- Fifty-one Week
Php 2,600- Fifty-two Week
In the whole month of December,2014, you have to save Php 10,050 and please don't forget that December is the month of giving thus, the month of spending.

My Advise:

If you are hell-bent on doing this challenge, why don't you reverse it?

Instead of doing Php 50 first, do Php 2,600 instead. Start from the bottom of the challenge and work your way up:

Php 2,600- First Week
Php 2,550- Second Week
Php 2,500- Third Week and so on..

And by the last four week of the challenge:

Php 200-  Forty-nine Week
Php 150- Fifty Week
Php 100- Fifty-one Week
Php 50- Fifty-two Week

By reversing the challenge, you are expected to save  Php 500 by December, 2014 instead of whooping  Php 10,050.  That's a big difference and by reversing the challenge, you have a wiggle room for some gift-giving for the holidays. Do you get my drift?

But my major advise?  Automatically save 10 percent of your income every month and increase it whenever possible- a saving advise that wont get old no matter how many saving hype that will come your way. Nothing beats building the habit of saving a percentage of your income every month. It'll become automatic. Nothing beats saving money automatically rather than consulting a chart every time you save.

  • Because I don't have concrete plan on where to use the fund.

I didn't pursue the challenge coz I don't have plan where to spend it. I already set up my emergency fund. My original plan was for it to be my "cheat fund" but honestly, I have a few wants and shopping isn't a habit coz the crowd, while shopping, drives me nuts.

Save realistically and save it your way, don't get into saving hype. After all, it's your money and it's your life.

Wednesday, January 8, 2014

Net Worth: How Much Are You Worth

Total Assets - Total Liabilities = Net Worth


Note: This is how I calculate my Net Worth. The degree of frequent updates that I have been doing to calculate it is my choice. It might be "OC" to most but then again, its my choice.

How do I calculate my net worth? As you can tell by my past posts, I am a pen-and-paper kind of person. I write everything and I refused to learn the software finance thing. I don't know but I am just comfortable with pen and paper. Different folks, different strokes,right?

Up Close
Personal Statement of Assets
As of May 2013
Note: I chose the month of May entry coz my handwriting seems neater here
Note: One dollar = PHP 41 is the constant conversion that I use

Up Close

Assets- everything you own which can be converted into cash when you decide to sell them with estimated value on each and every item

Example of Assets are written below:


  • Cash on hand
  • Back Account Deposits (Checking and Savings)

  • Real state properties ( house and lot, condos, rental properties, etc.). Use the Balance of the Principal
  • Vehicles
  • Furniture and appliances
  • Jewelry
  • Clothes, shoes and accessories 
  • Collections (Arts and painting, antiques,books, CDs, DVDs, Blu-Rays,comics, old newspapers and other collectible items) 
  • List down things that has value around your house. Look around. Be realistic. Don't know the price or a certain item? Google it. Easy. Be sure to put the present market value of the item and not the original value you pay for it. Car you bought for Php 500,000 would not cost Php 500,000 3 years after. Again, be realistic.

  • People who owe you money. Pray that they will pay so it'll boost your net worth.Haha

  • Stocks
  • Mutual Funds- Value per share multiply by the the number of shares you own)
  • Pre-need plans-(Memorial, insurance, educational, pension, etc.) Use the pre-termination value in case you want to pull it out earlier. It is stated in the Term and Conditions of your plan. Remember, no matter how much you put in the plan, you can't get everything back once you pull out the plan earlier than the date you agreed and signed in you contract.
  • Businesses you might have
  • Credit card debts
  • Items you bought on installment
  • Real state property loan (housing and the likes)
  • Salary loan
  • Money you owe to you friends,family, relatives, landlord, sari-sari store nearby, etc.
Calculating your Net Worth:

Take your Total Assets minus your Total Liabilities and the answer is how much you are currently worth.

If you ask me when do I update my net worth, I update it every 3 months, yup, 3 months! I like the feeling of knowing that all my saving tactics and my frugal ways are working coz my net worth keeps on increasing!

Calculating how much you are worth is one of the foundations of personal finance. You can't have a better grasp of your finance life without knowing where you at or where you stand. It's like watching Star Wars movies, to know how a boy named Anakin from Tatoine became a Jedi then turned to the dark side and would eventually restore the balance of the Force, you must watch the first movie,Phantom of Menace, which I find boring. It might be boring but it's necessary so you would be able to understand the whole thing before jumping to the next movie Attack of the Clones,  which I find more exciting than the first one.

Calculating your net worth is boring especially when you get to the part of looking at debts. Can we skip this part and go to the much more exciting part instead ,like investing maybe? I suggest you painstakingly do this first so you would know how much you owe and how much you are worth.It's futile to invest and the possible interest of your investment is lesser than the interest the bank is charging you for your debts. Besides, nothing beats the good feeling of no bad debts lurking around.

I hope you find this post helpful.

Happy calculating!

Tuesday, January 7, 2014

How I've Been Saving Money the Unusual Way

Below are things I have been doing to save money and most would find it unusual but hey, all in the name of peso-pinching.

  • Bring breakfast to work so I can drink freshly-brewed free coffee

  • Reusing floss - Gross? Shut up! Do you throwaway your toothbrush every after use? No! So is floss! I do run it with hot water every after use and besides, I am not sharing it with anybody so it's a-okay!

  • Making reusable sanitary napkin/pads 
Hand-sewn by Your's Truly

Cut out old tee-shirts in the shape of the regular sanitary pads with wings, put few layers in the middle, sew it by hand, put some snap buttons on the "wings" so it won't budge while wearing it and voila, reusable pads! Eco-friendly and I save tons! Gals, let me know if you want to know how I did mine and I'll make a separate,detailed post.

  • Toilet Flushing Mantra: "When it's yellow, let it mellow, when it's brown, flush it down"

Unusual, right? Some might say it's "ewwww, gross" but, how do you think I was able to saved up for my First Million Pesos,My First Million Pesos in Stocks and how do you think I'm worth 5 Million Pesos? Because I made frugality and cheapness my friends so don't judge. ha!

So fellow kuripots and peso-pincher, what's your unusual way of saving money?

Deep Freeze Warning

Don't let that sunny picture fool you, it is freezing here! 7 degrees but feels like -14 degrees because of the windchill! My first time to experience negative degree temperature.

I bundled up like crazy coz frostbite isn't fun. Dangerously frigid, indeed .


Saturday, January 4, 2014

Walking in the Winter Wonderland 2014

January 4, 2014

It's Saturday and that means running day for me but the trail is covered with snow and I don't know if my rubber shoes has anti-slip feature so I decided not to jog this morning coz slipping ain't a good thing. I have a friend who got seriously hurt and had broke her hips after slipping on ice.

I took it easy, walked and took tons of pictures.

Walked  13 miles for 1 and half hour
 I am running for almost 3 years now but it's my first time to walked and see the trail while there is snow on the ground. I had Walkmaster, which I  already sent to the Philippines, that allowed me to get my weekend run whenever it was snowing or raining outside.

Below are the pictures I had taken during my walk:

Powdery goodness

Frozen Trail
The path I usually take during my run

It was nice to hear the "crunch" sound on every steps I took

A Man Walking His Dog

I had to take a break right over there so I can lay my iPod to take pictures of myself. haha!

Timer 1..2..3
Nice to take pictures of yourself when no one is around

People sleeding

Chmaporado- the perfect meal after a nice and cold walk