Tag Archives: money

Why is it hard to be financially responsible?

Infographic from the Money Summit & Wealth Expo 2012
Infographic from the Money Summit & Wealth Expo 2012

How do Filipinos rank in financial literacy?
News from Rappler, 16 July 2013

The Philippines recorded 68 index points and ranked 8th among 16 Asia-Pacific countries covered by the latest MasterCard Index of Financial Literacy.

The Philippines’ score in MasterCard’s 4th annual survey is almost the same as the Philippines’ index score of 68.2 in 2011.

“This Index of Financial Literacy is a good measure of whether and how people in the Asia/Pacific region are making informed decisions around their home finances,” said Georgette Tan, MasterCard’s group head of Communications, Asia/Pacific, Middle East & Africa.

The recent survey, released on July 3, was conducted with 7,756 respondents aged 18 to 64 from Asia/Pacific markets between April and May 2013.

Three major components are considered in the calculation of the final index score: basic money management (50% weight), financial planning (30% weight) and investment (20% weight). Regional Aggregates had been calculated via the average of the components of individual countries before these weights were applied.

Philippine respondents rounded up 67 index points for basic money management, 74 index points for financial planning and 58 index points for investing.

The ability to manage money involves skills such as day-to-day budgeting, paying up bills, handling credit commitments and saving up for big purchases. Investment proficiency includes understanding bank statements and complex investment concepts.

New Zealand remained at the top of the list, with 74 index points, and also in matters related to fundamental money management skills. China has come out as the most proficient in investment, Myanmar in financial planning.

Japan fell at the bottom of the chart with its overall financial literacy at 57 index points.

“There are divides across our markets that reflect the gap between the developed and the developing. Financial literacy is a concern where a large proportion of society are without the support and education that is taken for granted in the developed world,” Tan added.

A developing country, the Philippines was the sole market from the list to have low levels of financial literacy from the demographic of 30-year-olds who are married at the same time. Becoming financially savvy is more pronounced with marriage and increasing family obligations, such as household expenses, education and financial commitments.

Link to original site here

saving is a bitch
saving is a bitch

How about you? Do you find it easy to arrange your finances and set it in order?

For almost five months now, putting my finances in order has been my sole obsession. I don’t know what prompted my quest to scrimp, save and invest aside from the fear of dying and leaving nothing to my family in spite the crazy hours I spent working.

As embarrassing as this may sound, my financial IQ is nil and almost non-existent. I lack the discipline to save my money and look the other way when it comes to my wants and not needs. I am currently trying a lot of ways to save, invest and keep. I’ve read somewhere that 10% of our salary should go to our savings, 20% to our investments (different from the rotating money in the bank) and 70% should go to our day-to-day expense.

I wish I could tell you that everything is going according to plan and that all my savings are growing according to the same gaant chart that I prepared with gusto. However, the reality is that, like any other Filipino, my monthly expense sometimes outweight my monthly earnings. Instead of allotting money first for my investments (mutual and emergency fund) and savings (revolving fund) accounts, what happens is that I am forced to pay for my bills before I set money for my savings. According to the many investment and financial websites I have studied, what is correct is to pay yourself first before you pay others.

Here are some financial literacy tips from Investopedia

1. Responsible use of credit cards
If you have a credit card and you’re barely paying the minimum payment due per month, then there is something seriously wrong with your financial spending. Credit cards are convenient tools and provides you financial flexibility but they shouldn’t be taken in as substitute to cash. Stop using your credit cards to pay for your wants (yes, very easy to say when there’s no H&M, Forever 21 or GAP near your office). Credit cards should be used for emergency expenses only (thing is: a plane ticket qualifies as an emergency to me).

2. Pay yourself first
As mentioned earlier, make it a habit to pay yourself first before you start paying your bills and other obligations. Since this is the part of my financial journey where I struggle the most, I am planning to do something to improve how I do this. One plan is to NOT use my money, and not withdraw anything unless I have paid myself using the medium I discovered — 10% savings (revolving funds) and 20% (investment/emergency funds).

3. Have an emergency fund in hand
Shit happens — people get sick, appliances get broken, unemployment happens and insane discounted tickets to Japan gets announced (kidding on this one); it’s best to always have money in store to use for instances such as these. Since I was young, I was told that one must have at least three times the worth of her salary in her bank account. But apparently, amount should be equivalent to six times your salary in order to cover living expenses and even cases like hospitalization.

4. Stop keeping up with the neighbors
Just because your neighbor happened to buy a new car doesn’t mean you have to line up to the dealership also. Be contented with what you have. Your neighbors do not pay your bills, so their opinion doesn’t and shouldn’t count on how you live a financially-independent life.

5. Have a budget
…and stick with it.

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How our garage sale paid for our New Year’s Eve Feast

I don’t know about your family, but in our family, we mark the New Year by cleaning the house like crazy. Since our mother is a hoarding fiend that saves even the tiniest of papers, the house tends to be cluttered by various oddities like barely-used electronics, trinkets, barely-worn clothes that are two sizes too big, shoes and in my case, tons of toys, books and notebooks.

So, the Tuesday morning prior to the end of the year, just as we were gearing to clear out the trash from our respective rooms, the family and I had the brilliant idea to stage a garage sale. After all, we have been known to give away our things whenever we tire of it. So why not profit for it. Buoyed by the fact that we are curious where the big sale can lead us and desperate to let go of all our previous trash, we started laying our things in front of our house, marked and priced them and started calling the attention of our neighbors.

Up for grabs were heavily-discounted bags from Singapore, Bangkok and London; old china and brand-new shot glasses, bric-bracs and a lot of accumulated notebooks and notepads; barely worn clothes and shoes; a 24-inch barely used television set; my sister’s Blackberry (used for a month only); brand-new Skull Candy head phones; my old Japanese magazines (still no takers up till now) and four boxes of books.

While we really didn’t mind getting rid of the rest of the stuff, my sister and I had trouble and a lot of heartbreak letting go of the books. But, space have been scarce, we were done reading these books and wanted others to enjoy them. The fact that we will be earning from the sale is just a plus. We unloaded a lot of young adult novels, including six Gossip Girl books, the whole Twilight Series which was bought on a whim–to date, only one sold during the Garage Sale; Nicholas Sparks novels which sold like hotcakes, plus three cartons more worth of the stuff.

garage sale

At first, we really didn’t know what to do with the money, but when we hit a thousand bucks, we all decided that whatever the proceeds of the garage sale maybe, we will use it for our New Year’s Eve feast. Sort of, the old things we have paying for the celebration of the incoming year. By second day (which was New Year’s Eve) we already sold about five thousand pesos worth of stuff. Not bad, considering that these are the same things that we used to throw or just give away.

Happy with the progress, my dad, my sister and I went to grocery shopping by 5PM of January 31, happily clutching assorted bills earned from a day of unloading our unwanted stuff.

Our “house trash” was successfully transformed into this:

NYEve feast

The New Year’s Eve feast was something: prime Australian lean meat steak; green salad with two choice of dressings, fruit salad; a cake from Tous Le Jours; porkchop; a potato and egg salad as side for the steak; baked rigatoni smothered in melted cheese; plus a cheese spread composed of Quezon de Bola, blue cheese and cream cheese. All these without spending any of our personal money at all, funds sourced from the proceeds of the garage sale.

Honestly, this made me realize that we are prone to mindless buying of things which end up as trash after a year. We accumulate and we buy stuff without putting too much importance on their value. Our family knows nothing about practical and intelligent spending. We are prone to buying things we really don’t need and out of “just because”. The Garage Sale taught us to put premium value on our possessions. Learn what’s really important. Do not be afraid to weed out what’s unnecessary and out-dated. Case in point? Our book collection. As nerds, we worship the stack of books that has accumulated on our shelf, but forgot that there may come a point that we need to share them to others.

There is an old Tagalog/Filipino saying, “May pera sa basura” (There is money in trash) and the garage sale was a testament to that. My sister and I agreed that we will stage the garage sale bi-annually — during mid-year and before the end of the year, which will give our family opportunity to earn more. Our goal for the potential proceeds we have based on our remaining inventory is to earn enough to buy the house a new sofa set. Ours is really old and we really need a new set in the living room. Hopefully, with two remaining days prior to the start of the first work week in 2015, we’ll have enough to cover this expense.

The penniless has no pride

I have always believed that the poor have no right to get all proud and mighty. This can’t be more true with my current situation right now. I am so broke that I have spent the last two days holed up inside our room trying to think of various money-making schemes, scouting the net for possible freelance jobs and dreaming of the time when I will finally pay dirt and win the lottery.

image not property

I don’t know how I manage to lose money faster than I manage to earn them. I figured it must be the bills, the money owed to people, the daily cost of living and the occasional sense of what little luxury I can afford myself. It did not help that I am currently in the middle of a really bad fix and going through one of the roughest patches of my life. Salary day is still a few days away and there was still the usual worries of everyday expenses.

What can I say, grown up problems suck.

The funny thing is people think I am a trust-fund baby…that I have this unlimited bank account where I drew funds for my Japanese magazines, my travels, my fixation for cute shoes as well as my numerous books that I don’t get to read. I didn’t realize that I give off this vibe not until I was informed by a good friend that our colleagues have the impression that I am rich. The idea amused (yet never flattered me), how can this be–when I never owned anything that vaguely resembled a name brand, my clothes were mostly thrifted and would never cost more than 1,000 bucks a piece.My only indulgence is my hair coloring which happens every three months, or if my roots become annoying. My travels is made possible by saving up for eleven months, in order to spend the rest in a matter of week outside the country. I never owned anything of value, except my laptop.

I never spoke in an accent, nor the annoying colegiala, lilting way common to people who were manor born. I studied in a public state university where my semestral matriculation amounted to no more than PHP400, the usual cost you spend for a solo meal at Brothers Burgers. I had an exclusive, Catholic secondary education but four years were spent as a regular fixture on the promisory note list.

So when people at the office assumed that I was rich, and that they can borrow money off me, I am a bit confused and amused.

Being broke made me realize that you do not have business being proud when you have no money in your pocket. You swallow your pride and ask your mom to loan you money, promising that the debt gets paid by end of the week. You swallow whatever toughness you have in you, the painful words you get to hear and you are reduced into a stuttering idiot, extending her hand for whatever dole out that is available.

Last night before sleeping, I caught myself telling Him in my prayers, “I will never spend hard earned money on things that can get easily replaced.”

How to blow your bonus in just two days

Almost six months into the new company and I am finally reaping the financial rewards of my hard work.
I received enough, big compared to the usual amount I get, but small compared to the money received by my co-workers who have faithfully served the company for so many years.

The truth is, when I saw my bank account through BPI’s Online Banking I had to utter a quick prayer to God because I was not expecting to get that amount. I knew that I will be getting a good amount but not that much.

So with money in the bank, what did I do? Did I buy a new gadget? Did I had fun buying new clothes and all the satchel and brogues that my money can afford? Did I book for my latest trip? Did I stuffed myself silly until I can no longer move?

No.

Funny but I didn’t buy anything for myself except for a 500 peso pair of brogues and an I love Japan shirt from Bench. I also bought colognes and some personal effects.

What I did with my money are the following: bought paint to begin the renovation efforts for our living room, bought new stuff for the bedroom especially pillows to replace the pathetic bunch we used to have. I also bought my mom, dad and the spouse random stuffs for their personal use. Then, I gathered all the unpaid bills and paid them all like a freaking mad woman. In a day, I managed to update my and the hubby’s insurance, the house’s cable bill as well as the credit card bill.

But more importantly, I decided to open a passbook account. I withdraw-ed all my remaining money and transferred it to a passbook account which I plan to cultivate for as long as I am present at my current company.

picture not mine

I also allotted money for the Hubby’s tuition. My hubby, working two jobs and barely getting sleep just to provide money, plans to enroll in an AutoCad course which he hopes to utilize to further his career. Since he heard from the group he is freelancing with that an AutoCad certification will help him earn more with his freelancing job.

So basically, I didn’t spent anything for myself. All the money went to the people I love and to the value that I hold dear. I want to be more responsible when it comes to my finances. I wanted to be able to provide for medicine and hospitalization, or buy things I really NEED (not WANT) or purchase plane tickets on a whim because I have the money.

In a nutshell, that’s how I blew all the money away in just two days. I may not have all the material trappings in the world, but surprisingly — I fee more fulfilled this time.

Is greed evil?

Is greed a good thing?

As mentioned by one government official on the height of one of the corruption scandals during the government of former President Arroyo: “Moderate your greed…”

For me, there’s a distinct different between greed and hunger. One could be hungry for love, for success, for recognition, for life, for music, for achievements and still come out human after satiating this hunger. But, when one gets greedy–one forgets to be human. All he sees is the object he covets and nothing else.

I am so raring to see “Wall Street 2: Money Talks”. Maybe because I am fascinated with so much money and so much wealth that can be easily accessible to someone when he wants it. I personally know people who lost their humanity when they became rich. It’s like losing a part of your soul and not missing it at all.

I find it scary when one is governed with so much material things and bank notes. Only the resolute few wouldn’t be fazed with the glitter of gold or the flash of money. I myself go crazy sometimes just imagining what would I do with all that cash when I win the lottery or accidentally come across PHP1 Million! Of course, my mind was reeling from the thoughts of too many shoes and bags and clothes I’d have. And the countries I’d effing visit! Oh, my passport would be so busy!

But sometimes, I also get scared–just thinking of the person who should I get to be effing rich. I don’t think I’ll like her at all…