“Wala naman akong budget, bakit ako magpaplano?” “But I don’t have money to manage, why should I learn about financial planning?” This is the common comment of many Filipinos who are invited to learn about financial planning. No wonder a lot are in financial difficulties or are poor. This wrong mindset about financial issues has created a culture of spending beyond our means (waldas), borrowing continuously (great debt), and having unstable financial future (poverty).
Why do we need to make the right financial plans? So that we could make better use of the financial resources that God gave us. In fact, God is clearly concerned about money matters. Money and references to money are mentioned more than 800 times in the Bible. It’s given to us as a tool. It is neither evil nor good. It is greed and the love for money which is evil. So how should we make money serve us instead of us serving money? By not buying the things that we do not need, by saving a part of our salary each payday so that we have something to live on when we are no longer working or to use when emergencies happen, by not burdening our children when we become too old to work.
Stewardship is one of our responsibilities as children of God. This includes managing our money. We should plan not only what to spend but most importantly, what to save. Determine your priorities. Plan with the family. Remember that it should be giving back to God first, then saving or paying off your debts, and then spending for your needs.
For those who are in debt, do not lose hope. God can help you get out of this if you will make the right choices and decisions regarding your finances.
Make the right choices now. Start making proper financial plans.
- Set your priorities: God, spouse, children and parents, job, etc.
- Have a financial plan as a family on saving and spending your income. It’s all about financial management.
- Keep a record of the money that comes in and goes out. Have discipline and restraint in spending.
- Maintain just one credit card. Use it only if you have the actual funds to pay the bill in full each month.
- Pay the whole credit amount due. If you have an existing credit loan, make sure to pay a part of the principal amount until you pay off the whole loan.
- Avoid shopping malls during sales season (unless you have a planned purchase) so that you will not be tempted to buy unnecessary things.
- Regarding credit cards and loans, read the fine print in agreements, especially about penalties and hidden charges.
- Keep receipts to prove that you have already paid your debts.
- Only borrow if it is for business and you can pay it with your profits.
- Parents have the responsibility to save for themselves when they get old.
- Colayco Foundation for Education: www.colaycofoundation1.com
- Registered Financial Planning Institute : www.rfp-philippines.com
- Life and Personal Financie by Randel Tiongson : www.randeltiongson.com
- Pinoy Money Talk : www.pinoymoneytalk.com
- Go Negosyo : www.gonegosyo.net
- Investment Company Association of the Philippiens : www.icap.com.ph
- Credit card companies usually charge a 3.5% interest per month. This is equivalent to 42% per year whereas the standard loan interest rates are only between 12-17% per year.
- The magnitude of poor families increased by about 531 thousand families from 4.147 million to 4.677 million families between 2000 and 2006.
- The family size of families in the bottom 30% is on the average larger by two members than that of families in the top 10% ( 5.7 versus 3.6)
- Between 2006 and 2008, minimum wage in NCR grew annually by 4.99 % and 4.47 % for agriculture and nonagriculture workers, respectively. From 2008 to July 2009, the minimum wage in NCR did not grow at all.
- Food takes the biggest share of our budget. On average, however, Filipino families are spending less and less on food, which eats about 43-44% of the budget.