YOUR MONEY AND YOUR LIFE

BANKING & FINANCE

YOUR MONEY AND YOUR LIFE

Reggie Rullan-Borromeo, Manila, Philippines

Published in the Daily Tribune Life
June 9, 2012

Getting your money life in order at any age is the result of a determination to be financially stable, or so we think. Who is not up for having savings while enjoying life? Who is not up for an emergency stash that can take the financial burden out of the emergency situation? Finding the balance between saving and still living an enjoyable life has been elusive to many.

One of the causes of the imbalance is the sense of what makes life enjoyable and to what extent is one willing to finance that enjoyment. For those who are hardly making ends meet, the enjoyment of life is not even in the equation as they are hard put to even pay the basic bills they are beset with.
Savings in a situation like that may seem a luxury one cannot afford.

Financial gurus, left and right, however, have remained in agreement that the act of saving or building capital is the first step to financial stability. Developing the habit of saving money on a monthly basis, even in cases where there seems to be no room for it is the key to build capital. The most common argument for it is the multiplication of a miniscule amount that one can spare, even an amount as low as P10 per day. Over a period of time, the multiplier effect creates savings and over a longer period of time the savings can be treated as capital.

Cutting back on little luxuries that define our lifestyle may equal savings over a period of time to create savings, an emergency fund and even build capital for a dream long sought. How one can actually do this in a defined, very simple and practical way that a non-finance person can understand has been a challenge to many.

Recently, the Bank of the Philippine Islands (BPI), in line with its commitment to help the nation build a citizens of savers and yes, even capitalists, invited finance guru, Suze Orman, to host several events to address its individual and corporate clients finance questions on how to achieve financial stability.

In line with BPI’s financial wellness advocacy, it regularly makes available financial advice to its individual and corporate clients in its campaign to heighten financial literacy.

In one of the forums, which was held at the BPI headquarters in Ayala Avenue corner Paseo de Roxas, Makati City, local celebrity Maricel Laxa-Pangilinan asked Orman how to teach her children to use their allowance wisely. Orman immediately asked Pangilinan if her children knew why they had an allowance in the first place and if they did anything to earn it. Orman said that even the simple act of giving an allowance to a child, without the child understanding the reason he or she is receiving money, what it is for and how to value it, may spell a finance disaster to a child’s future.

The sense of entitlement to money, the good life, new gadgets, new clothes, new cars, etc. has resulted in people acquiring things they cannot afford. Opening a savings account for a child without making the purpose clear to them opens up a deluge of problems. If it is clear that the savings is for a college fund then the child knows that it is not to be spent.

Giving a child access to funds then denying them the freedom to make choices on how to spend it confuses them and may make savings nonsensical to them. Thus, making clear what money is for and allowing children to make decisions on money allows them to make their mistakes now while you can still guide them.

Giving them clear choices, even simple ones help them to grasp the concept of money and savings.

An example Orman shared on how to do this is to take a stash of cash and show it to a child. The child is then asked to line up their favorite toys that they purchased and have them state the value they paid for it. Orman then lines up the cash alongside the toys according to their purchase value. After she asks the child would you rather have the cash or the toy? Almost always, the child wants the cash.

Orman then says, but the cash is mine, I saved it and the toy is yours, you bought it. Orman then takes the cash back to show the child that the toy they may have rashly bought a few weeks or months ago is not as precious now when stacked up against hard cash.

In a series of books, The Action Plan; Women and Money; The Money Book for the Young, Fabulous and Broke; The 9 Steps to Financial Freedom; Suze Orman’s Financial Guidebook; The Road to Wealth: Suze Orman’s Complete Guide to Your Money;

The Laws of Money, The Lessons of Life; and The Courage to be Rich; You’ve Earned It, Don’t Lose It!, Orman gives a simple to follow plan on how to take hold of one’s money, keep it and make more of it and while spending wisely along the way.

With the proliferation of confusing financial advice and terms, a lay person who wants to take the first steps to financial wellness is most often hard put until they get to hear Orman’s advice. Orman has been cited as “force in the world of personal finance” and a “one-woman financial advice powerhouse” by USA Today.

Aside from garnering several Gracie awards and being a two-time Emmy Awardee as a television host for the Suze Orman Show, she also contributed to the Oprah magazine and the Costco Connection magazine.

In 2007, Business Week chose Orman as the only woman in the top 10 list of the most motivational speakers in the world. In 2008 she received the National Equality Award from the Human Rights Campaign; the Amelia Earheart Award for empowering women and the Time 100 citation as the World’s Most Influential People. In 2009, she was the recipient of the Visionary Award from the Council for economic education and was 18th on the Forbes list for the most influential women in media. In 2010, Forbes honored Orman as one of the World’s 100 Most Powerful Women.

Alongside all these distinctions, she earned honorary degrees as Doctor of Humane Letters from the Illinois University and as Doctor of Commercial Science from Bentley University. Last year, she was alongside Dr. Phil and Dr. Oz on Oprah Winfrey Network in a feature entitled Ask Oprah’s All Stars.

Orman has recently launched a six-part series on “America’s Money Class with Suze Orman.”

For more information on Suze Orman log on to www.suzeorman.com

For more on financial wellness programs log on to www.bpiexpressonline.com

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Writers

Dinah Sabal-Ventura
dinah_ventura@write-experts.com

Geraldine “Reggie” Rullan-Borromeo
reggie_rullan@write-experts.com

Malu Mora-Rullan
malu_rullan@write-experts.com

COFFEE TALK: THE WAYS TO WEALTH

BANKING AND FINANCE

COFFEE TALK: THE WAYS TO WEALTH

Reggie Rullan-Borromeo, Manila, Philippines

NOVEMBER 7, 2014

Bad financial habits are hard to break.

Harder still to keep are financial resolutions that are aimed at unmaking the bad financial habits accumulated over the years. What is one then to do when stuck in the stark reality of a financial mess?

If one were to ask a range of financial advisers or consult financial books, the single thing they will all agree on is that savings is not only a way to grow money; savings is also a way to become wealthy.

In a recent brunch series of the Coffee Bean and Tea Leaf, Randell Tiongson, director of Registered Financial Planners of the Philippines, shared how he turned around his personal financial life.

The most striking thing he shared was that he used to be a liar and that worst of all, he lied to himself about his financial standing. Whilst he had long reformed his financial ways, he said he was still paying for his financial mistakes.

The good news is that it is never too late to rise from a financial mire. One can work one’s way out of it and get on the road towards financial recovery, just like Randell did.

As he talked about how consumerism took a crack at his financial stability, I was thinking, Randell, a finance whiz, is just like any of us. He is just as prone to the lures of advertising as the next guy. He tried to keep up with the Joneses (the Zobels; the Gokongweis; the Tans and the Sys), just like many have.

Yet what he was getting at was how our purchasing habits have formed a lifestyle that has set us on the path of fewer savings or worse, no savings.

This set me to thinking of how many people actually live within their means and how much has the power of credit lured many to live beyond said means. Living beyond one’s means not only results in a credit rating disaster. It can lead to a lifetime of debt if left unchecked. Compounded interest leads to burgeoning debt as one struggles to pay only the minimum of a credit card statement.

“We know that here in the Philippines, people put too much effort on lifestyle,” shares Randell. “Whenever there are new items or sales in malls, people get out of control. We spend too much money on luxuries, and yet our problem remains to be poverty — so much poverty, so much instability. The biggest problem is our behavior.”

Randell goes on to encourage Coffee Bean and Tea Leaf aficionados that one’s lifestyle dictates whether or not savings is possible. If lifestyle changes are made to make room for savings, then the light at the end of the tunnel will soon come in sight. Developing the habit of saving is a lifetime lifestyle habit that one must make to achieve financial stability. To begin, one must stand in the truth of what one can and cannot afford and begin to shave of expenses that may be turned into savings instead.

“If you ask a lot of people right now, their level of savings is not that ideal,” shares Tiongson. “There’s a study that in the Philippines, we only save about 18 to 20 percent of our income. When you compare that figure to other countries such as China, Singapore, Malaysia, Thailand, their savings are at about 30 percent. Knowing that ours does not even reach 20 percent makes us realize that we are going to have a problem in the future. There’s a magic number for saving and spending-if you save about 30 percent of your income, you’re going to be financially stable. In fact, you could be rich,”
he adds.

When Randell was asked how one may teach children to save, as well as not to be consumer crazed, his answer to both questions was one and the same: “Live it!” he admonished. If one is teach a child anything, the first step is to set the example. The buying and saving habits of parents can have more impact than constant lectures.

This brunch series: New Financial Habits for a Brighter Future is part of Coffee Bean and Tea Leaf’s Great Exchange Program, highlighting the new Single Serve Beverage System. It is a personal barista coffee and tea maker that can make up to 70 varieties of Coffee Bean and Tea Leaf products right in the office or at home.

For more information log on to www.coffeebean.com.ph.

Send us a Message

Writers

Dinah Sabal-Ventura
dinah_ventura@write-experts.com

Geraldine “Reggie” Rullan-Borromeo
reggie_rullan@write-experts.com

Malu Mora-Rullan
malu_rullan@write-experts.com