How to File Claims from PDIC

My rural bank closed.

So, I am posting this. I know a lot of rural banks have folded lately.

This was taken directly from the PDIC website.

Advice: Make sure you bring/submit all the requirements for speedy transactions. You wouldn’t want to go there and waste your time because you forgot to bring, say, a proper ID.

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HOW TO FILE CLAIMS
WHERE

Claims may be filed with PDIC either:

1. Personally, in the premises of the closed bank where the deposit account was maintained or a site where the closed bank was transferred by the bank’s Receiver, or at the PDIC Claims Counter located at PDIC Ayala Extension Office, SSS Building, corner V.A. Rufino St., (formerly Herrera St.), Makati City.
2. Through mail, addressed to:
The Assistant Vice President, Claims Processing Deparment
Philippine Deposit Insurance Corporation
2228 Chino Roces Avenue
1231 Makati City, Philippines

STEPS IN FILING CLAIMS :
A. Personal Filing

1. Secure a Claim Form from any authorized PDIC representative. The PDIC E-Claim Form in the PDIC website may be used only if claim is to be filed through mail.

2. Fill up all the three (3) copies of the claim form and sign the “Signature of Depositor/Claimant over Printed Name” under the “To be accomplished by the Depositor/Claimant” portion in the Claim Form. Ensure that the signature in the claim form tallies with the signature of the depositor at the bank upon opening of the account. For a claim filed by a representative, a duly notarized Special Power of Attorney should be submitted. If the Special Power of Attorney is executed abroad, the same must be duly authenticated by the Philippine Consul near the residence of the depositor.

3. Submit the accomplished claim form, together with the original evidence of deposit (such as savings passbook, certificate of time deposit, ATM card, unused checks and bank statement), and two (2) valid identification documents (IDs). Valid IDs include SSS/GSIS ID, PRC License, Driver’s License, Senior Citizens ID, Passport, Company ID/School ID, TIN/Philhealth ID, Voter’s ID/Affidavit. If the claim is filed by the depositor’s representative, the same requirements are necessary.

4. Wait for your name to be called by the PDIC representative either to receive payment of your insured deposit from the PDIC Disbursing Officer or to be informed as to when you may proceed to the Transferee Bank to claim payment. Sign the Acknowledgement Receipt portion of the claim form following receipt of payment. If your deposit is in excess of the maximum statutory limit of P 250,000.00, the PDIC Disbursing Officer/Transferee Bank teller will return to you your evidence of deposit which you will use to claim your uninsured deposit with the deputy liquidator of the bank during liquidation stage.

5. If your claim is not due for payment, PDIC representatives will inform you of additional documentary requirements and/or status of your claim. A claims status sheet shall be issued which shall serve as your first notice of the status of your claim. A claim stub (the triplicate copy of the claim form) will be given to you which you will submit together with two (2) valid IDs once claim is ready for payment.

B. Filing Through Mail

1. Secure a claim form through any of the following (a) by downloading the E-Claim Form from the PDIC website (www.pdic.gov.ph), (b) from an authorized PDIC representative stationed at the closed bank or a site where the closed bank was transferred by the bank’s Receiver, or (c) at the PDIC Claims Counter located at PDIC Ayala Extension Office, SSS Building, cor. V.A. Rufino St. (formerly Herrera St.) and Ayala Avenue, Makati City.

2. Fill up all the three (3) copies of the claim form and sign the “Signature of Depositor/Claimant over Printed Name” under the “ To be accomplished by the depositor/claimant” portion in the claim form. Ensure that the signature in the claim form tallies with the signature of the depositor at the bank upon opening of the account. For a claim filed by a representative, a duly notarized Special Power of Attorney should be submitted. If the Special Power of Attorney is executed abroad, the same must be duly authenticated by the Philippine Consul near the residence of the depositor.

3. Send the accomplished claim form together with the claim stub (triplicate copy of the claim form) and the original evidence of deposit (such as savings passbook, certificate of time deposit, ATM card, unused checks and bank statement) and legible copies of (2) valid identification documents (IDs). Valid IDs include SSS/GSIS ID, PRC License, Driver’s License, Senior Citizens ID, Passport, Company ID/School ID, TIN/Philhealth ID, Voter’s ID/Affidavit, which shall be sent to :

The Assistant Vice President, Claims Processing Department
Philippine Deposit Insurance Corporation
2228 Chino Roces Avenue
1231 Makati City, Philippines

If the claim is filed by the depositor’s representative, the same requirements are necessary.

4. Payment of your insured deposit through check shall be sent to you by registered mail at your present address indicated in the claim form. If your deposit is in excess of the maximum statutory limit of P 250,000.00, your evidence of deposit, which you will use to claim your uninsured deposit with the deputy liquidator of the bank during liquidation stage, shall be returned to you.

5. If your claim is not due for payment, PDIC will inform you of any additional documentary requirements and/or the status of your claim.

HOW TO FOLLOW UP PENDING CLAIMS

1. Telephone inquiry by calling the Claims Processing Department at 841-4604 up to 4607.

2. Written communication addressed to:
The Assistant Vice President, Claims Processing Deparment
Philippine Deposit Insurance Corporation
2228 Chino Roces Avenue
1231 Makati City, Philippines

3. Inquiry in person at the premises of the closed bank, or at the site where the closed bank was transferred or at the :
PDIC Ayala Extension Office
6th Floor, SSS Building
V.A. Rufino St. (formerly Herrera St.) cor. Ayala Avenue, Makati City, Philippines

When inquiring by telephone or letter, ensure that the following reference information are mentioned:
1. name of the closed bank;
2. name of the depositor; and
3. claim number which is found on the upper right hand corner of the claim stub.

P.E.R.A. Act of 2008 (Personal Equity and Retirement Account)

I found the copy of the bill in www.senate.gov.ph.

This became law on August 22, 2008.

The IRR is yet to be released. Meanwhile, let’s read this.

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[REPUBLIC ACT No. 9505]

AN ACT ESTABLISHING A PROVIDENT PERSONAL SAVINGS PLAN, KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA)

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION I. Title. – This Act shall be known as the “Personal Equity and Retirement Account (PERA) Act of 2008”.

SEC.2. Declaration of Policy. – It is declared the policy of the State to promote capital market development and savings mobilization by establishing a legal and regulatory framework of retirement plans for persons, comprised of voluntary personal savings and investments. The State recognizes the potential contribution of PERA to long-term fiscal sustainability through the, provision of long-term financing and reduction of social pension benefits.

SEC.3. Definition of Terms. -Unless the context requires otherwise, the following terms shall have the following significance as used in this Act:

(a) “Administrator” is an entity accredited by the Bureau of Internal Revenue (BIR), after pre qualification by the concerned Regulatory Authority. The Administrator shall be responsible for overseeing the PERA, whose core functions shall include, but not limited to: reporting on contributions made to the account, computing the values of investments, educating the Contributor, enforcing PERA contributions and withdrawal limits, collecting appropriate taxes and penalties for the government, securing BIR Income Tax Credit Certificates for the Contributor, consolidating reports on all investments, income, expenses and withdrawals on the account and ensuring that PERA contributions are invested in accordance with the prudential guidelines set by the Regulatory Authorities.

(b) “Contributor” is any person with the capacity to contract and possesses a tax identification number. The Contributor establishes and makes contributions to a PERA.

(c) “Custodian” is a separate and distinct entity unrelated to the Administrator, accredited by the Bangko Sentral ng Pilipinas, providing services in connection with the custodianship of funds and securities comprising the PERA investments. The Custodian shall be responsible for receiving all funds in connection with the PERA, maintaining custody of all original securities, evidence of deposits or other evidence of investment. The Custodian shall operate independently from the Administrator. The Custodian is required to report to the Contributor and the concerned Regulatory Authority at regular intervals all financial transactions and all documents in its custody under a PERA.

(d) “Early withdrawal” shall pertain to any withdrawal prior to the period of distribution as set forth under Section 12 hereof.

(e) “Investment Manager” is a regulated person or entity authorized by a Contributor to make investment decisions for his PERA. As such, it shall assume fiduciary duty and responsibility for PERA investments. An Investment Manager shall act with utmost fidelity by observing policies directed towards confidentiality, scrupulous care, safety and prudent management of PERA funds.

(f) “Personal Equity and Retirement Account (PERA)” refers to the voluntary retirement account established by and for the exclusive use and benefit of the Contributor for the purpose of being invested solely in PERA investment products in the Philippines. The Contributor shall retain the ownership, whether legal or beneficial, of funds placed therein, including all earnings of such funds.

(g) “PERA Investment Product” refers to a unit investment bust fund, mutual fund, annuity contract, insurance pension products, pre-need pension plan, shares of stock and other securities listed and traded in a local exchange, exchange-traded bonds or any other investment product or outlet which the concerned Regulatory Authority may allow for PERA purposes: Provided, however, That to qualify as a PERA investment product under this Act, the product must be non-speculative, readily marketable, and with a track record of regular income payments to investors. The concerned Regulatory Authority must first approve the product before being granted tax-exempt privileges by the BIR.

(h) “Regulatory Authority” refers to the Bangko Sentral ng Pilipinas (BSP) as regards banks, other supervised financial institutions and trust entities, the Securities and Exchange Commission (SEC) for investment companies, investment houses stockbrokerages and pre-need plan companies, and the Office of the Insurance Commission (OIC) for insurance companies.

(i) “Oveseas Filipino” refers to (1) an individual citizen of the Philippines who is working or deriving income from abroad, including one who retained or reacquired his Philippine citizenship under Republic Act No. 9225, otherwise known as the “Citizenship Retention and Reacquisition Act of 2003”; or (2) the legitimate spouse, whether or not said spouse is of Filipino ancestry, and the children of the Filipino citizen mentioned in item (1) hereof.

SEC. 4. Establishment of a PERA. – A Contributor may create and maintain a maximum of five (5) PERA, at any one time: Provided, That the Contributor shall designate and maintain only one (1) Administrator for all his PERA. The Contributor shall make all investment decisions pertaining to his PERA. However, he has the option of appointing an Investment Manager, either in writing or in electronic form, to make investment decisions on his behalf without prior consultation.

SEC.5. Maximum Annual PERA Contributions. – A Contributor may make an aggregate maximum contribution of One hundred thousand pesos (P l00,000.00) or its equivalent in any convertible foreign currency at the prevailing rate at the time of the actual contribution, to his her PERA per year: Provided, That if the Contributor is married, each of the spouses shall be entitled to make a maximum contribution of One hundred thousand pesos (P l00,000.00) or its equivalent in any convertible foreign currency per year to his her respective PERA: Provided, further, That if the Contributor is an overseas Filipino, he shall be allowed to make maximum contributions double the allowable maximum amount. A Contributor has the option to contribute more than the maximum amount prescribed herein: Provided, That the excess shall no longer be entitled to a tax credit of five percent (5%). The Secretary of Finance may adjust the maximum contribution from time to time, taking into consideration the present value of the said maximum contribution using the Consumer Price Index as published by the National Statistics Office, fiscal position of the government and other pertinent factors.

SEC.6. Employer’s Contribution. – A private employer may contribute to its employee’s PERA to the extent of the amount allowable to the Contributor: Provided, however: That the employer complies with the mandatory Social Security System (SSS) contribution and retirement pay under the Labor Code of the Philippines. Such contribution shall be allowed as a deduction from the employer’s gross income. The Contributor, however, retains the prerogative to make investment decisions pertaining to his PERA.

SEC.7. Separate Asset. -The PERA shall be kept separate from the other assets of an Administrator/Custodian and shall not be part of the general assets of the Administrator/Custodian for purposes of insolvency.

SEC.8. Tax Treatment of Contributions. – The Contributor shall be given an income tax credit equivalent to five percent (5%) of the total PERA contribution: Provided, however: That in no instance can there be any refund of the said tax credit arising from the PERA contributions. If the Contributor is an overseas Filipino, he shall be entitled to claim tax credit from any tax payable to the national government under the National Internal Revenue Code of 1997, as amended.

SEC.9. Tax Treatment of Investment Income. – All income earned from the investments and reinvestments of the maximum amount allowed herein is tax exempt.

SEC.10. Tax Treatment of Distributions. – All distributions in accordance with Section 12 hereof are tax exempt.

SEC.11. Termination. -Any premature termination shall be treated as an early withdrawal under Section 13 hereof: Provided, That the penalties thereunder shall not apply if the entire proceeds there from are immediately transferred to another PERA investment and/or another Administrator.

SEC.12. Distributions Upon Retirement/Death. - Distributions may be made upon reaching the age of fifty-five (55) years: Provided, That the Contributor has made contributions to the PERA for at least five (5) years. The distribution shall be made in either lump sum or pension for a definite period or lifetime pension, the choice of which shall be at the option of the Contributor. The Contributor, however, has the option to continue the PERA. Complete distribution shall be made upon the death of the Contributor, irrespective of the age of the Contributor at the time of his death.

SEC.13. Penalty on Early Withdrawal. – Any early withdrawal shall be subject to a penalty, the amount of which would be determined by the Secretary of Finance and payable to the government: Provided, That the amount of the penalty shall in no case be less than the tax incentives enjoyed by the Contributor.

No early withdrawal penalty shall be imposed on any withdrawal of any funds for the following purposes:

(a) For payment of accident or illness-related hospitalization in excess of thirty (30) days; and

(b) For payment to a Contributor who has been subsequently rendered permanently totally disabled as defined under the Employees Compensation Law, Social Security Law and Government Service Insurance System Law.

SEC.14. Non-Assignability. – No portion of the assets of a PERA may be assigned, alienated, pledged, encumbered, attached, garnished, seized or levied upon. PERA assets shall not be considered assets of the Contributor for purposes of insolvency and estate taxes.

SEC.15. Rules and Regulations. – Consistent with the policy of promoting transparency in PERA investment and thereby affording protection to the Contributor, the Department of Finance, the Bureau of Internal Revenue and the concerned Regulatory Authorities, with the Bangko Sentral ng Pilipinas as lead agency, shall coordinate to establish uniform rules and regulations pertaining to the following subject matters:

(a) Qualification and disqualification standards for Administrators, Custodians and Investment Managers, including directors and officers thereof;

(b) Qualified and/or eligible PERA investment products;

(c) Valuation standards for PERA investments;

(d) Disclosure requirements on the terms and conditions of the PERA investments;

(e) Minimum requirements imposed on the Administrators as regards inculcating financial literacy in investors;

(f) Ascertainment of client suitability for PERA products;

(g) Fees to be charged by the Administrator, Custodian or Investment Manager shall always be reasonable and approved by the concerned Regulatory Authority;

(h) Record-keeping, reporting and audit requirement of Administrators and Custodians pertaining to records for all contributions, earnings and total account balances; and

(i) Other pertinent matters to be determined by the Regulatory Authorities.

SEC.16. Administration of Tax Incentives. – The BIR shall issue the implementing rules and regulations regarding all aspects of tax administration relating to PERA. The BIR shall coordinate the qualification standards of the Administrator with the Regulatory Authorities.

SEC.17. Penalty. - A fine of not less than Fifty thousand pesos (P 50,000.00) nor more than Two hundred thousand pesos (P 200,000.00) or imprisonment of not less than six (6) years and one (1) day to not more than twelve (12) years or both such fine and imprisonment, at the discretion of the court, shall be imposed upon any person, association, partnership or corporation, its officer, employee or agent, who, acting alone or in connivance with others, shall:

(a) Act as Administrator, Custodian or Investment Manager without being properly qualified or without being granted prior accreditation by the concerned Regulatory Authority;

(b) Invest the contribution without written or electronically authenticated authority from the Contributor, or invest the contribution in contravention of the instructions of the Contributor;

(c) Knowingly and willfully make any statement in any application, report, or document required to be filed under this Act, which statement is false or misleading with respect to any material fact:

(d) Misappropriate or convert, to the prejudice of the Contributor, contributions to and investments or income from the PERA;

(e) By gross negligence, cause any loss, conversion, or misappropriation of the contributions to, or investments from, the PERA or

(f) Violate any provision of this Act or rules and regulations issued pursuant to this Act. Notwithstanding the foregoing, any willful violation by the accredited Administrator, Custodian or Investment Manager of any of the provisions of this Act, or its implementing rules and regulations, or other terms and conditions of the authority to act as Administrator, Custodian or Investment Manager may be subject to the administrative sanctions provided for in applicable laws. The above penalties shall be without prejudice to whatever civil and criminal liability provided for under applicable laws for the same act or omission.

SEC.18. Abuse of the Tax Exemption and Privileges. - Any person, natural or juridical, who unduly avails of the tax exemption privileges herein granted, possibly by co-mingling PERA accounts in an investment with other investments, when such person is not entitled hereto, shall be subject to the penalties provided in Section 17 hereof. In addition, the offender shall refund to the government double the amount of the tax exemptions and privileges enjoyed under this Act, plus interest of twelve percent (12%) per year from the date of enjoyment of the tax exemptions and privileges to the date of actual payment.

SEC.19. Separability Clause. - If any provision or part hereof is held invalid or unconstitutional, the remainder of the law or the provision not otherwise affected shall remain valid and subsisting.

SEC.20. Repealing Clause. – All laws, decrees, orders, rules and regulations or parts thereof inconsistent with this Act are hereby amended or modified accordingly.

SEC.21. Effectivity. -This Act shall take effect fifteen (15) days following its publication in a newspaper of general circulation: Provided, That the tax incentives granted hereunder shall take effect on January 1, 2009.

This Act which is a consolidation of Senate Bill No. 1882 and House Bill No. 3764 was finally passed by the Senate and the House of Representatives on June 10, 2008.

Approved: August 22, 2008

Why I Pay in Cash and Not with Credit Card

Consider this scenario.

You’re in a posh hotel cafe hanging out with your friends. You call the waiter to get your bill. He comes back — 260 pesos for a cup of extra thick hot chocolate served in fine china. You hand out your Visa.

Admit it. In that kind of setting, it’s sexier to pay with plastic instead of some paper with a dead president on it.

If that was me, though, I would have paid with cash, be it as crisp as chicharon or as soggy as old pechay. Less trouble for me.

Here are four reasons why I prefer cash over card.
(By cash, I mean cash I earned and not loaned. By “paying in cash”, I mean purchases in malls, markets, bargain shops, etc., and does not include huge things like cars, houses, and other things you normally pay for on installment.)

1. I lose the tendency to overspend by limiting my purchases with what I have in my wallet. This is especially useful when grocery shopping. I mean, we all do have that urge to get things not in the list, but with just the right amount of cash in the pocket and some will, I don’t. Besides, it will be too much of a hassle to find the nearest ATM machine (of my bank, take note, to avoid transaction charges) just to buy those stuff not needed.

2. Unplanned purchases are avoided. I won’t be able to buy those yummy-looking pumps if I only have “taxi money” in my wallet, will I?

3. I can “feel” my purchases. Yes, card purchases are quite “numbing”. You won’t feel how much you have spent on something until the time you see the monthly bill. More often than not, when you see it, it hurts. Especially if you have not kept track.

4. Discipline. Yes, discipline. With just having enough, I am are forced to discipline myself regarding my spending habits.

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Note: I do use my card on some things like airplane tickets and hotel rooms. However, I avoid using it on things I don’t need and I pay on time.

Models, China, and the Struggling Dollar

This article from SPIEGEL ONLINE says a lot about the dollar’s state. I won’t even elaborate anymore.
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SPIEGEL ONLINE – November 13, 2007, 02:18 PM
URL: http://www.spiegel.de/international/world/0,1518,517060,00.html

WEST WING

A Pearl Harbor without War

By Gabor Steingart in Washington, D.C.

The dollar crisis has politicians alarmed worldwide. The US currency has lost 24 percent of its value since the introduction of the euro, and now there is even a chance that China could abandon its policy of pegging its currency to the dollar — a problem the United States should take very seriously.

DPA

Translated into Texan, what the Chinese politely told the Americans last week simply means: Unless something happens, all hell will break loose.

What do Brazilian supermodel Gisele Bündchen and the People’s Republic of China have in common? The answer, as of last week, is that both distrust the dollar.Patricia Bündchen, the twin sister and manager of the world’s top model, announced that Gisele now prefers to be paid in euros rather than dollars. Almost simultaneously, the Chinese central bank predicted that the dollar is likely to lose its status as the world’s leading currency.

One could easily overlook a supermodel’s currency preferences, but China is a different story. It’s the beast breathing down America’s neck.

The most important country in the world for the United States isn’t Great Britain, Germany, Saudi Arabia, Russia or Iraq. China holds that dubious distinction, because it is also the country the US can least do without. Without its willingness to buy an almost unlimited supply of US treasury bonds, there would be no American spending miracle. Without a spending miracle there would be no economic growth. In other words, without China the US superpower would lose a significant share of its economic clout.

Great Christmas Shopping Tips

‘Tis the season to be jolly… and shop for gifts.

It’s fun to shop, but I must admit, Christmas shopping can be really stressful.

Here are my tips for stress-free shopping.

1. Set your budget. Before I actually make my Christmas list, I first decide on how much money I can afford letting go.

2. Make your gift list. Almost all of us do this, I think. My list would be separated into four categories. (a) Family – mom, dad, sister, brothers ; (b) extended family – lolo, lola, cousins, titos, titas ; (c) Best friends – friends I often see; (d) Acquaintances – officemates, etc.

3. Set an amount per gift. Beside every name or group in this list, I put the estimate amount of my gifts. Then after that, I add everything and see if the total amount fits my set budget (see No. 1).

4. Assign possible gift options. Before I hit the stores, I put possible gift items that I can get for each person which will be within the amount that I have set (see No. 3).

5. Buy in bulk. Bulk items are cheaper. ‘Nuff said.

6. Personalize. I get creative when giving gifts for let’s say, officemates. I would sometimes make desserts and ribbon them. Or buy bulk cookies, candies or something. Repack them and put colorful ribbons.

7. Schedule your shopping. This saves you both money and time. Set a shopping day. Find out sale schedules and bazaar schedules that interests you. Also, being early eases some of the stress.

8. Hunt for the best deals.

9. Give. Always give something for the less-fortunate. It feels great for both you and them.

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Here are Christmas shopping tips I got from the Philippine Daily Inquirer, Take Charge of Your Money.

The Rule of 72: What is it?

I learned this when I was 25 years old.

This rule was never taught in elementary, or even highschool math. Yet, this very useful tool is so easy to understand.

Simply put, the Rule of 72 should determine how long it would take for an investment to double its amount given a fixed annual interest .

For example, Php 100 invested at 10% would take 7.2 years to become Php200. Easy, right?

Here’s the Formula: No. of years = rate / 72.

So now, how do we use this rule?

Here, look. Let’s say you put that extra hundred in your pocket in a regular savings account. If you let it sit there and forget about it, will take you approximately 72 years for your hundred to turn into Php200! (I’m assuming savings gives us 1% rate of return.) That’s a long, long, long, time.

But here’s what I learned in Investopedia.com. Apparently, the Rule of 72 is only fairly accurate for low rates of return. As the rate gets higher, the rule gets less precise.

But then again, we can always use the future value formula if we want accuracy.

The Money Paradox by Efren Ll. Cruz

Funny, I haven’t thought about this until Sir Efren posted this in our yahoogroups.

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Money	High Price/Return	Low Price/Return
Spending	with warranty	without warranty
Investing	not guaranteed	guaranteed

by Efren Ll. Cruz, RFP

Are you an impulse buyer?

I’m sure you are, if you got to read this far.

I must admit, there were times when I considered myself an impulse buyer.

When I was in college, my favorite weekend past time was to visit my favorite bookstores (plural, mind you). I’d stay there and browse every aisle. Eventually, when I leave the place, after hours of immersing myself in “literature”, I’d have bought myself a book. Did I need the book?

No.

Same goes for those cute pairs of slippers at 50% off. Those one-of-a-kind dangling earrings in the little shop around the corner. That new mp3 player… And the list goes on.

So I found this article by Marshall Loeb and I’d like to share it with you.

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Six ways to curb impulse spending

By Marshall Loeb, MarketWatch

Last Update: 12:01 AM ET Oct 23, 2007

NEW YORK (MarketWatch) — Is impulse buying taking a heavy toll on your budget? Here are six ways to get a handle on your spending:

1. Identify your triggers. Many people use shopping as an emotional outlet. But letting your emotions dictate your spending is nearly always a bad idea. To break yourself of the habit, try to determine what prompts you to spend unwisely and take steps to change your behavior.

2. Avoid temptation. If you’re inclined to overspend, consider a self-imposed ban on window shopping, casual browsing and unnecessary trips to the mall. Hint: If you know you’re going to be in a situation where you’re likely to be tempted, leave your credit card at home and only bring as much cash as you absolutely need.

3. Be a cautious consumer. You may think you’re immune to advertising, but even the savviest shoppers fall prey to marketing tactics now and again. Next time you find yourself eyeing a “new and improved” product, ask yourself why you feel compelled to buy it. Will that new golf club/razor/skin cream substantially improve your life or just deplete your bank account?

4. Take a time-out. If you stumble on a “must have” item, don’t get caught up in the excitement, advises MSN Money columnist Liz Pulliam Weston. Take a deep breath and walk away. Give yourself anywhere from a few days to a few weeks to figure out if this is something that you can afford and really need. After the cool-down period, if you can truthfully answer yes to both questions, go ahead and splurge.

5. Remember long-term goals. Before you buy, ask yourself if you’ll get more long-term satisfaction out of owning this item, paying down your debt or putting money toward that dream vacation. You may get a temporary boost from buying that scarf, but that doesn’t mean it’s the best use of your money.

6. Check you balance. If you find yourself standing in the checkout line, ready to buy something you’re not sure you can afford, hold off, suggests Weston. Go to your local bank or log on to your bank account online. Once you’ve viewed your balance, the purchase may appear far less enticing.

Marshall Loeb, former editor of Fortune, Money, and the Columbia Journalism Review, writes for MarketWatch.