Category Archives: Spend

ADVISING SOON TO BE MARRIED COUPLES ABOUT MONEY part 1

Plan, Save, Spend, , , , , , , , ,

So many engaged couples are embarrassed to discuss money matters before they get married.  Based on my experience, if you cannot discuss financial matters with your loved one before you get married, it is almost inevitable that you will have problems related to financial matters during your married life.  It is not the amount of money that you have that matters but what you intend to do with it and how you expect to manage it.  You could be very lucky and have all the money you will need until you retire at the time you get married by virtue of anticipated inheritance.  However, nothing is sure in this world and all of that could easily be lost with wrong management of finances.

Many times, the family environment you grew in will dictate your reaction to money.  One of you may be always saving or even downright stingy and the other might not care about money and may even be a spendthrift.  During the courtship period, your real personalities may not be immediately obvious since you are trying to show your best side.  I suggest that you tell each other frankly how you view money.  Ask each other how you will view your success and the role of money in that success.  If it turns out that your ideas about finances are not compatible, both of you will have a better understanding on how to accept each other for what you are or to agree on how you will both overcome the differences.  There is also the option to postpone the marriage or cut the relationship if the issues are truly irreconcilable and you can see that love might not be enough, in the long run.

You have to both agree on your lifestyle. Understand how much money and also how much debt each of you already have.  If there is debt, you have to agree on how it will be paid.  Be open about how much each of you earns and what you expect to be spending as a married couple.  Do not leave the decision of what to spend on a day-to-day basis.  This could lead to unnecessary misunderstandings on how much each should be spending on specific items.  Having a budget will help you agree on the kind of lifestyle you should live to be able to reach certain goals.  For example, you can aim to have a car within a year, a house within five years etc.

Having children is also another matter that has to be discussed in relation to finances.  How you raise your children will depend on the time you will have.  If both of you have to work for your chosen lifestyle, obviously, you will have to share the raising of your children with yayas or your parents.

More on this in the next blog.

Parents Without Money

Loan, Plan, Save, Spend, , , , , , , , ,

I received this comment from “Boy Kamote” on a previous blog when I wrote about how we should teach our children about money.

“Sir sa mga nasabi o nabangit po ninyo ay sang ayon po ako..sa mga may kaya at panggitnang klasipikasyon na mga magulang ay maari nga nilang ipasunod sa kanilang mga anak… paano nakapagtatabi ang isang tao para sa ibang bagay kung hindi naman sasapat sa isa man lang….yun kalidad na bibilin sa palagay niyo po ba makapamili pa kung alin ang maganda at mura.matibay at may pangalan…paano magiging wise ang isang bata sa pamimili kung hindi niya nga kayang bilhin..o ang dungisin ay papasok sa isang mall nanglilimahid sa dumi at amoy siya bay papasukin hindi diba..alam ko poy kagalang galang at matalino,eh ito po lamang ay isang opinyon sa isang sabihin natin na di naman tayo pantay ng antas ng talino at pamumuhay…paano naman po ang mga magulang na ala man lang pera na maipapakitang ehemplo sa kanilang mga anak….yung mga anak na ala pa sa tamang edad ay naghahanapbuhay na para kumita,,kung ikaw na magulang ng ganun bata ano sasabihin mo pa ba o ipapaaral sa kanila ang mga sinasabi mo,,,baka sagutin ka ng wag mo akong pakialaman…buti sana kung sobra o sapat ang kinikita pero hindi eh salat na salat pa para sa sikmura..nakalungkot man pong isipin yan ay isang bantad na katotohanan..ano ba ang dapat na isaisip pag ikaw ay may pera para sa isang simple at mahirap na magulang…di bat ang mapakain mo ang iyong pamilya ng may lasa lasang pagkain..at pag silay nas hapag na ng kainan ang masilayan mo silang masaya habang ninanamnam ang konting biyaya na napagsasaluhan..ano ba ang pakiramdam dibat nakapagpagaan ng kalooban di bale ng ala kang naitabi at masasabi mo sa iyong sarili na bahala na bukas at sanay palarin na naman na makahanap ng pera para may maipangtustos sa pang araw-araw…”

Related to this same article is a comment from “Sam” who says: “The best lesson you’ll give your child is about sharing money. Command it, not money commanding you!”

Boy Kamote is right that the advice I give are really for people who are earning some money. This is my chosen advocacy because of my life experiences that I can share. It is what I know best so I choose to share this. But more than this, my advocacy calls for the elimination of a “mindset of entitlement”. This is the attitude that makes people believe that they have the right to demand “help” from the government, their communities and their churches without having to work for it and thus deserve it. They grow up with the misplaced value that money is given, not earned.

What Sam said is also correct. However, we can only share what we have. Otherwise, we will not be sharing anything worthwhile. This is where I come from. We need to teach everyone about the need to earn, save, make your savings grow and share the savings they have grown with others.

I teach that as long as we are earning some regular income, we can save. The savings may be minimal but if we have the discipline and determination, we can aspire for greater savings over time. After all, we have so many examples of people who rose from almost nothing into very successful people.

I agree that some people are so poor that they cannot even buy food for their children. Such cases are very complex and there are people who choose to help in working on advocacies related to this. Let me just say that for those who have not enough, they still have their intellect and will. Money and all things material are mere creation from ideas. For as long as we are alive, we can think and create good things for us, provided we have the right mindset, the will to improve our lives.

When you can’t give good example about money.

I agree that it is natural that we want to be able to give the best food, shelter, clothing and everything that our family needs. I agree that if we have nothing, it is tempting to give them a moment of joy and forget about tomorrow. But I don’t agree that we should give or spend without thinking of tomorrow. It is an obligation not only to provide but also to leave something for tomorrow. “Bahala na” is the worst mindset to live by!

There are people who have risen from the poorest of the poor and made something of themselves. If we go by the thinking of Boy Kamote, that is not possible. But it does happen so it is not just a matter of money; it is an attitude and mindset inculcated in the children.

I think that the parents or guardians of such children taught them good VALUES from the time they were small. Values most important are respect, honesty, integrity, resourcefulness, sincerity, discipline, determination, decisiveness, sharing and others. If my child were to reply to me in a manner like “wag mo akong pakialaman…buti sana kung sobra o sapat ang kinikita pero hindi eh salat na salat pa para sa sikmura.”, I think I would consider myself a failure in teaching my child many of the said virtues.

Since Boy Kamote wrote in Tagalog, here is a Tagalog translation:

Tama si Boy Kamote na talaga namang para nga sa mga kumikita ng pera ang mga payo ko. Ito ang pinili kong adbokasiya dahil na rin sa aking mga karanasan. Ito ang alam ko nang husto kaya’t ito ang pinili kong ibahagi. Mas mahalaga ay ang aking adbokasiya na dapat ibasura natin ang pananaw na may utang sa atin ang ating gobiyerno at ating komunidad kung kaya dapat sila ay mag bigay ng tulong kung tayo ang may pangangailangan. Itama natin itong pananaw na ito sa isang saloobin na ang tulong galing kaninoman ay dapat karapat-dapat sa tumatanggap.

Tumpak rin ang sinabi ni Sam. Ngunit, maari lang nating ibahagi ang meron tayo. Kailangan nating turuan ang lahat tungkol sa pangangailangang kumita, mag-ipon, magpalago ng naipon, at magbahagi ng biyaya sa kapwa.

Lagi kong sinasabi na hangga’t kumikita tayo, maari tayong mag-ipon. Maaring maliit lamang ang ipon ngunit sa tulong ng disiplina at determinasyon, tiyak na lalago ang ipon. Sa katunayan, napakaraming tao na ang nagtagumpay bagama’t nagsimula sa wala.

Totoong may mga taong lubos ang karukhaan na kahit pagkain na lamang ay hindi nila maipagkaloob sa mga anak. Masalimuot ang mga kasong ganito at may mga tao at ibang grupo na nagtataguyod ng mga adbokasiyang kaugnay dito. Ngunit tandaan na bagama’t kapos sa pera, may taglay pa rin tayong karunungan at pagpapasya. Ang pera at mga materyal na bagay ay pawang mga likha lamang ng karunungan at ideya. Hangga’t tayo’y nabubuhay, maari tayong mag-isip at lumikha ng mga bagay na ikabubuti natin, basta’t may tamang pag-iisip (mindset), at ang kagustuhan o pagpapasya (will) na paunlarin ang ating buhay.

Sumasang-ayon ako na likas lamang na maghangad ng pinakamainam na pagkain, tirahan, damit at iba pang pangangailangan para sa pamilya. Nauunawaan ko rin na kapag tayo’y kapos, natutukso tayong piliin ang panandaliang ginhawa at kalimutan ang pangangailangan sa kinabukasan. Ngunit hindi tayo dapat gumastos nang hindi iniisip ang ating kinabukasan. Obligasyon natin na mag-iwan para sa kinabukasan! Wala tayong mararating kung ipinagkakatiwala ang ating kinabukasan sa “Bahala na”!

May mga taong nagtagumpay bagama’t nanggaling sa labis-labis na kahirapan. Kung paparisan ang pag-iisip ni Boy Kamote, hindi posible ang ganitong tagumpay. Dahil marami na ang umasenso mula sa kahirapan, masasabing hindi lamang pera ang kailangan, napakahalaga rin ng tamang pag-iisip (mindset) at pagpapasya (will) na naituro sa mga bata.

Sa tingin ko, ang mga umasenso mula sa kahirapan ay iyong mga naturuan ng tamang pagpapahalaga (values) habang sila’y bata pa. Ang mga mahahalagang maituturo sa mga bata ay ang: paggalang, katapatan, integridad, pagiging maparaan, sinseridad, disiplina, determinasyon, maagap na pagpapasya, pagbabahagi at iba pa. Kapag sinagot ako ng aking anak ng “wag mo akong pakialaman…buti sana kung sobra o sapat ang kinikita pero hindi eh salat na salat pa para sa sikmura”, sa tingin ko’y nabigo akong ituro sa kaniya ang mga tamang pagpapahalaga.

Slow is Fast

Invest, Plan, Save, Share, Spend, , , , , , , , ,

Spiritual and inspirational articles abound to lift up our lives. What I noticed though is that we tend to compartmentalize our lives. In particular, our financial lives are considered by most as separate from their spiritual and intellectual activities. The fact is that all of these are intertwined. Since I have focused my advocacy on teaching personal financial management, I frequently interpret these inspirational principles in the light of our financial lives.

Borrowed from Mac Anderson’s “The Nature of Success”, Mr. Anderson talks about a lesson he learned from a friend’s grandmother. Mac was having such a rough week and his friend shared with him what his grandmother told him to always remember: ‘Inch by inch, life’s a cinch. Yard by yard, life is hard.’”

Mac took the line to heart and took out a piece of paper and listed all the things he had to do in the next three days. As he finished each task, he crossed it out from the list. Three days later, he crossed out the last task left on the list. He felt great!

As Mac explains, “…Success doesn’t come cascading like Niagara Falls; it comes one drop at a time through short-term, realistic goals. If you believe you can do something (the goals are realistic), you’re likely to be highly motivated. If, however, you think you can’t (because the goals are unrealistic) your motivation level falls greatly…”

The same principle applies in each one’s personal financial life. I keep emphasizing the same principle as explained in “Making Your Money Work”. THE QUICKEST WAY TO GET RICH QUICK IS TO GET RICH SLOW.

Unfortunately, more people prefer to get rich the easy way and as fast as possible. They want to enjoy the money they believe they will be getting very quickly. This is why scams continue to proliferate and fool so many people.

Scams give promises of bigger than normal income every month or even everyday, in some cases. It is so easy to want to believe when the first thought that should come to mind is if the promise is even realistic. If it is not, then why even be motivated to believe in it. This is when the next part of the scam comes in. They give the names of people who have already invested and are already receiving the returns. When you check with these people if the claim is true and they so confirm, the inevitable follows. You end up investing and sad to say, the “Get Rick Quick” becomes “Lose Everything.”

In some cases, at the start, the money does come in as expected. As the money comes in though, it is almost automatic that the money is spent in frivolous WANTS. After all, more money is expected to come in regularly so why not enjoy. Some scams last for years and at the end of it all, the scammer tells the investor that the investor got his money back anyway through the regular interest paid. That is true but it has all been spent. At the end, the Investment is all gone and even the WANTS purchased are no longer important.

In a real investment with realistic long-term goals, the returns come in, reinvested (compounding principle) and kept intact. At the end of the period, both the investment and the earnings are kept safe.

Now, while you are doing the foregoing, remember what author Swami Avadhutananda says about Two Days We Should Not Worry. It is really very important to understand not only for the actual lesson stated but also for the implications in one’s financial life. It goes this way.

“There are two days in every week about which we should not worry,
two days which should be kept free from fear and apprehension.
One of these days is Yesterday with all its mistakes and cares,
its faults and blunders, its aches and pains.
Yesterday has passed forever beyond our control.
All the money in the world cannot bring back Yesterday.
We cannot undo a single act we performed;
we cannot erase a single word we said.
Yesterday is gone forever.
The other day we should not worry about is Tomorrow
with all its possible adversities, its burdens,
its large promise and its poor performance;
Tomorrow is also beyond our immediate control.
Tomorrow’s sun will rise,
either in splendor or behind a mask of clouds, but it will rise.
Until it does, we have no stake in Tomorrow,
for it is yet to be born.
This leaves only one day, Today.
Any person can fight the battle of just one day.
It is when you and I add the burdens of those two awful eternities
Yesterday and Tomorrow that we break down.
It is not the experience of Today that drives a person mad,
it is the remorse or bitterness of something which happened Yesterday and the dread of what Tomorrow may bring.
Let us, therefore, Live but one day at a time.”

This should not be interpreted to mean that we should live day to day without planning for tomorrow. On the contrary, the author simply says that though we cannot change the past, we should and do learn from it. With these lessons, we can plan for our future but act without worrying. Failure should not be feared for it is merely a temporary event. If we are to analyze it, living one day at a time simply means make the most of today. This supports my basic principle that each person should be preparing for his retirement every day. Otherwise, as he grows older, he will precisely be dreading Tomorrow if he did not prepare. And as he starts worrying that he is not prepared, he will feel all the regret that he did not make use of the time when he was younger.

All it takes is an amount set aside daily and invested on a long-term basis without touching the earnings. Even during these difficult times, keep saving 20% of your income. Live within the 80%. Invest your savings regularly in well-managed funds for at least 5 years. But in doing so, make sure that you set an absolute amount as your goal for specific time periods. This way, you will have a clear basis for determining how much your investments must yield every year (annual rate of return). This then will be your guide in deciding when to liquefy part or all of your investments in the process of monitoring the progress of your investments.

It is easy enough to get into an investment. But the real challenge is knowing when to get out. The typical mistake is to invest with no specific money goal except to maximize growth. They invest based on unreasonable expectations and not on achieving a specific amount for a specific purpose at a certain future date. These are the investors who are able to buy low but end up selling lower because they panic when prices dive unexpectedly. More often than not, they could have sold high but did not, because they assumed that they there is still room for additional gain.

Paanong Huwag Uubusin ang Pera sa Pasko

Invest, Plan, Save, Share, Spend, , , , , , , , ,

Sa mga nakakatanggap ng 13th month pay o bonus sa Disyembre, hindi nakakagulat na ang unang papasok sa isip ay magpakasarap. Maaaring karapatdapat lamang iyon dahil bunga iyon ng iyong pagsisikap at nagtipid ka naman sa mga nakaraang buwan dahil kapos ang kita. Ngunit hindi kailanman ay hindi naman talaga ito “sapat”. Aminin natin na kahit kaya nating mabuhay sa ating kita at nakakaipon naman, hindi tayo nakukuntento at gusto pa rin natin ng “mas malaki pang kita”. At kapag nakatanggap ng bonus, iisipin iyon bilang pabuya sa pagtitiyaga. Marami sa atin ang matutuksong gumasta.

Ngunit kailangang tandaan ang mga natalakay natin sa nakaraan ukol sa Active Income.

– Ang Active Income ay ang kita mula sa pagtratrabaho.
– Kailangang ipunin ang 20% nito.
– Kailangang gamitin lamang ang Active Income sa pang-araw-araw na gastusin, sa savings, at sa pamumuhunan o investments.

Parehong Active Income ang iyong 13th month pay at bonus dahil kung hindi ka nagtrabaho, hindi mo iyon matatanggap. Kailangang ituring iyon bilang Active Income ngunit may kaunti lamang na pagkakaiba. Tutal tinutustusan na ng iyong regular na sahod ang iyong pang-araw-araw na pangangailangan, kailangang mapunta ang iyong 13th month pay at bonus sa savings at investments. Maaaring hindi makatarungang pilitin na ipunin ang lahat ng iyon. Pagsikapan na mailaan ang malaking bahagi ng 13th month pay at bonus sa iyong savings, ang ibang bahagi naman nito ay para naman sa dagdag na gastusin na dala ng pasko. NGUNIT HUWAG ITONG UBUSIN SA MGA LUHO O PAGBIBIGAY NG REGALO!

Passive Income lamang ang pwedeng gastusin para sa mga regalo at parties. Tandaan na ang Passive Income ay iyong kita na nanggagaling sa iyong mga Savings. Darating ang Passive Income kahit magtrabaho ka o hindi.

Tandaan lang na kung gusto mong gamitin ang iyong Passive Income para sa mga pagdiriwang, kapag ginamit mo ito imbes na hayaan iyong tumubo bilang Savings o Investment, kailangan mapalitan mo ito nang sa gayon ay makamit mo pa rin ang iyong Net Worth Goal pagdating ng iyong pagreretiro. Tandaan na ang maginhawang pagreretiro ay nagmumula sa kakayahang matustusan ang piniling retirement lifestyle sa tulong lamang ng Passive Income. Kailangang pag-ipunan ito habang nagtratrabaho pa at kumikita ng Active Income. Kung basta-basta na lamang ang paggamit mo dito, maaaring kapusin ka sa iyong pagreretiro.

Paalalahanan ang sarili na hindi nagtatapos ang buhay sa Pasko at Bagong Taon. Walang masama sa pagbibigay at pamamahagi. Sa katunayan, kapuri-puri ang mga iyon lalo na kung ipinagkakaloob mo iyon sa mga nangangailangan kahit na wala ka namang inaasam na kapalit. Ngunit tandaan na hindi maaaring ipamahagi ang bagay na wala naman sa iyo. Ang iyong unang obligasyong pampinansiyal ay ang iyong sarili. Obligasyon mong magplano at maghanda para sa iyong sariling kinabukasan.

Pag-isipan natin ang ang diwa ng Pasko. Ito ang pagdiriwang sa kaarawan ni Hesu Kristo na ipinanganak sa sabsaban. Ang nakasanayang paggastos at pagwawaldas tuwing Pasko ay gawa lamang ng tao. Ang Pasko ay ang panahon upang magbuklod ang mga pamilya at mga kaibigan upang magpamalas ng pagmamahal at pagbibigayan.

Ito ang ilan sa mga maipapayong paggagamitan lamang ng Active Income at HINDI ng Passive Income:

1.) Tipunin ang mga bagay na hindi na ginagamit sa nakaraang 6 na buwan, dalhin sa opisina at magsagawa ng isang maliit na “garage sale”. Ang mga hindi maibebenta sa mga ka-opisina ay maaari namang ibenta sa ibang lugar o kaya’y ipamigay na lamang sa paboritong charity. Ika nga nila, “One man’s garbage is another man’s gold.” o ang basura ng isa ay ginto para sa iba.

2.) Napakaraming reunions at parties tuwing Pasko. Mas kaunti ang panahong lumahok sa mga kasiyahan kung mauubos ang oras sa pagsho-shopping at pagbili ng mga regalo. Maaaring imbes na magshopping, ilaan na lamang ang oras sa paglahok sa mga nasabing kasiyahan. Mag-isip ng ibang paraan upang aliwin at bigyang kasiyahan ang mga kaibigan. Gamitin ang talento at maghanda ng mga presentasyon; ang saya na maidudulot mo ay maituturing na bilang regalo sa kanila.

3.) Karaniwang gawain ang Kris-Kringle sa mga opisina. Ito ay ang madalas na pagpapalitan ng mga munting regalo na magtutuloy-tuloy hanggang sa huling araw ng opisina bago mag Pasko kung saan ang pinaka-enggrandeng palitan ng regalo ay magaganap. Ngunit nakakabalisa ang Kris-Kringle dahil ang ilan sa mga ito ay hindi agarang nabibili at mapipilitan pa ang mga kalahok na mamili sa huling minuto. Ngunit maaaring magtalaga ng mga regalo na hindi kailangang bilhin tulad ng mabubuting gawain o serbisyo sa pamamagitan ng mga certificates o katibayan. Halimbawa, maaring isaad ng isang regalong certificate ang, “Nangangako akong dadalhan ng lunch-baon isang araw si _________ sa susunod na taon kapag hiniling niya ito sa akin, basta’t abisuhan niya ako ng ____ araw.” Maaari ring ganito ang laman ng certificate: “May libre masahe si ________ tuwing breaktime sa buong buwan ng Pebrero 2011.” Maaari ring, “Hindi ako maiinis kay ________ sa isang buong araw sa Marso 2011.” Maaaring i-claim ang mga certificates sa tamang panahon.

4.) Maaaring pumunta ang mga magkaka-opisina o magkakaibigan sa mga bahay-ampunan, home for the aged o sa mga kulungan imbes na pagpipiyesta. Maaaring magdala ng pagkain at pagsaluhan iyon kasama ang mga binisita.

5.) Imbes na magkaroon ng palitan ng regalo sa opisina, maghanda ng espesyal na package para sa mga mahihirap na pamilya. Halimbawa, maaaring maglaman ang package ng ½ kilo ng bigas, ½ kilo ng asukal, 2 lata ng sardinas, 2 lata ng Vienna Sausage, toothpaste, 2 sepilyo, 2 sabon, 1 kahon ng sabong panlaba, 2 bimpo, 2 kamiseta. Pag-usapan ang kalidad at laki ng bawat item. Maaari ring patulungin ang mga kamag-anak ng mga taga-opisina upang maging mas makahulugan ang gawain ng pamamahagi. Maaari rin itong dalhin sa mga bahay-ampunan, kulungan, evacuation site, atbp, na bibisitahin.

6.) Mahilig ang mga Pilipino sa raffles. Mag-Bingo sa opisina imbes na isagawa ito sa isang restaurant. Maaaring gamitin bilang cash prize sa raffle ang budget para Christmas Party.

7.) Maghanda ng simpleng merienda sa huling araw ng trabaho. Huwag nang gumastos pa para sa maluhong pagkain. Magsaya na lamang sa pamamagitan ng tawanan, kuwentuhan, kantahan, sayawan, at iba pa.

Upang maging mas masaya ang mga gawaing ito, mainam na isagawa ang mga ito sa maliliit na grupo. Kung malaki ang kumpanya, mainam kung nakahati ang mga tao sa mas maliliit na grupo. Ang mahalaga, nagbubuklod ang mga pamilya at mga kaibigan upang magpamalas ng pagmamahal at pagbibigayan bilang pagsalubong sa Pasko.