'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.

5 Surest Way to Finish and Graduate from College

By:  Gilbert M. Forbes
DepEd QUEZON, CALABARZON

Most are studying college for the belief that it is the best thing to do so that one can find and land a good paying job in the future.  A good paying job that will improve the family's standard of living. However, for the most poor college student, there is a great uncertainty even if one is full scholar.  Even those already receiving enough monthly stipend as part of their scholarship may still find a hard time.  What can be done:

Images courtesy of google search

1.  Focus on your studies. Avoid all negative influences and don't get into serious romantic relationship as much as possible. Remember, you are studying to graduate and have a college degree and ultimately a good job once graduated and not settle.

2.  Don't be shy just because you couldn't go along with the fashion trend, gizmos, events, parties etc of your classmates, friends and barkada's particularly the financially well-off because they already know and would have actually understood your situation from the very beginning that they got to know you.  Prove your worth in everything that you do with excellence but with humility and love for the glory of  God

3.  Be truthful to yourself and don't pretend that you belong to the well-off or middle class families just to get along with the real ones.  It will not do any good but harm.  Be proud instead of your situation and be the best that you can be.  Remember, you are there to study and ultimately finish not impress the social caste by becoming a social butterfly.

4.  Be extra-productive.  While, in college, studying, you could apply as student assistant in your school or a part time job outside which will help you earn while you learn and improve and enrich your resume' as well. It will put you step ahead once you graduate and start looking for a job. If having a part time job is not feasible, you can try 'direct selling' even multi- level marketing during your idle time.  You could also engage into seasonal business during semestral breaks or help in family income generating jobs.

5.  Leave all your worries to God in prayer and trust Him.  He will surely make a way when there seems to be no way by using other people whom at the least you are not expecting that they will.  Be surrounded by positive and religiously active people.  You could join the parish choir or the youth organization or even offer yourself to minister.

Surely, with diligence, patience and trust in God, you will achieve your dreams.

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  
 

Why Living a Simple Life Style

By Gilbert M. Forbes
DepEd Quezon, CALABARZON

The reasons behind almost all of our financial difficulties are not because our income isn’t enough.  The truth is we always spend more than what we earn.  Looking at other people who receive less than what we receive and yet they survive and remains decent and free of mind bugling debts in their lives is the clue.  Without their knowing, these people live within their means and there is no reason that we couldn’t do the same even if we earn more than the average.  Yet, it is the best thing that we could and should do.  Here are the reasons why.

1. When you are living a simple life style, you desire simple things.
2. You only buy things that you need and not the things you want.
3. You are helping and doing the environment a favor of not over-using its already meager resources.
4. You spend less and save more.
5. You are miles away from being corrupt if thus help limit if not totally eradicate corruption.
6. You have more time for the family because you don’t work for more.
7. You don’t worry a lot and instead have more energies building relationships with the family and others.
8. Since you’re not worried, you’re not either problematic and stressed thus quality of work is maximized and always expected from you.
9. You are healthy and could live longer than the average.
10. You’re savings accumulate to the point that you already have millions without you noticing it.  (One should know how to save and invest properly.  Remember that ordinary savings only offer an average of 3% interest rate, time deposit 6%, while mutual investments and treasury bills 8-12% and more!)
11. You’ll have enough resources to finance your later needs e.g., medicines, medical expenses and relatives will no longer worry for you.  (When we get older, it is a fact that our body our health starts to deteriorate particularly when we are not ordinarily health conscious as few others may do.  It will need more nutritious foods, medical care, and all these are expensive!  Imagine if you have not prepared yourself for it.  Good if we die earlier and at an instant.  God said that we should always be ready, not only for death but for all varying circumstances that we could have control of.)
12. As Bo Sanches loves to put it in his numerous writings and speaking engagements, you will get rich and have the ability to help and give more particularly God’s work.  

When you get rich, you could live on the remaining 10% and yet still live a comfortable life style while giving the fat and remaining 90% to God and the poor, a testament that you have been a good steward.

Isn’t it wonderful!  Come to think of it!

Seven Ways to Avoid Bad Debt (Pitong Paraan ng Pag-iwas sa Masamang Utang)

Sa mga naglipanang produkto ngayon at sa pagnanais nating maging -in sa barkada at sa lipunan, marami sa mga nagsisimula pa lamang na kumita ng pera ang dahan-dahan nang lumulubog sa pagkakautang at kakapusan ng hindi nila namamalayan.  Marami ang hindi pa panahon ng sahod ay kailangan ng mag-cash advance o kaya’y isanla ang kani-kanilang ATM Cards na usung-uso ngayon sa mga pabrika at mga pribadong kumpanya.  Ang mga datihan namang  may pagkakautang at babago pa lamang nakalalaya rito ay ganun din.  Bigla nilang namamalayan na may utang na naman sila na kailangang bunuin at pagsikapang bayaran.  Malimit dahil sa mga gastusing hindi pana-panahon at hindi naman maituturing na biglaan tulad ng tuition, panghanda sa birth day, reunion, paskuhan at iba pa.

Upang huwag mabulid at matukso sa utang, makatutulong ang sumusunod na tips o mungkahi sa bawat isa atin.

• Magbasa, mag-aral, at bumili muna ng mga aklat tungkol sa Financial Literacy bago ang pagporma at mga gadgets.  Sa oras na magkatrabaho tayo at magsimulang kumita. Unahin agad ang magtabi o mag-impok at pagbili ng mga aklat tungkol sa kahalagahan ng Financial Literacy, at Personal Finance upang magkaroon ng kaalaman kung paano at bakit kailangang lumaya sa kakapusan.
• Panatilihin ang dating uri ng pamumuhay at paraan ng paggastos na tulad noong wala pang trabaho. Bilhin lamang ang mga pangunahing pangangailangan sa tahanan.  O kung nakatira pa rin sa magulang, share sa pagkain at iba pang gastusin sa bahay at itabi na lahat ang matitira.
• Magbudget at maghanda ng tinatawag na irregular expenses account o listahan ng mga gastusing pana-panahon kung dumating tulad ng pagbabayad ng tuition, pagbili ng mga uniporme at mga gamit pampaaralan, Pasko, Birth Day, Valentines Day, Anniversaries, at iba pa at isama na ito at paglaanan upang maiwasan ang pangungutang sa panahon na ang mga ito ay kakailanganin.
• Huwag matoto o maingganyong mangutang.  Iwasan at ituring ang utang bilang isang nakahahawa at nakamamatay na karamdaman.  Tandaan na lahat ng utang ay masama kung ito ay nagiging dahilan upang mabawasan ang inyong kita at halaga ng ari-arian o asssets.  Umutang lamang kung gagamitin sa isang negosyo na siguradong kikita.
• Huwag kumuha ng isang bagay na pahulugan o mangutang para lamang bumili ng isang bagay tulad ng mga alahas, gadgets, damit, mga kasangkapan sa bahay at iba pa.
• Panatilihin ang budget sa dating antas kahit na tumaas na ang buwanang suweldo dahil sa mga nabayarang utang, o umento at ibulid ito sa mga nalalabi pang pagkakautang o kung tapos na ay impokin upang lumago sa pinakamabilis na paraan.
• Huwag padalus-dalos at paimpluwensya sa tukso ng materyalismo at ng kapwa at ituon lamang ang tingin sa layuning makalaya sa kakapusan sa pinakamabilis na paraan.
• Maging simple at huwag mag-astang mayaman.  Sa ngayon, hindi pinag-uusapan sa mataas na lipunan kung anong mga mamamahaling gamit meron ka kundi una muna rito ang uri at laki ng iyong mga investments.

Tandaan, na malaki ang tulong na magagawa sa atin kung tayo ay walang masamang pagkakautang sapagkat iwas isipin din bukod pa sa mas mapapabilis ang ating pag-iimpok.

Maaari ring tunghayan ang sumusunod:

Basics on Personal Finance

Pagiging Mayamang Tunay (Being Truly Rich: A Series on Financial Literacy and Personal Finance in Filipino)

Being Truly Rich: Gaining Financial Freedom (Paglaya sa Kakapusan) Second Part in a Series  

Knowing How Financially Healthy or Un-healthy We Are (Being Truly Rich: Third Part in a Series)

Eight Steps to Get-out of Bankruptcy and Debt (Walong Paraan ng Paglaya sa Pagkakabaon sa Utang)  

Financial Education, A Must for Teachers   

SALN Preparation: Basis of Knowing How Financially Healthy or Un-healthy We Are (Being Truly Rich: Third Part in a Series)

Ni:  Gilbert M. Forbes
DepEd QUEZON, CALABARZON 

Sa ikalawang serye, nalaman natin na na ang kayamanan o paglaya sa kakapusan ay ang pagkakaroon ng salapi na pangtustos sa oras ng ating pangangailangan. Ang ating pangangailangan sa araw-araw ang magtatakda kung ano ang sapat na kayamanang akma para sa atin. Ang ating pangangailangan sa araw araw ay dapat iakma sa ating kakayahan. Dapat tayongmamuhay kung ano lamang ang ating kaya.  Ito ang tinatawag na simpleng pamumuhay na maituturing na malayo sa masyado ng materyalistikong uri ng pamumuhay ngayon.

Pero pano tayo magsisimula.  Nasaan na nga ba tayo kung ang paglaya sa kakapusan ang pag-uusapan?  Upang malaman natin kung nasaan na nga ba tayo financially ay kailangan nating malaman una-una ang ating net worth.   Ang net worth o kabuuang halaga ng ating pera at ari-arian minus lahat ng uri ng pagkakautang.  Ang net worth ay nakikita sa yearly Statement of Assets and Liabilities (SAL) na ating inihahanda.  Kaya mahalaga na maihanda ito ng tama kahit na ordinaryong tao lamang tayo at walang back ground ng accounting.

Lahat ng nagnanais lumaya sa kakapusan ay dapat na naghahanda nito.  Narito ang ilang bagay na dapat maunawaan sa paghahanda ng ating SAL.  Steps in the preparation of SAL.

1.  Alamin ang kabuuang halaga ng ari-arian sa pamamagitan ng paglilista at pagsasama-sama ng kabuuhang halaga ng lahat ng ito na maaaring kapaluuban ng sumusunod:

• Raal Properties like House and lot, land, residential lots, agricultural lands, buildings, and the like either mortgaged or fully paid
• Personal properties e.g. car, jewelries, books, clothes, CD/VCD/DVD collections, toys, antiques, home appliances and utensils, cell phones, computer either desktop, laptop or net book, home furnishings, etc.
• Bank savings accounts and time deposits 
• Private and government insurances and pre-need plans cash surrender values
• Stocks, equity or share capital in cooperatives, corporations, or partnerships
• Mutual Fund like PAG-IBIG and MATMAS, total contributions or equity paid.  Pangkalahatang share sa nabanggit na mga mutual aide systems.
• Trust funds like that of GSIS and SSS pension fund, private pension or retirement funds.
• Money Market placements e.g., shares of stocks in the stock market, mutual investment funds, etc.  Ito ang mga perang naka-invest saping puhunan sa malalaking korporasyon bilang isang stocks holder na maaaring tulad ng MERALCO, PLDT, ABS-CBN, SAN MIGUEL atbp.
• Receivables, advance deposits or payments on leases, royalties.  Mga perang tatanggapin pa lamang bilang kabayaran sa mga pautang, mga paupahan, at iba pa

2. Alamin ang kabuuang halaga ng lahat ng pagkakautang na maaaring kapaluuban ng sumusunod:

• Personal Loans.  Ito ay kinapapalooban ng pagkakautang sa iba’t-ibang tao, ahensya at iba pa maliban sa mga bangko, credit cards, GSIS, SSS, at PAG-IBIG
• GSIS, SSS and PAG-IBIG loans
• Bank Loans
• Credit Card Payables
• Mortgage payables e.g., house and lot or car.  Tinutukoy nito ang kabuuhang natitira pang bayarin alinsunod sa haba ng panahon ng pagbabayad na napagkasunduan
• Policy Loans to different insurance and pre-need companies
• Remaining premiums payables of all insurances either life, accident, memorial, and others
• Remaining premiums of pre-need plans like term retirement plans, memorial plans, educational investment plan, health care plans, etc.

3. Matapos na makuwenta ang kabuuhang halaga ng mga ari-arian at mga pagkakautang o liabilities, ibawas ang liabilities sa assets.  Ang resulta negatibo man o positibo ay ang ating net worth.

Ang ating net worth ang magsisilbing batayan ng ating plano o naisin upang tuluyang makalaya sa kakapusan.  Makatutulong nang malaki kung babalikan ang mga salik na hindi nakatulong upang maiwasan at tuluyan na itong matigil samantalang maipagpatuloy naman at lalo pang mapabuti ang mga salik na nakatulong.

Ang paglaya sa kakapusan ang katuturan kung bakit tayo kumakayod bukod sa layuning matugunan ang ating mga pang-araw-araw na pangangailangan dahil kung hindi, ay ano pa ang maiututuring na kabuluhan ng ating pagsusumikap.

Maaari nyo ring basahin ang sumusunod:

Ang Tunay na Mayaman ((Being Truly Rich: First in A Series on Financial Literacy and Personal Finance)

Being Truly Rich: Gaining Financial Freedom (Paglaya sa Kakapusan) Second Part in a Series

Eight Steps to Get-out of Bankruptcy and Debt (Walong Paraan ng Paglaya sa Pagkakabaon sa Utang)

Seven Ways to Avoid Bad Debt (Pitong Paraan ng Pag-iwas sa Masamang Utang)

Sustaining Gained Grounds on the Way to Financial Freedom (Tuloy-tuloy Tungo sa Kalayaang Pinansyal)  

Financial Literacy, A Must for Teachers

By Gilbert M. Forbes
DepEd Quezon, CALABARZON

(Note:  This articles also applies to all young professionals, newly and currently employed both public and private, members of the informal economy, entrepreneurs, and all who have a way of earning.)

Having no resources to support education in other fields that will warrant a higher income, many opted to take education as a stepping stone but still land as a full time license teacher in the end. Teaching however in the public school at present already command an above the daily minimum wage salary.  In fact, above the entry level salary of call center agents and most professionals starting a career.  So, becoming a teacher and getting employed should be making a difference to the family members and most of all to the individual teacher in the economic bracket where most teachers came.  Handling finances properly should have been a way for a better life - much better life of poverty prior their graduation in college. But this is not the case of some of our new and even senior teachers.

Photo courtesy of Google Images.

Upon permanent employment was the improvement in their buying capacity and so the sudden change in their lifestyle including immediate family members. Instead of putting savings a priority, of increasing their net worth, they stumbled on a spending spree. They start renovating or constructing a new house without careful planning, start to buy signature clothes, gizmos and gadgets. In other words, they start to embrace a middle class life style instead of maintaining their previous simple life style only to find out later that they are already indebted to the neck. What is worst at times, they have exploited family members to join them in the band wagon. The cost, they have become poorer. The worst case scenario is that some family members became dependent which is not the case when the teacher is still studying to be one.

It is very frustrating that many of these teachers education were financed by peoples taxes (for those who studied in state colleges and universities) and subsidized by the government and some private individuals as scholars (for those who studied in some private schools) to help them get out of poverty but end up even poorer due to complicated lifestyle for some after just three to five years in the service or worst after marrying a bum.

On the other hand, others became highly indebted after financing expensive education of younger siblings which don’t match their interest and skills or are just results of peer influence, a fad. These courses charge very high tuition fees and yet the probability of getting employed after graduation is so thin and so appears to be so impractical that it has only put the financier in debt in the end.  Or failure to save or get protection for emergencies like sickness and death.

These situations proved to be not only demeaning and alarming on the part of the teacher experiencing it but to their mission of educating the youth and most importantly to teaching as a profession. Commonly, end result is burnt out and lack of professional direction. Hence, their mind is already pre-occupied where and how to get money to meet their daily needs. They have memorized and master when and how they could renew their loans in different lending institutions in every three months. Some even does it on a monthly basis leaving them with only a quarter of their monthly salary for a living—supplanted by renewable loans from any available credit sources. Indeed, these debtors have mastered the art of loaning and in return have lost their sense of propriety.

With the influence of materialism so strong that some have forgotten the disparity between what is needed and wanted, financial literacy or stewardship is seen to be a form of relief if not the total solution. This is something that should be looked into not only by Teacher Education Institutions but most importantly by the Department of Education to educate teachers, students, and the rest of the stakeholders. The Commission on Higher Education and the Technical Skills Development Authority in partnership with other government agencies should also do the same.

If everybody would be financially literate and educated, they would be motivated to plan for their future, embrace a simple life style or live simply, become responsible stewards, and to acquire the means to help more i.e., to be wealthy or financially independent. As spiritual and religious writers put it, they’ll  be financially independent or get rich for others in their respective pace. Just imagine if all salaried workers both in the government and private sectors including the OFW’s will learn and practice how money works as a result of being financially literate to a lesser extent. Come to think of its effect to the country’s progress and economy!

(This article also applies to other government employees particularly policemen who because of being financially illiterates have become hoodlums and kotongs in uniform. To other government employees and politicians who have become corrupt, private employees and OFW’s who even with their fat salaries have not improved their lives. To micro entrepreneurs and informal sectors of the economy who have stagnated through the years.)

You may also liked:

7 Ways to Avoid Bad Debt

Ang Tunay na Mayaman

The Value of Personal Finance

(The writer is an educator who was also a victim of financial ignorance.  Upon stumbling on a financial literacy book in 2005, he realizes his own situation and soon 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 currently employed as a school head in DepEd.)

What to do with 13th month pay

INQUIRER.net
First Posted 06:15:00 11/04/2008

Common Pnoy psychology when receiving additional money or the money itself is to think of what he can buy out of it. Very few think of saving or doing the things that experts will advise. The following are the things that we could do with our 13th month pay and of course, to our bonus.

1. Pay off debt. If you have substantial credit card debt or other forms of debt, use your 13th month pay to pare down this debt. This will help you shorten the paying period and lower your interest expense. Being debt-free is liberating and will improve your financial standing.

2. Save. If you haven’t started a savings fund at all, this is the time to do so. We’re up for uncertain times ahead financially because of the global financial slowdown, so save when you can. Use the full amount of your 13th month pay to jumpstart your savings fund, or if you have other needs to meet, save at least 10 to 20 percent of your 13th month pay.

3. Invest. Saving is putting away money for the future. Investing is making that money work for you. If you put your money in investment vehicles, it is possible to earn interest or yield on it without you having to put extra work in. Examples of investments you can go into using the amount received as your 13th month pay include: time deposits, mutual funds, unit investment trust funds, and equities or stocks. Time deposits give a higher rate of return than savings accounts, but your money will have to be locked up for the entire term (e.g., 30 days, 60 days, 360 days, etc.). You can have a more diversified investment portfolio using mutual funds and UITFs which are available through financial institutions and banks, respectively. With these, you can invest for as little as P5,000. Mutual funds and UITFs come in different forms and may invest in fixed income instruments, bonds, or stocks, or a combination of these. With direct investment in stocks, on the other hand, you may take your pick of a company stock and invest for the long haul even with just the minimum board lot (minimum investment required). Investments come with certain risks, so study the matter thoroughly before jumping in. We recommend consulting with an investment specialist that can help you determine your risk appetite and investment horizon – two critical things to know before you get started.

4. Start a small business. Yes, you can do this even with just a small capital. Use your 13th month pay, for instance, in buying ingredients and start a cupcake business you can attend to during the weekends. If you like fashion, buy clothes wholesale in bargain centers or have clothing apparel subcontracted then sell these to your friends and officemates. You may be surprised that some businesses can be started with just P5,000 to P30,000 in capital. Even at P500 one could start a small business.

5. Share. The Christmas season is a time for giving and sharing, so why not share your blessings? Many orphanages would be happy to receive a donation for orphaned kids. Some organizations like World Vision and UNICEF also let you sponsor a child’s education for as little as P450 a month or meet their needs in other ways. There are also a lot of people needing medical help, and it will be a blessing to them if funds can be coursed through organizations like Kythe, among others. Those are already five wise ways to spend your 13th month pay, and we haven’t included shopping yet. Think about it and decide wisely.

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