Monday, April 30, 2012

How financially educated are you?

“The best way to help the poor is not to become one of them” -  Laing Hancock

Two weeks ago, the news that 80% of Filipinos don’t have a savings account caught my attention. The reason is that majority of Filipinos can’t afford the 5,000 peso maintaining balance of set by banks. Personally, if one would really want to open a savings account they’ll just need to find banks like BPI that offers as low as 1,000 pesos maintaining balance to open a savings account.

It struck me the reality that the majority of us Filipino have a bad habit of spending and have poor financial education. I have friends from different walks of life, from messengers to upper management that told me of their challenges regarding money.

I remember my parents talking about what happened to some of their friends and co-workers after retirement. Most of them become financially challenged because they lacked financial education. After getting a huge retirement pay, most of them spend it like crazy. They spend it to what they believe are investments like the houses they bought, businesses in faraway provinces, go to their dream vacation they’ve been dreaming of. Some lose it in vices like alcohol, bad women and gambling.

And then reality bites, expenses doesn’t stop whether you have money or not. The bills keep on coming and without enough money flowing in they resorted on selling properties, some are buried in huge debt and these people who spend their lifetime working will be forced to work again.

At an early age, I too have experienced this. I realized that I’ve been working for some time now but my savings aren’t that great.  Is there really a way to get out of the rat race? If there is really a money game, I’m losing. For such great effort exerted in work every day, I’m not earning that much.
So I came to question the system because for almost all of us, the system didn’t work at all. The more we earn, the bigger the expenses. Our salaries are even reduced even before we get it due to taxes and other deductions. Of course, we shouldn't just blame it all on the system because the true culprit is our spending habits. How we spend it all, like there is no tomorrow.

Before we were born, this kind of system is already in place. Many call it the rat race, some experts call it the money game. The game is simple; to be financially independent the money going in should be higher than the money going out. The money going in is called assets, the money going out is called liabilities. We just need to acquire real assets that work for us so that we don’t need to worry about liabilities. There are many ways to acquire real assets, see my previous post “Investments that work for you” to have an idea of what I’m talking about.

I listed some of the reasons why we need financial intelligence. Feel free to comment for suggestions that I can add up to the list:

1. Money is confidence. The more money you have, the more confident you become.
2. Financial Intelligence is freedom. The more you know how money works the less you worry about it. The less you worry about money, the healthier you become.
3. Financially independent people send their kids to the best schools.
4. Nothing beats the feeling of helping others. To be financially free, gives you the power to help more people. You cannot give what you didn’t have.
5.  5. The power to choose. Financially independent people have more choices regarding how to spend their time and work they want to have.

I'll be posting more free tips and tricks on how to manage your hard earned money and make it work for you. Feel free to join my tribe and subscribe to my newsletter. 


  1. ive been trying to save, but there are food all over the place calling my name :3 it really requires resistance to be able to >.<

  2. if i may just add, BPI has a new account with zero maintaining balance. i got one. there is a 5-peso deduction for every withdrawal, though. but because of this, i made this BPI account as my savings account. i only withdraw when it's very necessary. =)

  3. @april Hi april it's a struggle for me too, specially if there's something new and tasty a food stall has to offer. :)

    @swexie Hi swexie, I also saw that at the malls. BPI is offering this kind of savings account but there's always a catch. If I remember it right, my friend apply for this kind of savings account six years ago. It's also has no maintaining balance but if you lose the atm card you lose your money along with it. It acts like a cash wallet. I prefer and recommend the security bank cash card though. It also has maintaining balance but there's no interest per annum. You can check its details here For me that's fine because who wants the 0.25% to 1% interest per annum from regular savings account anyway. Thanks for visiting and commenting :)

  4. Just a tip: When you get a job, try to save money as much as you can, when you save enough, try to get a second source of income like vending, freelancing, etc. without leaving your primary source of income. When you save more, try to expand, get a third source of income without leaving your first and second source. You could invest, like establishing your own restaurant or business partnership.

  5. @Otakore Yes, its very true. Although the economy is slowly improving it's still not practical to rely on a single source of income. That's why education on financial education is very important nowadays. Thanks for visiting :)