HOW TO BE PENNY WISE: Smart Money Tips (First of a Series)

INTRODUCTION

FIRST THINGS FIRST: THE BASIC PRINCIPLES

The Sad Truth

A study shows that 9 out of every 10 Filipinos have no savings, and 8 out of every 10 Overseas Filipino Workers (OFWs) end up broke.  What do these numbers tell us?  Filipinos rate poorly in the proper handling of financial resources.  Nothing can be more glaring than that.

The key to this social malady is education that will wean Filipinos from their old undesirable habits and develop new good ones.  Just imagine where our economy would be if all Filipinos managed their money wisely!  Money in banks and other investment instruments create a very conducive environment for businesses to thrive and fuel a more robust economy.  Not only will each and every Filipino family gain from it, but just think how you and I will be a contributing force to spur the country’s development and progress. Every small drop fills up the bucket.

I must admit that I thought I knew everything I needed to know about Personal Finance 101, until I worked for a non-profit organization whose advocacy is to promote financial literacy through the conduct of seminars. This is something that grew on me and later evolved as one of my Corporate Social Responsibility (CSR) platforms in my last job as Corporate Communications Unit Head of a bank. The principles I learned then are the same principles I will impart in this brief course as a matter of personal cause.

But the very first thing we need to learn in the area of financial literacy is to UN-LEARN the wrong notions we have about money.

Ownership vs. Stewardship

We do not own what we have in our possession.  Got that?  Yes, you read it right!   The funds deposited in our bank, the money in our wallet, and the material goods we have acquired through the years are  not ours.  The earth is the LORD’s, and everything in it. The world and all its people belong to him (Psalm 24:1, New Living Translation).   We are just stewards, or in layman’s terms, managers of the resources that God has simply entrusted to us.  After all, we brought nothing with us when we came into the world, and we can’t take anything with us when we leave it (1Timothy 6:7, New Living Translation). The earlier we embrace this truth, the easier it would be for us to come to terms with our role as mere managers.  Then our perspective, attitude and behavior toward money will change according to God’s design.

In the final analysis, all our financial decisions are spiritual decisions.  We have the Best Financial Adviser in the whole universe to consult for decisions involving financial matters.  Getting divine guidance about our earthly treasures will keep us from erring and falling into financial sinkholes.

The Value of Work

Since God owns everything, even our knowledge, skills, talents, and abilities that enable us to work in order to earn and acquire material goods are from Him.  “But remember the LORD your God, for it is he who gives you the ability to produce wealth, and so confirms his covenant, which he swore to your ancestors, as it is today.”- (Deuteronomy 8:18). It would, therefore, be arrogance to assume or claim that the success we may be enjoying now in our career or business is but the product of our own genius and labors.  We need to acknowledge that our qualifications and sheer hard work won’t get us anywhere without God’s permission.

What does the Bible, the life manual provided by our Maker and Owner of everything, teach about work?  For even when we were with you, we gave you this rule: “The one who is unwilling to work shall not eat.” (2Thessalonians 3:10, New International Version).  As clear as daylight, it leaves no room for second guessing.  If you have nothing to eat, then you’re not doing your part.  It’s as plain and simple as that.  God gave us the ability to work.  There’s no excuse not to work; no reason why we can’t make money.  Work hard. Earn a decent living.

Your work earns your keep – it puts food on your table, covers your back and provides a roof over your head.  Love your work and it will love you back.  If you’re unhappy with your job, think of the many that are unemployed and without any means.  This is not to say that you cannot look for greener pastures.  What I’m saying is, never take your work for granted.  Do not bite the hands that feed you.  Instead, do your best while you’re there.  Be grateful that you are gainfully employed or are engaged in an income-generating activity.

Parents, start your children early in inculcating the right values about work and money.  Training and disciplining them in these matters while young will prevent children from developing an entitlement attitude where they become demanding because they think the world owes them. Don’t we just find it disturbing when we see children throwing tantrums inside the mall when parents can’t or won’t buy them what they want?  Children need to be made to understand that money doesn’t grow on trees.  Even the money tree (scientific name: Pachira aquatica) doesn’t bear paper bills and coins, does it? Learning to say no to their caprices, teaching them to wait till there’s enough money for a valid object of desire, and being firm about it will help develop their EQ (Emotional Quotient).  They will learn to handle disappointments and grow in the virtue of patience.  Likewise, they will realize the value of work and not grow old idle and be like a leech depending on others for financial and material support.

The carrot principle, a reward system that can be applied by parents for a child’s good deed or good behavior (good grades in school, doing a house chore, waiting for the right time for daddy or mommy to buy a toy, etc.) will, first of all, plant the seeds for proper motivation. More importantly, it will impart important life lessons for survival and successful living.  Wages are paid in exchange for work done.  But promotions, bonuses and merit increases are for those who do more and fare better at work than the average guy.

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