N.B. – Below is a short article written by my wife Joy regarding a seminar she attended last June 3.
Enjoying our personal finances
By Judith L. Balean-Arao
On our way home after a seminar on financing in Ortigas, some of us participants weathered the sleepy mood of a gloomy June 3, 2009.
That’s not to say that we were sleepy during the entire session which was actually lively and lovely. The speakers created an atmosphere of a stand-up comedy show without using vulgar and foul words. They called their method “edutainment,” a combination of education and entertainment. We sang and danced in between lectures. They saw to it that we have fun learning a very serious subject, our personal finances.
The training was a good learning experience worth sharing to everyone, especially those with financial problems. As one of the speakers said, we should neither live beyond nor within our means. We should live with enough savings, right investments and wise spending to live a longer, healthier and wealthier life.
To improve our personal financial condition, we must know the sources of our funds and how to increase them. If promotion is not applicable, why not try investing in stocks or bonds or establish a small business instead? But do not put all of your funds in one project!
We should know where we spend our money. When buying an item, we should also be guided by our wants, budget, priorities and divine intervention. A sound advice to married couples is for them to both agree on any planned purchase or loan.
The personal financial condition we wanted to achieve should be translated into a specific amount within a particular timeframe, whether in form of a loan payment, acquisition of property or increase of funds. This can be done by preparing a budget, taking into account the value of each centavo and our priorities. Expenses should only be within the budget and only be a portion of our funds should be used so that it will not be fully exhausted.
The speakers shared with us their “70-20-10 principle” in budgeting our gross income. Ten percent of it should be allocated to our tithe; 20%, savings; and 70%, our family’s basic needs.
There were also tips in reducing monthly expenses. This includes maximizing scholarship programs and parents-children quality time for studies; having proper diet (well-planned healthy and fresh food); doing regular exercise; subscribing only to services we really need; using energy-saving equipment/devices; training children the value of budgeting, savings and wise spending; learning when to lend money to others; using public transportation; making cash out of our trash; doing away with gambling and other vices; using wisely our credit cards; and saving any unexpected income.
The budget we projected to improve our finances shall be our daily commitment to ourselves. We should religiously stick to our budget to achieve our goals.
What proves to be also helpful are tips in getting out of debt and staying out of it. The first step is to record all borrowed funds. Next is to write down projected income and existing expenses. Then, compute the amount saved using the appropriate (preferably reduced) expenditures. Deducting the projected income from the borrowed funds and the existing expenses, we can get our surplus amount. This surplus amount will be used in paying off debts. Priority in paying loans shall be those that incur interests and penalties. We should arrange with lenders for restructuring and condonation or waiver on penalties and interests if possible.
The training did not encourage the participants to be hard on themselves because it promoted a system of rewards. The latter, however, shall be given only if we have more than enough money for our retirement.
There are other interesting topics discussed like the kind of money manager we are, budgeting principles, reduction of monthly expenses, handling credit cards, increasing income and investments.
I wished more colleagues at Land Bank of the Philippines (LBP) had taken the opportunity to attend the workshop in order to “Unleash the Highest Potential of Your Money,” which happens to be the title of the seminar.