Why do People Complicate Things?

Make an average seven year old child solve a math problem and he can do it in less than 3 minutes. Make a man in his 30’s solve a debt problem and he will complicate things.

Is it not that debt problems are math problems? Ask a child how much does it take to pay an ice cream and he’ll tell you its five pesos. Ask a man how much does it take him to pay a pair of shoes and he’ll grab his wallet, take out the plastic card and says “This much.” Ask a child if in case he doesn’t have money, will he be able to buy an ice cream and I’m sure he will say “No.” But ask a grown up and he’ll say “Yes.”

Lesson:

Do not spend more than what you have. Apply some rules I’ve been applying for the past years.

1. Never spend for things if you don’t have the means.

2. Plan for every purchase.

3. Wait for 30 days before finally deciding for a big item.

4. Don’t mind the status quo.

5. Learn how to be happy with simple things. Happiness comes from personal relationships, not from material things.

When Family Members and Relatives Mess Around with Money

What you are going to read is based from a true to life story. Names have been changed to protect the identity of the people involved.

Andrea is a successful accountant has a lot of ambition in life. She supports he family quiet well and saves enough for her future. Being an accountant opens her mind to the wonders of money-management and is determined to put the knowledge in practice not only in her professional life but also in her personal financial life. She is a God-fearing person and loves her family so much.

One time her aunt came to their house and talked to her mom. She asked her mom if she could borrow a certain amount to pay off a debt. Her mom talked to her about the matter and pleads. Being a loving daughter, Andrea agreed to shoulder the debt of her mom’s sister. She did not mind how much it was because she was able to set aside some extra cash. She just wants to please her mom and unload the burden from her.

The borrowing did not end there. A lot of times relatives come to her mom. And she already felt the burden of having too much debt to settle. Their relatives did not pay back her money. She is having a lot of trouble meeting her financial goals because of those unexpected relative debts. She started asking herself about the matter and decides to seek professional help.

How many of us are like Andrea? How many of us are blinded by emotion when dealing with money matters? How many of us seek financial help when needed?

Andrea’s story is common to Filipino families because we have these great family ties. We tend to bond with our family more than our counterparts in the United States or in any other countries. As much as possible we don’t want any of our family members in trouble. We are very close to each other and help one another the best way we could.

In Andrea’s case, “helping the best way we could” doesn’t mean paying off other person’s debt. What Andrea did was baby sit her relatives. They now know that anything happens Andrea will never let them down because she loves her mom so much and she doesn’t want to disappoint her. The end result, she found her self not meeting her needs and goals because she is taking care of other people’s dilemmas.

Here are some suggestions so that you can avoid similar situation as Andrea.

1. Don’t use your emotion when dealing with money matters. People who are blinded by emotion usually make wrong financial decisions. Always think logically, not emotionally.

2. Make the family and relatives understand your goals in life so that they can help you achieve it. Discuss to them why you can’t give them what they want. Instead, give only what you can afford to lose. Family/relatives who borrow money seldom pay back what they owe. Don’t mix relatives and money. They simply don’t go together.

3. Helping out family members is a good practice but making them get used to it is not healthy at all. Remember that people should be responsible of themselves.

4. Teach the family and relatives good money habits. Discuss to them that the only thing that can solve their recurring problem is through savings.

5. Focus on your goal. Nobody will help you achieve your goal but yourself. Always focus on them and don’t let anything hinder you.

~Till then.

The Script of Life

Got this from International Marketing Group Materials

If we track the life of average educated people, the financial script often goes like this:

The child goes to school, graduates, finds a job and soon has some money to spend. The young adult now can afford to rent an apartment, buy a TV set, new clothes, some furniture and of course a car. And now the bills begin to come.

One day, the adult meets someone special, sparks fly, they fall in love and get married. For a while life is blissful because two can live cheaply as one. They now have two incomes, only one rent to pay, and they can afford to set a few peso aside to buy the dream of all young couples, their own home.

They find their dream home, pull the money from savings and use it for a down payment on the house, and they have a housing loan. Because they have a new house, they need new furnishings. So they find a furniture store that advertises those magic words “No money down, easy installment payments.”

Life is wonderful and they throw a party and have all their friends over to see their new house, new car, new furniture and new appliances. They are now deeply in debt for the rest of their lives. Then the first child arrives.

The average, well educated, hard working couple after dropping the child off at nursery school, must now put their nose to the grindstone and go to work. They become trapped by the need for job security simply because, on average, they are less than three months away from financial bankruptcy.

From these people you often hear, “I can’t afford to quit. I have bills to pay.” Or a modification of a song from Snow White and the Seven Dwarfs, “I owe, I owe, so off to work I go.”

~Till then

Life is a Choice

My friend told me that life is a series of choices. You live your life according to the choices you make. You will always find yourself in crossroads. One road may lead you to success. Others may lead you to more challenges. If you choose a path make every experience count. Make every little detail live in your memory. Because you can never go back. You can only say, “If only.”

I am an abnormal 24 year-older once. While every 24 year old ladies shop, I study about finances. While they party, I stay at home. While they buy things, I save. These are some of the choices I made. Choices that for me are great. Because they made me realize that life is not a matter of what you have. Instead it is a matter of what you give.

~Till then.