'Only 1 in 4 Filipinos is Financially Literate-' PDI Editorial Explains

(Originally appeared as EDITORIAL entitled Financial literacy at the Philippine Daily Inquirer's Opinion Section.)

It could no longer be surprising considering how many of those employed have savings which could they rely on in times of need and emergency.  See for instance most Filipino families who were already given the opportunity to reach the middle class but failed to sustain it.  Much more some who were given the opportunity to become wealthy but after sometime has to return to a much worst living condition.

An earlier article from the Philippine Star's Business section puts our country at 68th globally in terms of financial literacy index, according to a study made by the Asian Development Bank (ADB).

Citing a survey undertaken by MasterCard, the Philippines ranked 68th behind Malaysia, Thailand, Hongkong, Taiwan and Singapore.

The Asian Development Bank revealed in a study that the
Philippines does not have a national strategy for financial education.

In the Asia and Pacific region, New Zealand topped the list.

The ADB revealed in the study that the Philippines does not have a national strategy for financial education. In contrast, Indonesia introduced its national strategy in 2010, and India in 2012.

In the Philippines, only the Bangko Sentral ng Pilipinas has its public awareness campaigns on economic and financial issues. Other government agencies that limited initiatives for raising financial literacy are the Securities and Exchange Commission, National Credit Council and Insurance Commission. The private sector unfortunately operates on its own.

The reason?  ONLY ONE in four adult Filipinos is considered financially literate, or understands basic concepts such as interest rate, inflation, savings and debt. This fact highlights the difficult task of both the government and the private sector in expanding public access to financial services.

According to a survey done by international credit watchdog Standard & Poor’s Ratings Services, two-thirds of adults globally are financially illiterate, with only one in three, or 31 percent, showing an understanding of basic financial concepts. The survey findings are said to represent the world’s most comprehensive global measurement of financial literacy to date.

The S&P Global Financial Literacy Survey conducted last year found country financial literacy rates ranging from 13 percent to 71 percent among 143 economies, with Yemen, Albania and Afghanistan at the bottom and Denmark, Sweden and Norway sharing the top spot. The Philippines is ranked with, among others, Vietnam, Cambodia, Nepal, Bolivia, Turkey, India, Jordan, Honduras, Romania, Macedonia, Uzbekistan, El Salvador, Sierra Leone, Sudan, Iran, Kosovo, Nicaragua, Bangladesh, Haiti, Angola, Somalia, Afghanistan and Yemen in the bottom 30 in the survey. Among the Southeast Asian countries included in the survey, Singapore has the highest financial literacy rate at 59 percent, and Cambodia the lowest at 18 percent. Vietnam is the only other economy to score lower than the Philippines at 24 percent.

Younger Asians are more likely to be financially proficient than older ones, according to the survey. Globally, there is also a five-percentage-point gender gap: 35 percent of men and 30 percent of women are financially literate. Gender gaps are present in most countries, even in highly developed ones.

A respondent is judged financially literate if he or she can correctly answer three of four multiple-choice questions on financial concepts:

1) On risk diversification. “Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments?”

2) On inflation: “Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?”

3) On numeracy: “Suppose you need to borrow P100. Which is the lower amount to pay back: P105 or P100 plus 3 percent?”

4) On compound interest: “Suppose you put your money in the bank for 2 years and the bank agrees to add 15 percent per year to your account. Will the bank add more money to your account the second year than it did in the first year, or will it add the same amount of money both years?”

The correct answers are: 1) multiple businesses or investments; 2) the same as you can buy today; 3) P100 plus 3 percent; and 4) more money in the second year.

S&P observed that while the lineup of financial products available in Asia continued to grow rapidly, the survey results suggested that most consumers lacked a general understanding of credit, compound interest and other key concepts. An example is China, where credit card ownership is believed to have nearly doubled since 2011 yet less than half of the respondents could not correctly answer the survey question on interest.

Matthew Bosrock, executive managing director and head of Asia-Pacific for S&P’s Ratings Services, pointed out that understanding concepts like interest, inflation and the importance of savings is at the core of economic development: “A lack of basic financial understanding is one of the factors obstructing faster growth in Asia. This survey gives policymakers the tools to identify the gaps in education and also a chance to improve access to financial products.”

While the government should see to the financial wellbeing of the marginalized sectors, private employers should take responsibility for ensuring that their workers are saving enough for the future. They should put up programs to help ensure their employees’ financial wellness, including those that will help workers be more careful with money, build emergency funds, and cope with financial stress.

In the end, education is key—and not just in high school where many of the financial concepts are taught but not quite absorbed or learned, but in a continuing program until a person’s retirement. Otherwise, financial illiteracy could lead to high debt, loan defaults or, worse, bankruptcy.

How Overspending Can Be Avoided When Extra Money Comes

By:  Gilbert M. Forbes
Financial Wellness, Stewardship Advocate
DepEd CALABARZON

Christmas Season is coming too fast once ber-months is around.  And this month of November, most of our employees or workers in the government sector are starting to receive their bonuses.

Once, we receive additional money, we begin to think of things to buy e.g., new clothes, gadgets, We even justify that it is needed, let say for instance, the need for a heater or a replacement to an aging cellphone.  Until, we just wake-up that none is left already.  Worst case scenario is to be in a budget dilemma because we forgot to buy things that are necessary like the food on the table for Christmas and New Year.  For sure, we will resort to credit or debt which of all the things, should not have happen.

This could be avoided if we will do the following:

1. Budget and carefully plan your expenses.  In your budget, include all your payables and irregular expenses for at least three to five months. Think many times before buying some thing by asking, is it really needed? Is there no other alternative but to buy it?  What will be its effect to my general finances or cash flow?
2. Save It All.  Correct, if you are not in a tight budget, save it all.  Just get the budget for Christmas to your existing irregular expense account savings.  Be sure that what you will take is only the amount budgeted and actually allotted for it.  Don't over-spend, otherwise, your other irregular expense needs in the future could be affected badly and so your monthly cash flow or finances.
3. Invest.  You may get an additional insurance protection if your current protection has not yet reached the suggested minimum.  Or you can get additional health insurance apart from your PHILHEALTH hence it is not usually enough to cover hospital bills whenever ourselves or any member of the family got confined.  The bigger the coverage, the better.

Let us always remember that all financial benefits we regularly receive is not part of our salary and so not part of the so called active income that we are suppose to spent to make a living.  Financial literacy experts are constant and united on their suggestions that it should not be spent, instead save and later make it grow.

After all, delayed gratification today, is worth a thousand joy and peace of mind. We are to choose. For inspirations and increased motivation to start your financial wellness journey. You may also like to attend our free virtual seminars via zoom by registering at  https://402183ph.imgcorp.com/attendance, https://402183ph.imgcorp.com/home/workshop 

Simple Importance of Irregular Expense Savings Account

By:  Gilbert M. Forbes
Financial Wellness, Stewardship Advocate
DepEd Quezon, CALABARZON

Suddenly, your washing machine runs out of order.  Then in just a couple of minutes the CPU of your desktop computer.  As if your day turns to a bad fate, your DVD player too.  What will you do then?  Its still a week earlier before the pay day.  And even if it so, your net salary is just enough for a living.


It would of course be not a big problem if you have a withdrawable savings account in times of unexpected events like this.  This is the so called irregular expense savings account.  A savings account intended for seasonal needs, including emergencies,  tuition fees, birth day party, fiesta etc.

With an irregular expenses account, there would be no problem in looking for money in times of emergencies and seasonal needs. Most of all, you will not be tempted to apply for a loan and have debt.  Of course, having debt will mean you have to pay it later including the interest and its impact on your monthly income would certainly be great for it will mean decrease in your buying capability instead of increase.  But this can be avoided.

Personally, it just happen to us for this year is a good year.  One by one, our household appliances just broke.  The first were our two stand-fan and desk fan last summer.  Then, just more than a month later, our washing machine, then our CPU and CRT monitor and just recently, our two-burner stove was discovered to have a leak.

Just try to imagine if you have no extra cash for the said appliances repair and replacement?  What will you do?  For me, I took the zero interest credit facility to purchase a 16-inch LCD PC Monitor and TV into one at Php3,499.00 only payable for three-months.

You might ask, so you fall into debt.  Yes but its a good debt because we could have paid it in cash but instead of paying it at once, we used first our budget for it from our buffer fund for leverage. The double burner gas stove will follow after paying in full the said monitor.

These are just simple things.  It still doesn't include quite serious matters as family sickness and destruction brought by both natural and man-made calamities.  You are the one to decide folks.

But one thing is sure. We can make things simple or complicated depending on our choice.  So what is your choice then?  

You may also like to attend our free virtual seminars via zoom by registering at  https://402183ph.imgcorp.com/attendance, https://402183ph.imgcorp.com/home/workshop or reading more below:

How Overspending Can Be Avoided When Extra Money Comes

SAVE and Be DEBT FREE by Avoiding Envy and Self-pity

5 Reasons You Can Be Rich, Wealthy and Financially Independent

 By:  Gilbert M. Forbes
DepEd Quezon

All working folks, either salaried workers, professionals or those from the informal economy like all types of vendors, drivers, free lancers, etc.

Are you dreaming of a life of abundance where helping others and giving to charity is no longer a problem?  You are not worried about any unexpected or emergency expenses such as those related to health because there is a fund for it.

You can still continue to work if it is your passion without any financial stress.  We’ll, life of financial stability, abundance or wealth is actually realizable if we know how.

1. Understanding how money works
Money is not actually the root of all evils.  It is the LOVE OF MONEY that is.  Actually, we are equally vulnerable to the devil when we don’t have enough money because we may end up doing bad and evil things like gambling, falling into the trap of debt and corruption.

Money is not a complicated topic, at least, now a-days, because of the ability of self-help books and lots of articles on-line. One needs to browse and study one of these books.

There are books written by successful Filipino Entrepreneurs and financial wellness and spiritual coaches like Francisco Colayco, Bo Sanhez and Chinky Tan.

This blog also offers quite a handful of financial literacy articles that could somehow be of help.  The only key is the interest to learn, internalize, reflect and apply it.

2. Life-long Learning
Never stop learning for the real wealthy people never stop.  Learn from experiences and mistakes so that it will no longer be repeated.  Don’t just go along the tide of a complicated and materialistic lifestyle which only makes our lives difficult.

Distance yourselves from influences which are not in line with your new chosen lifestyle.  Let your immediate circles understand your decision, if not, let the time do it.  Once they saw the result of your decision in the years ahead, they will surely realize your point.  

3. Live below your means
Live at least 10- 20% below your means and save the rest.  You have done it already while you were studying, much, when you were still looking for a job, why not this time?

Involve the family in your decision by explaining them and by educating them too.  Let them have a prospect of the future too. 

Most of the financially stable right now have made a conscious decision to live on less than they make 20 years ago.

They saved a lot until they were able to capitalize on things that will generate more additional or passive income like transport business, hardware, grocery store, agricultural farms like fish pen, rice and corn farm, etc., while others in high yielding time deposits, additional retirement funds, real state, educational and health fund, etc.

Budget and stick to it.  Never mind what the close-minded people will tell or label you.

4. Avoiding bad debt as a deadly virus
Open an irregular and emergency account so that you will not get into the trap of debt in times of seasonal and emergency needs.  Once, you become the bread winner of the family, be fully aware that you will gonna pay tuition and school fees, and most of all pay for hospital or medical needs in times of sudden sickness.

If you have an irregular expense account, then you will no longer be worried about tuition and sudden sickness requiring hospitalization. 

5.  Building assets that earn
Your house, your car, even your jewelries couldn’t be regarded an asset if it don’t give any financial benefit.   These could be liabilities that are reducing your earning potentials towards financial independence and wealth.

A house for instance could be regarded as an asset if your monthly amortization and travel expense is less than or equal to your monthly expected rental and travel expenses to work.

Young professionals and income earners out there particularly the young ones.  Becoming financially independent, wealthy, a millionaire or whatever you want to call it is not impossible. Since you still have all the time and a lot of prospects plus the knowledge to do so, it’s easy. 

Those in the early 30’s, there's still a lot of time to catch up while those in their 40’s, double time.  Those in their 50’s or retiring ones, all you can do now is fix your finances and free yourselves from debt as fast as you can before your retirement.

You may also like reading Save and Be Debt Free!

Stewardship and Financial Wellness

(Mr. Gilbert M. Forbes is an educator who was also a victim of financial ignorance.  Upon stumbling on a financial literacy book a decade ago, financial literacy or wellness has become a part of his personal advocacy aside from politics, good governance, education and environment.  He holds baccalaureate and post-graduate studies from the Philippine Normal University and have been a school head for more than ten years now.)

SAVE and Be DEBT FREE by Avoiding Envy and Self-pity

By:  Gilbert M. Forbes
DepEd QUEZON
Region IV- A CALABARZON

"One of the main reasons why most of us get into debt is because of envy (inggit) and self-pity (awa sa sarili)"  This was what financial and wellness coach Chinke Tan just explained over ABS-CBN in an interview made by the Kabuhayang Swak na Swak.

Graphics uploaded from kukis.org through google.

Years, ago, during the advent, this was also explained by our parish priest.  Envy usually leads us getting into buying things which we can avoid such as new gadgets, branded clothing etc., just because we are envious of our peers.  The fact however is that these things will not define who we are.

Early on, particularly those who were taught the value of simplicity and thrift, those who just get off from abject poverty as a result of new employment and getting educated are taken into this mess due to self-pity.  This two, envy and self-pity are dangerous.

Now, may I ask you, what happened to your SALN and current financial status.  Is it getting better?  Every time we buy something we ask ourselves, do I really need it?  Is there no other options.  Am I not buying or getting into this just because I am shy.

Remember this, true friends will not let us down.  True friends will not put us into trouble.  True friends already know who we are from head to toe.  With regards to our peers be it in the community or in the work place, there are other best ways to prove our worth.  It's in our character, not on what can be seen from the outside.

In the beginning, there might be some questions, commotions.  But it is only temporary.  Once they've got to know more about us, they've got to admire us.  And admiration and respect is totally free.  Isn't it beautiful folks?

The primary key is that we should be contented on what we have right now but not satisfied.  Meaning, we could be contented living in a rented apartment but we are not satisfied because we are planning and working saving to buy a house of our own in the future when we already can.

You may want to read more articles at Financial Literacy and Wellness

(Mr. Gilbert M. Forbes is an educator who was also a victim of financial ignorance.  Upon stumbling on a financial literacy book a decade ago, financial literacy or wellness has become a part of his personal advocacy aside from politics, good governance, education and environment.  He holds baccalaureate and post-graduate studies from the Philippine Normal University and have been a school head for more than ten years now.)

Financial Ignorance Is Expensive

By:  Bo Sanchez
Philippines renowned best selling author, lay minister and entrep

(Excerpts or one of the articles from the book 8 Secrets of the Truly Rich)

"The number one problem in today’s generation and 

economy is the lack of financial literacy."

 — Alan Greenspan

Some people think buying a book like the 8 Secrets of the Truly Rich is expensive.  I also give financial seminars and people think the price we charge is too high.  If you think financial wisdom is expensive, then try ignorance. You’ll realize it’s a million times more expensive.

FACT: We could all be educated but financially ignorant.

For example, in the past 10 years, I’ve lost a lot of money. Simply because I was stupid about money.  After getting married, I was able to scrape a decent amount of savings into our bank account every month. And with some very generous gifts from our ninangs.

During our wedding, after a few years, my savings reached P200,000 plus. (Sssshh. Don’t laugh too hard.)  That was when a friend asked me if I would like to put my money in the investment company she was working for. “You’ll earn two percent a month,” she said, “and you’ll help me earn a commission from your investment!”

And instantly, I invested our P200,000. After all, two percent a month came down to 24 percent a year—so much higher than the banks’ interest. That was also the time when my wife finally got pregnant.  The thought of becoming a father was an incredible feeling.  But together with my excitement was the stark realization that the baby would now be totally dependent on my finances for the next 20 years of his life.

That thought sent chills down my spine.  We borrowed a wooden crib from a cousin and prepared P20,000 for the birth of our baby. We were ready, or so I thought.  During the delivery, my wife suffered heart palpitations reaching 200 beats per minute and the doctor ordered an emergency Caesarian operation.  Yes, I almost lost my wife and baby. That emergency operation saved their lives.  After three days of confinement, I received the bill from the hospital:  P56,000.

Gulp.  Have you ever received a solid punch straight to your solar plexus?  That was how I felt at that moment. So I called my friend and asked if I could get my investment back. Perhaps just P40,000 of my P200,000 to pay the hospital bill.  She said, “I’ll try...”  “Try? Why try? Isn’t that my money?” I asked, “I need to pay the hospital.”  “It isn’t that simple,” she explained. “Your money is being used.” “What do they use it for? Who owns this company anyway? How long have they been in business?” (Do you see how wise I was? I was asking these questions after I invested my money.)

“We’re a small firm that lends money to tricycle drivers.” “What...” Have you ever seen a cat staring at the headlights of an oncoming truck? That’s how I looked. “And collection hasn’t been very good,” my friend’s mutter was barely audible. “So that means...”  “uh, that means we’ll have to wait for new investors to come in before we can return a part of your money.”  In other words, I waited for three years for nothing. After that the company closed, folded up, crashed, disintegrated, imploded, sunk to

the depths of the earth, vanished into thin air.  With my P200,000 with them.

Don’t you see?  I was financially dumb.  Let me give you my credentials: My I.Q. is 132, I have above-average  social skills, I finished Philosophy in college, I took post-graduate courses in Theology, I founded four organizations, and I’m a more-or-less over-all wholesome guy... But all these don’t take away the fact that I was a financial nincompoop.  I was 100 percent financially illiterate!

Here’s what I found out...

You could be a doctor with three PhDs behind your name.

You could be an engineer building huge bridges in your spare time.

You could be a very holy person, praying three hours a day.

You could be a scientist inventing the first car that runs on spit.

You could be 97 years old.

You could be an extremely loving saint.

You could be a diva with the voice of Celine Dion.

But you could also be financially illiterate.

A world-renowned surgeon doesn’t open up a busted TV set and say, “I operate on people, I guess operating on machines would be a breeze.” No, it won’t be. It’s a totally different world.  So it is with money.  Knowing how money works is a totally different field of expertise. Financial ignorance is expensive.

You may also like reading the complete book in this link in PDF Format:  8 Secrets of the Truly Reach
7 Tested Ways to Consider When Buying a House and Lot You Want to Call Your Home  
7 Key Financial Advise to All Young Professionals and Wokers Who Are Starting to Earn a Living  
Things the Rich Do Every Day that the Poor Don’t  
 

Things the Rich Do Every Day that the Poor Don’t

(Based on Tom Corley’s 20 Things the Rich Do Every Day, on his website RichHabitsInstitute.com and Bo Sanchez Don’t Try to Appear Wealthy.)  

Wondering why the rich get richer and the poor poorer.  Aside from gigantic resources, what do the rich do every day that the poor don’t do?  What are possibly their values and attitudes? 

1.      86% of wealthy love to read vs. 26% of poor.

Instead of more hardwork, the poor gambles. 
 (google search photo)

2.      88% of wealthy read 30 minutes or more each day for education or career reasons vs. 2% of poor.

3.      63% of wealthy parents make their children read two or more non-fiction books a month vs. 3% of  poor. 

4.      86% of wealthy believe in lifelong educational self-improvement vs. 5% of poor.

5.      81% of wealthy maintain a to-do list vs. 19% of poor.

6.      67% of wealthy write down their goals vs. 17% of poor.

7.      80% of wealthy are focused on accomplishing some single goal. Only 12% of the poor do this.

8.      6% of wealthy watch reality TV vs. 78% of poor. 

9.      44% of wealthy wake up three hours before work starts vs. 3% of poor. 

10.  74% of wealthy teach good daily success habits to their children vs. 1% of poor.

11.  84% of wealthy believe good habits create opportunity luck vs. 4% of poor.

12.  76% of wealthy believe bad habits create detrimental luck vs. 9% of poor.

13.  23% of wealthy gamble. 52% of poor people gamble.

14.  70% of wealthy parents make their children volunteer 10 hours or more a month vs. 3% of poor.

15.  36% of wealthy bought only second hand cars and most kept their ordinary cars for years versus the 66% of the not so wealthy who bought luxury cars.

16.  100% of wealthy saves 20% or more vs. 2% of poor.

In addition to these lists, most of the really wealthy rarely wore designer clothes, rarely lives in expensive homes, rarely have expensive vacations, rarely bought luxury cars.  They lived way below their earning capacity, so that they could save more and multiply their money through investments and business.  Most of the really wealthy didn’t reside in upscale villages because it would only pressure them to mantain an upscale lifestyle—something they didn’t want to do.  And most didn’t change homes for 30 years or more!  They trained their kids in the values of simplicity, frugality and hard work.

Now, what about us, the middle class and the ‘masses’ or the common people?

7 Key Financial Advise to All Young Professionals and Workers Who Are Starting to Earn a Living

By:  Gilbert M. Forbes
DepEd Quezon, CALABARZON

Do you still remember when you were still studying until the time when you were already looking for a job?  You were able to survive and live within your means given the meager allowance from your parents, siblings or benefactors.  In fact, there are lots of time that you were still able to save from these highly budgeted and exact allowance given to you.

Compare it to your current financial status now that you are already earning for a living as a newly employed worker or young professional.  Are you still able to save?  Is money still a big problem?  Does it still play a big picture in your life? If the answer to all these questions is a resounding yes, then, you could have been going straight to the trap of financial difficulties in unimaginable magnitude as compared before when you were still studying.  You need a total life style check.

(moneytools.org photo)  They should manage money wisely.

First Key.  Reflect and analyze.  What went wrong?  Is your spending habit the same as before or it skyrocketed after finding a regular job. Commonly, once we reached a new level in our lives such as having a regular source of income comes an upsurge in our spending habits.  We begin to need things we don't need before.  These are wants which are not necessary and thus could be set aside like weekly or even monthly dine out with the family to a popular food chain, branded clothing, high-end cellphones, computers even un-planned house repair or renovation and expensive education of siblings.  The right thing to do as advised by various financial coaches is that, an increase or an additional income for the family should not mean an increase in their spending habits.  They advised that, if we are still living with our families, only our share for the food expense and groceries should be added to our regular expenses.  Meaning, if we are spending four thousand a month when we were still in college until the time we graduate and start looking for work, only the share for food, groceries and lets say utility payments should be added and the rest should go directly as savings.

Second Key.  Revisit your goal and life's dream.  Everybody's goal is to achieve certain level of financial security.  Others call it, an improvement in ones living condition.  But given the scenario above, without considering financial coaches advise, it is unlikely that things will get better.  Consider this.  What if there is sudden emergency such as sickness that requires hospitalization among one of the members of the family?  What about when you opt to decide to settle down and start a family of your own?  How will your financial status go along?  Imagine the quality of your life ten to fourty years from now.

Third Key.  Live on less and simplify.  G.K. Chesterton once said that there are two ways to get enough:  One is to continue to accumulate more and more. The other is to desire less.  Bo Sanchez in his bestselling book Simplify and Live the Good Life explains that we should focus on what we have not on what we don't.  It's because, satisfaction doesn't come from getting what we want but from wanting what we already have. "Some take their pleasure from dining in classy restaurants, going on trips . . . and owning the latest home theater equipment.  I've chosen the simpler path: If i can simply be with my wife, or take a quiet stroll under a canopy of stars, or play with a child, or read a good book in my home, or laugh with friends over an instant pancit canton, I consider myself richly blessed," said Bo Sanchez in his book.  Certainly, we could have a lot at the comfort of our homes with our family, friends and the community.  All these for free!

Fourth Key.  Budget and start savings at once.  Start budgeting and along this start also writing down your daily expenses.  Analyze it after a month to know the pattern of your spending and you will be surprised by the result.  You will know that you are spending quite a portion of your monthly pay on things you don't really need or you could be over spending on some that you could cut back later let say cellphone load, bottled water or even softdrinks.  Continue budgeting and listing your daily expenses until it becomes a habit so that it would be easy to track and monitor your expenses.  Once you made it a habit, start saving as much as you can.  Take note, savings is an expense for the future, so a decided or target portion of your income should automatically be deducted to your monthly pay then budget what has been left.  Start saving for the following:

• buffer fund.  Set aside money until you are able to save at least 5-months of your gross salary.  This will give you and your family a fall back in case you got laid off from your work.  You will have enough money that can supply your needs while you are looking for a new job.  If you want six months or a year equivalent of your gross salary, much better.
• irregular expense account.  this is a savings account intended for seasonal expenses such as tuition fees, family celebrations such as birth days, wedding anniversary, Christmas, new year etc.
• protection fund.  if your the sole bread winner, you need to be protected in a form of life or the new one, a variable insurance so that whatever happens to you, your family will be in good hands for a certain period of time.  You may have personal with regards to this matter.
• marrying or settling fund.  For those who are actually of marrying types or whose ultimate aim is creating a family of their own, there is certainly no time and money to waist.  One need to have a longer foresight of the future otherwise, life will be more difficult in the future.  Since, as singles, most are still living with the parents. save as much as you can.  The bigger chunk of your income, let say 50% or even more of it, the better.
• retirement fund.  aside from SSS or GSIS, financial coaches and analyst highly recommend to have an additional retirement fund because your retirement and pension will probably be not enough to live decently . As we age, we would need medications. Right now, there are 3-in-1 retirement fund (health care, life insurance and investment in one) like Kaiser which is a long term plan which covers beyond 60yrs old & above based on the health funds accumulated. Get a quote here https://402183ph.imgcorp.com/quote/kaiser or m.me/financialwellnessclubph
• health care card.  If you are still young, you could also consider getting a health care cards in addition to your Phil Health. If you are the bread winner, you may get one for your dependents too.  It will help and save you from financial problems in the future as such, unwanted or unplanned debt which is a common occurrence. The downside however of healh care card is that there is no investment return like the one mentioned above.  Its up for you to decide however.

 Save, save, and save to earn interest from it instead of the creditor earning so much interest from you through loans.

Fifth Key.  Avoid going with the tide.  Don't let things such as the clothing you wear, jewelries, cellphones you use define yourself.  Aware and financially educated people don't use material possessions as barometer of wealth or financial stability but on your networth instead.  Get along with people who have embraced simple lifestyle and have clear financial goals for their future.

Sixth Key.  Create your financial plan based on your life dreams.  Bo Sanchez explains that writing down a financial goal is an exercise in faith and an exercise in personal commitment.  He said that it helps our mind to open up and think of ways how those goals would be met.  As such, it would led us going back to our divine appointed mission in life- because that was how God was going to provide for our needs and desires.

Seventh Key.  Purify your thinking and motives about money. Money isn't evil.  the LOVE of money is.  Money is something that can be used to love or hate, to build or destroy, depending on how you use it.  In other words, it can make you holy or it can make you evil- much like anything else in life.  Purify your thinking towards money by embracing the truth that God wants you to have some material things to live a human life, enough for your needs and more than what you need, so that you can be generous.  Money should come from our highest values.  Money should be taken as an instrument to do more good.  That is to provide for the basic needs of our families.  To be more generous to those in need.  To support and help our churches and the ministry of your choice.

We should not forget that we could not simply give what we do not have.  But in all of these, put God first!

Reference:  Sanchez, Eugenio R., Jr., Simplify and Live the Good Life, Shepherd's Voice Publication 2008

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7 Tested Ways to Consider When Buying a House and Lot You Want to Call Your Home

By:  Gilbert M. Forbes
DepEd Quezon, CALABARZON

Everybody is excited of owning a house and lot.  But what if suddenly, your excitement turns into a disaster?  This usually happens when ones expectation to the property and the community falls below the perceived and even expected standards.  But these can be prevented if the following tips shall be considered.

1.  Long Term Goal and Income.  Consider your purpose and alternatives.  If you’re currently renting a house and the amount of rent is just enough to pay for the monthly installment of a mortgaged house and lot and the distance difference from the work place as compared to the property you are renting is manageable, you can go for it.  If not, and there are other alternatives, think twice.  You may still need time and possibly is advisable not to venture at having one.  Remember, a house and lot as financial adviser experts are saying will never be an investment unless it creates passive income or once it is sold and created reasonable profit.  You should also consider your current monthly income and your budget.  Should it eat up a sizeable portion of your income and your ability to save for both emergencies and future needs, you should consider post phoning it.  If it will result in over-stretching your budget, you might be having trouble and problems in the future, the worst-case scenario, your property after sometime got foreclosed.

2.      Payment scheme and interest rates.  Don’t be fooled by zero equity and graduated monthly installment schemes because you’ll end up paying more than expected in the long run.  Before getting a real state property like a residential unit, make sure that you have disposable cash or have savings enough to pay for the equity as well as emergency funds to pay for the monthly installments.

Most of us could only afford mass housing units.
(photo courtesy of google search)

Avoid credits e.g., issuing post dated checks for a year on a monthly basis or a cash loan to pay for your equity because it may over-stretched your ability to pay in the future.  This may result in default of payments and the worst case scenario, foreclosure of the property.  Instead of having a graduated installment, choose the fixed monthly installment plan from the very start of the paying period or years.  It will help you see the reduction in your principal, as such, lesser interest payments in the long term.

3.      Developers track record.  You should consider having a background check on the developer.  How long have they been in the business and what kind of social responsibility do they carry.  Don’t be amazed by their catchy marketing phrase, strategies and unresistable pricing and promos.  Consider having a research investigation on their numerous projects.  What are the feedbacks among the existing owners in those projects?  Are they satisfied of how their property turned out to be?  You could also consider the turn-over among their agents and employees plus the working relationships and satisfaction levels among their laborers.  Be reminded of fly by night developers who are after the profit, and of course your money, nothing more nothing less.

4.      Quality and workmanships.  Affordability of the unit should not sacrifice quality and workmanships.  All the specifications in the building plan should have been carefully followed.  Watch out for these particularly on low-end or mass housing units, even the high end ones for corrupt practices is a common place, among the laborers, foremen and project engineers either with the direct or indirect knowledge of the developers.  This usually happens when the workers are underpaid and their privileges are cut short or simply don’t exists at all.  When checking sample units and most importantly the unit you are planning to purchase, bring along with you persons who if not an expert is knowledgeable enough in building and construction who can tell you if the property is worth enough the amount of money you’re going to pay.  Also remember that with the advent of strong typhoons that are now becoming ordinary, it's resistance to this should also be one of the primary consideration.

5.      Location of the property or the subdivision.  The location should not be too far from the urban center.  If you reside in the city, except NCR and other highly urbanized cities in the country, it should be within 5-10 kilometer zone from schools, universities, hospitals, malls, government and business centers.  It should be strategically located that possible commercial growth is happening in 5-10 years as the city center gets crowded and some of the business operations get transferred to the suburbs or areas outside the city.  It will contribute much to the expected increase value of your property.

6.      After sales service and warranty.  Be sure, that after sales service and warranty is clearly stated in the contract.  Based on experience, one year warranty is no good, but 2-3 years is better just in time that construction defects may come out.  If your developer don’t offer it, then you may opt to look for other developers.  There could be better offers than what they can give.

7.      Residents institutional culture, values and orientation.  If the subdivision is no longer new, lets say, three years or more and already has an organized home owners association, consider how rules are implemented and are getting followed.  Consider small bits of traits that should exist in a planned neighborhood being a subdivision perse, e.g., a.) pathwalks, are they not occupied for personal utilization of home owners such extension of their sari-sari stores, talipapa, plants, dog house, car park, etc;   b.) what about garbages and presence of litters particularly in vacant lots;  c.) presence of stray dogs and cats.  The given samples are tests of their values and character.  If you can take it, then go on, if not, find another one or better just stay where you presently are to avoid head aches in the future.

There’s really much pleasure and joy in finally having your dream house that you can call a home of your own.  But owning one don’t merely come with a price.

(The writer has been a home-owner of a mass housing unit for almost eight years now.  He has been a member of their association's election committee since he resided on his unit in 2009 as such have been pretty much aware of what is going on.)