9 Signs That You’re Financially Smart

Financial literacy is obvious.

Kung may alam ka sa paghawak ng pera at alam mo kung paano palaguin ‘yung perang ‘yun, makikita ‘yun sa buhay mo. Maybe not in the material things you have but in the choices you make.

On the other hand, ‘yung pagiging financially illiterate, obvious din ‘yun. Makikita mo kanila na pabaya sila sa pera nila, walang direksyon ‘yung ginagawa nila financially, at sumusunod lang sila sa uso.

This is why if you want to be the first millionaire in your family, you need to know these “basic” things. Kung hindi mo alam ‘to, mahihirapan kang abutin yung mga financial goals mo.

Before that, ano ba muna yung financial literacy? Ito yung meron kang sapat na knowledge at skills para makagawa ng tamang desisyon tungkol sa pera mo.

Sometime ago, may na-receive akong comment sa TikTok saying, “You CANNOT financial literacy your way out of perpetual poverty.”

I disagree. Una sa lahat, mali ‘yung premise niya. That’s like saying, you can’t educate yourself out of ignorance. That’s LITERALLY what education is for. At ‘yan din, literally, ‘yung goal ng financial literacy—‘yung tulungan kang umahon sa kahirapan.

Second, if that were true, there would be zero people who grew up in a poor environment, with their poor family, and deprived of opportunities who would turn out rich. But as you and I both know, maraming taong ganyan. I know of, within my small network, of at least a few dozen people.

Yes, poverty is a sickness that needs to be cured. At sa Pilipinas, totoong systemic problem ‘to. But financial literacy can be a mighty cure that could lift people’s lives out of poverty.

All that starts with a life-changing decision and knowing these 9 signs.

Which would you rather be, Johnny or Peter?

Johnny: Nasa mid-to-late 20s na pero naka-asa pa rin sa parents para sa financial support. Every time na nauubusan siya ng pera, humihingi lang siya mula sa parents niya.

Wala siyang sariling kakayahan na gumawa ng sarili niyang pera.

Peter: Nasa mid-to-late 20s na rin pero merong sariling income. In fact, hindi lang trabaho ‘yung source niya ng kita niya—marami pang iba.

Hindi sobrang laki ng kinikita niya pero nakakapag-ipon siya at nakakapag-bigay ng suporta sa mga taong nasa paligid niya (within reason).

Sinong mas pipiliin mo?

Sadly, marami akong kilalang tao na katulad ni Johnny—mga taong walang sariling paa. Nakaasa sa mga kapamilya nila para buhayin sila. Ang mahirap pa, sila pa ‘yung galit kapag hindi mo naabutan ng pera. So, “didiskarte” sila para magkaroon—mangungupit, magagalit, o magpapaawa.

One of the biggest tell-tale signs of a financially literate person is their ability to make money. At syempre, nagagawa nya yun through legal and ethical means.

Hindi nila kailangang umasa sa ibang tao para buhayin sila kasi kaya nilang buhayin ang sarili nila. In short, they are responsible for themselves.

Now, there are multiple different ways to make money. Having a job is just one of them. Ito pa ‘yung iba:

• You start your own business

• You buy and sell stuff

• You sell your own services

• Kumikita ka sa pagpapa-renta ng mga bagay-bagay (e.g. camera, microphone, sasakyan, etc.)

• May assets ka na gumagawa ng pera para sayo

Ito yung una at isa sa pinaka-importante sa lahat kasi hindi mo magagawa yung iba pang mga bagay unless marunong kang gumawa ng sarili mong pera. So, let me ask you question: kung bukas, mawalan ka ng trabaho, makakagawa ka pa ba ng sarili mong pera?

If not, then it’s time for you to learn how. Kapag kasi marunong kang gumawa ng sarili mong pera, you become more financially confident. Hindi ka basta-basta nashe-shake ng mga pangyayari sa buhay mo. At hindi ka nabubuhay sa takot na baka isang araw, wala ka nang source of income.

I remember no’ng nasa early 20s ako, I was struggling to make money because the only way I knew how was to get a job. I grew up with the knowledge that my path after college was to get a good job at a good company with amazing benefits.

Now, walang masama sa pagkakaroon ng trabaho. Unlike other “gurus” and “motivational speakers” out there, I know how important having a job is. In fact, necessary ‘yan lalo kung gusto mo ng experience at kumita ng pera agad.

Hindi ko alam kung ako lang ‘to pero I was always afraid of getting fired or laid off or becoming redundant from my job. Hindi naman ako slacker sa trabaho. In fact, I always get promoted faster than anyone in the company. 

But the thing is, lagi akong takot na baka finally, “mahuli” ako na hindi pala ako magaling. Tapos baka matanggal ako at kailangan ko na namang maghanap ng bagong trabaho. Ang problema kasi, hindi kasi ako magaling sumagot sa mga interviews. So, nahihirapan akong ibenta ‘yung sarili ko and as a result, I have a hard time finding a job.

But everything changed when I started learning how to create value that people would happily pay for. Natuto ako ng mga skills kung paano ako makakahanap ng mga prospects at ma-close sila during our meeting. Though hindi pa ako sobrang galing dito, I believe it’s an invaluable skill—something that most people should learn how to do.

Now the question is…

Whether you have a full-time job right now or you don’t, learning how to make money will take your finances to the next level. At ito ‘yung ilan sa mga steps na pwede mong gawin para matutunan mo ‘tong skill na ‘to.

Step 1: Find a value you can create 

Meron ka bang skills o products na kayang gawin na useful para sa ibang tao? For example, nagta-trabaho ka bilang isang accountant. Usually, ito ‘yung mga skills na pwedeng makapag-bigay ng value sa ibang tao:

• Bookkeeping

• Preparing financial statements

• Tax consulting

• Spreadsheet

• Financial data analytics

You can offer any one of those skills and get paid by other people (or businesses) para tulungan silang ma-solve ‘yung problema nila. That’s what value is: helping people solve their problems or achieve their goals.

On the other hand, kung wala kang masyadong “technical skills”, okay lang ‘yan. Pwede ka rin namang mag-offer o maghanap ng products na useful para sa ibang tao. 

Halimbawa, suklay. Madalas, ‘yung mga binebentang suklay, nagbubuhol ‘yung buhok ng mga gumagamit. Kapag nakahanap ka ng suklay na makaka-solve ng problema na ‘yun, that’s valuable to people.

Once you find value…

Step 2: Offer that value to people who are willing and able to pay for it

Ibig sabihin, hanapin mo ‘yung mga taong magbe-benefit sa kaya mong gawin o sa product na binebenta mo. Isipin mo saan mo sila makikita.

Let’s go back to the accountant example. Kung nag-oofer ka ng bookkeeping services, sinu-sino ‘yung mga pwedeng mag-benefit do’n? Pwedeng small businesses, freelancers, small time eCommerce businesses, etc. Depende kung sinong mapili mo, hanapin mo kung saan mo sila pwedeng makita.

After that…

Step 3: Learn marketing

Marketing is just a fancy term for letting people know of the value you offer. Walang over-complication. Kailangan mo lang i-communicate kung ano ‘yung meron ka, paano nito maso-solve ‘yung problema nila, at ano ‘yung magiging itsura ng buhay nila kapag ginamit nila ‘yung product mo.

Do that enough times and you’ll build the skill to market your products or services. Syempre, marami pang mga micro-skills ‘yung meron sa marketing. But in bare bones simplicity, ‘yan lang ‘yun.

“Being good in business is the most fascinating kind of art. Making money is art and working is art and good business is the best art.” — Andy Warhol, One of the Most Important Artist of the 20th Century

Do you ever feel like trabaho ka ng trabaho pero wala kang naiipon? Baka sign ‘yan na gumagastos ka ng sobra-sobra sa nagagawa mong pera.

I know the feeling. Sobrang pagod na pagod ka na sa trabaho mo pero ‘yung kinikita mo parang laging kulang. ‘Yung tipong paubos na ‘yung pera mo, wala pang sweldo. Ika nga, Petsa de Peligro.

And honestly, dalawa lang ‘yung pwede mong gawin d’yan. You can:

• Make more money or

• Spend less than you earn

We discussed making more money sa #1. Now, let’s talk about the second one.

Spending less than you earn is not about depriving yourself. Ito ‘yung common misconception about it eh. Kung nakakaramdam ka ng parang dine-deprive mo ‘yung sarili mo, you’re doing it wrong.

Instead of depriving yourself, ang key dito ay ‘yung pagiging intentional sa kung paano ka gumastos. In short, you need to practice what I call Conscious Spending.

Spending less than you earn means hindi mo sinasagad yung gastos mo kada buwan o cut-off. Talagang may sobra pa. Mahalaga kasi na may sobra o difference yung kinikita natin sa gastos natin kasi ito yung ima-manage natin. Think about it, how can you manage something that doesn’t exist?

Kung sagad na sagad yung kita natin sa gastos natin, isa lang ibig sabihin nyan, kailangan natin bumalik sa #1. Kailangan gumawa tayo ng mas maraming pera.

Now, hindi lang ‘to basta sa kinikita ah? I know of people who are making ₱300k, ₱500k, even ₱600k per month pero kulang na kulang pa rin. Need proof? Here are some.

It’s not because they’re not making enough. It’s because they don’t have the skills to manage what they make.

It’s because of “Lifestyle Inflation.”

Alam natin na sobrang taas ng mga bilihin sa Pilipinas ngayon. At lahat tayo, apektado d’yan. But if you’re making enough money to live comfortably pero sagad na sagad pa rin ‘yung income mo, lifestyle inflation ‘yan.

Ito ‘yung habang tumataas ‘yung income mo, tumataas din ‘yung gastos mo by choice. You’re living larger and as a result, you’re paying more money. Halimbawa, bibili ka ng bagong sasakyan, latest phones, bagong damit, at marami pang iba.

Sa totoo lang, wala namang masama sa lifestyle inflation. It’s a mark that your life is improving (at least financially). Pero kung sobra-sobra na ‘yung taas ng lifestyle mo to the point na hindi mo na ma-control, mahirap ‘yun. Do’n magsisimula ‘yung sakit sa ulo mo financially.

Here’s the good news: lifestyle inflation is within your control. Meaning, there are things you can do about it. At isa na do’n ‘yung Conscious Spending.

In my 6-Figure Savings Challenge, I shared my proven process kung paano mo ‘to pwedeng i-practice. But to give you an idea, ito ‘yung overview no’ng process:

1: Know your numbers

Magkano ba ‘yung kinikita mo at saan napupunta ‘yung pera mo buwan-buwan? Ano ‘yung mga nagagastos mo?

Financially literate people are aware of their cash flow. Alam nila kung ano yung pumapasok at lumalabas. Kaya hindi sila sumosobra.

Get a piece of paper and list all your income sources. Tapos sa kabilang side, list all your expenses. It’s going to take some effort, pero malaki ‘yung magiging effect nito sa kung paano ka gumastos. Promise.

Once you know where you spend your money…

2: Identify your priorities

For sure, hindi lahat ng pinagkakagastusan mo ay mahalaga for you (and your goals). Hindi lahat ng binibili mo sa Lazada o Shopee, value-adding sa buhay mo. ‘Yung iba, na-engganyo ka lang bilhin kasi nainggit ka sa taong nakita mo somewhere. Pero sa totoo lang, hindi mo naman talaga kailangan.

Check your expenses and identify your priorities. Ano ‘yung mga bagay na excited kang bilhin? At ano ‘yung mga bagay na pwede kang mabuhay ng wala ‘yung mga ‘yun?

For example, mahilig akong kumain sa mga masasarap na restaurants. Pero hindi ako mahilig mag-travel. Good food? Value adding. Traveling? Not so much.

Iba-iba tayo ng priority sa buhay kaya dapat kilalanin mo ‘yung sarili mo. At ngayong alam mo na ‘yung priorities mo…

3: Allocate ONLY to your priorities

‘Yun lang ‘yung pagka-gastusan mo. Pro tip: maintain your current expenses (kung magkano ‘yung nagagastos mo sa mga mahahalaga para sayo). Tapos ‘yung nagastos mo sa mga hindi mahalaga, save it. Magugulat ka sa laki ng na-save mo at isa pa, hindi ka na magsisisi sa paggastos.

All debts are bad…

…if you can’t tell the difference between a good debt and a bad debt. Magkaiba ‘yung pangungutang na gagamitin mo para mag-improve ‘yung financial life mo kumpara sa pangungutang just to keep up with a lifestyle that you can’t afford.

Isa ‘to sa pinaka-malaking sign na financially literate ang isang tao: wala syang utang because of wrong choices. Kasi isipin mo, saan ba madalas makuha yung mga irresponsible debt or bad debts? 

Sa pagsusugal, sobra-sobrang bisyo, sa pagpasok sa mga ventures na hindi naman tayo pamilyar, pag-utang para may pangbayad ng mga big occasions ng buhay, at iba pa. In short, mga maling financial choices.

I know of this one person na nalubog sa utang dahil sa sugal. Na-involve siya sa sabong at no’ng una, okay pa. Nananalo pa. But as with everything gambling, the house always wins. Nabaon siya sa daan-daang libong utang to the point na nagkakaroon na siya ng death threats.

They almost sold everything they had just to pay for the debt. ‘Yung mga pinaghirapan nila ng ilang taon, mauubos lang dahil sa pagsusugal. Alam mo kung anong nagligtas sa kanya?

'Yung awa ng mga anak niya.

They had to immediately come up with at least half a million pesos just so their dad won’t disappear. Can you imagine doing that to the people you love? Ilulubog mo sila sa utang dahil lang sa maling choices.

And that, my friend, is the biggest stupidity when it comes to finances. ‘Yung pangungutang para lang sa bisyo o kapritso. As Proverbs 22:7 says, “The rich rules over the poor, and the borrower is the slave of the lender.”

Here are the real dangers of debt:

• Inuubos mo ‘yung buhay mo para mabayaran ‘yung isang bagay na nagastos mo na. And most of the time, ‘yung bagay na binili mo ay hindi naman importante para sayo.

• You fall farther and farther behind. Imbes na malayo na ‘yung narating mo financially, nagbabawi ka pa sa pagka-lugi mo.

• Nagiging pabigat ka sa mga tao sa paligid mo. Why? Because since they love you, they’re compelled to help you. Hindi lang buhay mo ‘yung apektado, pati buhay ng ibang tao.

Of course, that’s not where your story ends. Kung nakagawa ka man ng mga maling desisyon tungkol sa utang, you still have the ability to…

Kung nalubog ka sa utang, stop digging. Ang kailangan mong gawin ay bayaran ‘yung utang mo. Go at it as hard as you can as if your life depends on it. Because it does.

Step 1: List all your debt, including the interest

Gumawa ka ng spreadsheet at ilista mo lahat ng pinagkaka-utangan mo. From loans sa:

• Apps,

• Tao, 

• eWallets, 

• Bangko,

• At kung saan man.

Alamin mo kung ano ‘yung mga interest nila and look at the data objectively. And most important: stop kicking yourself in the butt.

It was a bad decision, not a bad life. You can move on from this.

Step 2: Pay off the life-threatening or high interest debts first

Tulad no’ng sa kakilala ko, bayaran mo muna ‘yung mga life threatening debts. Kung wala kang gano’n, thank God. Sobrang laking mental burden ‘yung kailangan mo nang magbayad sa utang, may takot ka pa sa buhay mo.

Anyway, pay off your high interest debts first. Sila muna ‘yung i-focus mo. I’m not saying na hindi mo dapat bayaran ‘yung iba. But it will do you more good if you focus on eliminating the high interest ones first.

For example, meron kang dalawang utang.

• Debt 1: ₱100,000.00 with 3% interest per month. ₱3,000.00 buwan-buwan ‘yung napupunta sa interest pa lang.

• Debt 2: ₱250,000.00 with 0.5% interest per month.

Which should you pay first? Debt 1. ‘Yung debt 2 kasi, nagyi-yield ‘yan ng ₱1,250.00 per month. Pero ‘yung una, ₱3,000.00 ‘yung nauubos sa pera mo buwan-buwan.

So, if you have, say, ₱10,000.00 per month na pambayad sa utang, pay ₱8,000.00 to debt 1 and ₱2,000.00 to debt 2.

Kung gusto mo ng mas magaan…

Step 3: Communicate with your debtors (and ask for a restructure)

‘Yung pagre-restructure, ang ibig sabihin niyan, gagawin ng mga debtors na mas madali ‘yung pagbabayad mo ng utang. Now, may chance na tumaas ‘yung utang mo, pero mas mababa ‘yung babayaran mo monthly.

Going back to debt 2 in the previous step, instead of paying ₱250,000.00 with 0.5% per month, baka ang babayaran mo na ay ₱300,000.00 divided by 60 months. That’s around ₱5,000.00 per month for 5 years.

Step 4: Sacrifice for a few months or years so you can recover

Here’s the hard pill to swallow: kailangan mo talagang mag-sacrifice para lang makabangon ka. You’ll go through a period of tightening your belt so you can save enough money to pay for your debts.

There’s no other way around this.

But let me offer encouragement to you. Hindi dito natatapos ‘yung istorya mo. The bigger the dragon, the more epic the hero. The more epic the hero, the more inspiring the story.

What you’re going through right now is a big dragon that you can slay with the right strategy and enough patience. And someday, it’s going to be a story worth telling.

At para mapabilis ‘yung pagbabayad mo ng utang…

Step 5: Earn more income

Kailangan mo ng mas mataas na income para mabayaran ng mas mabilis ‘yung mga utang mo. You don’t have to find a new job lalo kung satisfied ka sa trabaho mo ngayon. What you can do is to find a side hustle that makes you money outside of your full-time job.

Balik tayo sa sign #1.

Debt can be useful IF you use it the right way. At para hindi ka mabalik sa utang, kailangan meron kang…

The middle class are only one crisis away from being broke.

No’ng una kong mabasa ‘tong idea na ‘to, it really disturbed me. It spoke to one of the deepest fears I have when it comes to money. Parang underneath it all, there’s truth to it and we only sustain our health by the grace of God.

That’s how I understood the point of 1 Timothy 6:17-19. It reads, “Instruct those who are rich in this present world not to be conceited or to fix their hope on the uncertainty of riches, but on God, who richly supplies us with all things to enjoy. Instruct them to do good, to be rich in good works, to be generous and ready to share, storing up for themselves the treasure of a good foundation for the future, so that they may take hold of that which is life indeed.”

As you know, life is unpredictable. One day, you’re fine. The next day, may mga unexpected medical bills, car payments, house repairs, at marami pang iba na nakakapag-shake sa finances natin. And preparing for it is a sign of smart financial decision-making.

Intuitively, alam natin na dapat tayong mag-prepare para sa mga emergencies ng buhay. So that when it comes, it becomes mere inconveniences at hindi world-shattering events. 

This is why emergency funds are critical to your financial health: it’s the foundation of building wealth. Kung may ise-set kang financial goals pero wala kang nakatabi para sa mga emergencies, mawa-wipe out lang lahat ng na-invest o naitabi mo para sa ibang bagay.

Pero ang tanong, magkano dapat yung emergency fund mo? Paano ba ‘to kino-compute at ano ‘yung mga bagay na dapat mong isaalang-alang?

Para sakin, may iba’t-ibang factors yan. Dapat kino-consider mo rin yung age mo, level of responsibility, at current capacity.

• Age: Kung nasa 20s ka pa lang, you don’t have to pressure yourself to complete your emergency funds (generally, 3 to 6 months of your expenses). Kahit magtabi ka lang muna ng portion niyan, okay lang ‘yun. Let’s talk more on this later.

• Level of responsibility: The more responsibilities you have in life, the higher your emergency funds should be. Nitong nakalipas na pandemic, maraming parents ‘yung naka-realize na hindi sapat ‘yung 6 months of expenses para sa emergency funds nila. To cover for their family, they should save at least a year’s worth of expenses.

• Current capacity: As we grow older, we accumulate more experiences and skills. Dito tayo mas nagiging valuable sa marketplace. In short, habang mas tumatanda ka, mas tumataas ‘yung earning ability mo. And you can save more money for emergencies as you grow older.

Let’s say that you’re in your 20s earning ₱30,000.00 per month. Ang total expenses mo ay nasa ₱25,000.00 per month. Para mabuo ‘yung 3 to 6 months na emergency funds, you need at least ₱75,000.00 to ₱150,000.00 na fund.

Ang kaso lang, ₱5,000.00 lang ‘yung extra mo. Meaning, it would take you about 5 months of savings to “save” for your emergency fund. Kita mo bakit nakaka-pressure? Extra pressure ka kung may utang kang tinatapos bayaran.

So what to do? You can do it in steps.

1: Alamin mo yung total expenses mo per month. Track mo yung expenditures mo para alam mo magkano dapat ipunin mo.

The formula is: 

EF = Expenses x # of months you want covered

Once you know your number…

2: Mag-ipon ka lang muna kahit 20% to 40% ng required emergency funds. So going back to the previous example, say you’re earning ₱30,000.00 per month tapos gumagastos ka ng ₱25,000.00. At least ₱150k ang kailangan mong EF, pero kahit ₱30k muna ang itabi mo.

Pag meron ka na nyan, mas makakahinga ka na. You should…

3: Pay off your debts first

You should do everything in your power to pay off your debt as soon as possible. Malaki kasi masyado ‘yung mawawala sayo kapag inuna mo ‘yung ipon versus clearing your debt.

Para kang nag-iipon sa butas na timba.

4: Explore how you can earn more money

Lalo na yung side income. Kasi yung income sa full time job natin, di natin controlled eh. Subject to approval lahat yan. Pero yung side income, pwede mong palaguin. 

5: The money you earn on side income, divide mo into different things. 

Additional savings para sa emergency fund, additional enjoyment para i-spoil yung sarili mo, and future investments para mag-prepare sa future mo. All of these are necessary para maramdaman mong hindi mo tinitipid ‘yung sarili mo.

Your finances are dictated more by your psychology than by mathematics. At mas mahirap labanan ang sarili nating psychology.

Remember, things take time before you get them.

According to the BSP, 63% of Filipinos live paycheck to paycheck. Meaning, walang natitira sa sinasahod nila. Sabi naman ng Deloitte, 58% ng mga Pinoy millennials at 59% ng mga Gen Zs are living paycheck to paycheck. On a more recent survey by Grit PH, 47.5% of Filipinos don’t have savings. 

Here’s the point: more than half of the people you know can’t save money. They either:

• Don’t make enough money; or they

• Spend all the money they make

Iba pa ‘to sa emergency funds ah. Yung savings, para ‘to sa mga planned expenses o di naman kaya, nakatabi para may madali kang mahugot na pera sa mga bagay na hindi classified as emergency.

Ideally, yung emergency funds, ginagamit lang siya kapag totoong emergency na. Let’s say gusto mong mag-travel. So, nag-iipon ka para sa travel na ‘yun. And while you’re saving money, biglang nasira ngayon yung kotse o motor mo. 

Here’s the ideal scenario: yung panggastos sa pagpapagawa ng kotse, galing sa emergency fund yun. At yung para sa travel, ibang pag-iipon pa ‘yun. Kapag pinagsama kasi natin, wala rin. Nagagastos lang yung emergency fund at ang ending, nauubos din.

The question is, after how many years of working—whether you have a job or a business—how much savings do you have? O struggle pa rin para sayo ‘yung pag-iipon?

I’m not asking this to judge. I’m just pointing out the fact that saving money IS the way for you to achieve your financial goals. Kung may goals ka nga pero hindi mo naman tina-trabaho at hindi ka nagpe-prepare do’n, would you expect na makukuha mo ‘yung goals na ‘yun?

May mga financial gurus na nagsasabing “saving money is for losers.” Ibig nilang sabihin, kapag nag-ipon ka ng pera, nawawalan ka ng pera dahil kinakain ng inflation ‘yung buying power ng pera mo.

They have a point. Pero tingin ko, hindi ‘to ‘yung buong picture.

Let’s look at an extreme example: They often say that Warren Buffett, the greatest investor of all time, made his fortune by investing his money. 

But what they don’t tell you is that Warren Buffett started earning, SAVING, and investing money at the age of 10. Tingin mo ba kung hindi niya “tinago” ‘yung kinikita niya no’ng bata pa lang siya, makakapag-invest ba siya? Hindi.

Here’s another example: one of the most famous entrepreneurs online right now is Gary Vaynerchuk. He’s the founder of Vaynermedia, Vayner X, and he grew his father’s wine business to $60 million dollars during his 30s.

Pero alam mo anong totoo? He didn’t make a lot of money during his time working for his father’s business. Wanna know how he made his money? Kumita siya ng malaki no’ng isang beses na na-meet niya ‘yung early employees ng Facebook, Twitter, at Tumblr. At dahil sa connections niya sa kanila, nabigyan siya ng early privilege to invest in those companies.

And guess what? He was able to make the investment because he SAVED his money. That’s how important saving money is. 

This is why in my 6-Figure Savings Challenge, I emphasize the power of saving money. Tapos binigyan ko rin sila ng proven roadmap para finally, makapag-save sila ng 6-figures in one year or less.

Aside from having the opportunity to invest money kung meron kang savings, marami pang nabibigay ‘to na psychological benefits:

1: Increased sense of security

Kapag may savings ka, hindi ka basta-basta nagwo-worry. Hindi ka laging stressed at hindi nauubos ‘yung oras mo kakaisip kung saan ka kukuha ng pera.

2: You feel more in control of your finances

‘Yung ibang tao, ang feeling nila wala silang kontrol sa sarili nilang pera. Kapag may dumating na pera, nagagastos lang nila ng hindi namamalayan. At kahit anong pilit nilang pigilan ‘yung sarili nila, they can’t do it.

But saving money, no matter how small, gives you the feeling that you’re in control. Instead of letting money control your life, you’re the one calling the shots.

3: Improved optimism and financial confidence

Unti-unti mong nakikitang lumalapit ka sa mga financial goals mo kapag may savings ka. For example, gusto mong bumili ng bahay. Kapag nakakapag-ipon ka para do’n at nakikita mong lumalaki ‘yung ipon mo, unti-unti mong navi-visualize ‘yung bahay na gusto mong bilhin.

It also gives you the motivation to keep going—to keep working on your goal. Kailangan kasi nating makaramdam ng sense of progress to want to keep going. Kapag wala no’n, mahirap i-motivate ‘yung sarili natin. 

And what better way to measure your financial progress than looking at your bank account?

Sabi nga ni Benjamin Franklin, “A penny saved is a penny earned.” In terms of being financially smart, saving money is as important as learning how to earn. After all, it’s not about how much you make. It’s about how much you keep.

Saving money is great. But the real goal of money is to make you wealthy. And you only become wealthy if you put your money in vehicles that make more of it.

Kapag kasi nakalagay lang sa bank account mo ‘yung pera mo, sobrang bagal ng growth do’n. Mas mabilis pang nauubos ‘yung pera mo dahil sa inflation kaysa sa tinutubo nito.

Now you might be thinking, “Eh teka. Akala ko ba kailangan kong i-save ‘yung pera ko? Di ba parang kabaliktaran ‘to ng previous point mo, Jeric?”

Frankly, no. Savings and investment co-exist if you want to build your financial wealth. You need to have enough cash savings para confident ka na kapag may nangyari, may mahuhugot ka. At kailangan mo rin ng investments para mapalago mo ‘yung perang meron ka.

In short: hindi ka lang may ipon. Pero ‘yung ipon mo, nagagawa mo ring palakihin kasi nilalagay mo ‘to sa mga investment vehicles na kayang kumita ng pera.

Aside from that, investing is the best way to stay rich. Pansin mo ‘yung structure ng sentence—stay rich? Maraming tao ‘yung marunong gumawa ng pera pero dadating ‘yung panahon na walang-wala na. We see these in athletes, actors, salespeople, and other high income fields. In short, high income, low investment.

So the real question is…

Sa totoo lang, pare-pareho lang naman ‘yung mga vehicles na pwede nating gamitin when it comes to investing. Some examples of investment vehicles are:

• Stocks

• REITs

• Bonds

• Mutual Funds

• UITFs

• Cryptocurrency

• Real Estate

• Gold, Silver, and precious metals

• T-Bills

• And so on

Pero takot ‘yung mga taong tumaya ng pera nila dahil sa tatlong malaking rason:

Reason 1: Fear of loss or failure

Isa sa pinakamalaking rason kung bakit hindi tayo nag-iinvest ay dahil takot tayong malugi o mawala ‘yung perang pinag-hirapan natin. But it’s interesting to think that the same hard-earned money we’re afraid to lose, we gamble by going into scams and “get rich easy” schemes (more on this later).

Going back, takot tayo dahil: (a) hindi pa natin naranansang mag-invest, at (b) dahil madalas tayong makarinig ng stories kung saan nalugi ‘yung isang taong nag-invest. O madalas tayong makarinig na risky ang stock market, real estate, at kung anu-ano pa.

Yes, there’s risk involved. But there’s a difference between “risky” and “risk.” Risky ‘yung kapag nagkamali ka, wala ka nang chance baguhin ‘yung pangyayari. 

For example, it’s risky to put ALL your money and then borrow some more para lang may “ma-invest” ka sa mga investments na dodoble ‘yung pera mo in 3 months. Risky ‘yung pagda-drive ng gabi nang lasing ka. Risky ‘yung mag-commit ka ng crime para lang kumita ka ng pera.

On the other hand, risk is in everything we do. May risk sa pagta-trabaho, sa pagbyahe mo sa umaga, sa pagkain ng mga pagkain sa restaurant. At syempre, sa investing.

But those are sensible risks. Meaning, kung may mangyari man, hindi ‘to life-threatening at may pwede kang gawin para mabago ‘yun.

Embrace the risk in everything but avoid every risky things.

Reason 2: Fear of feeling stupid

At ‘yun ay manggagaling sa fact na hindi mo (pa) alam ‘yung ginagawa mo. Kung wala kang prior experience na mag-invest, nakakatakot maglagay ng pera do’n.

We always feel stupid when we don’t know how to do something. And that’s okay. Ang mahirap lang, kapag nag-stay tayong walang alam kung paano palaguin ‘yung sarili nating pera.

This fear is countered by the right amount of education and a massive amount of execution. Hindi mo kailangang malaman lahat. Pero kailangan mong mag-take ng maraming reps para masanay ka at ma-develop mo ‘yung skill.

Reason 3: Fear of commitment

You only get the best returns if you stay in the game for as long as you can.

Sobrang daming libro tungkol kay Warren Buffett and a lot of them are good. ‘Yung isang flaw lang nila, ang dini-discuss nila ay ‘yung investing methodology ni Buffett. Pero hindi nila dini-discuss na more than 75 years nang investor si lolo Warren.

And if you do something enough for 75+ years and keep improving at it, you can’t NOT be a master.

‘Yung pag-iinvest ay isang infinite game. Ibig sabihin, walang klarong panalo at walang klarong talo. Ang punto no’ng paglalaro mo ay patuloy kang maglaro. The only failure is when you stop and the only way to win is to keep playing.

Would you drink a prescription drug without going to the doctor?

The smart answer is no, ‘di ba? But a lot of people buy insurance just because insurance agents are quick to sell it to them. Hindi nila alam ‘yung pinapasok nila at hindi rin masyadong nae-explain ng mga advisors.

Why? Because although maraming okay na financial advisor, a lot of them are also only after your money. Quick buck, kumbaga. They are insurance sellers, not advisors.

The thing is, maraming iba’t-ibang klase ng insurance:

• Term Life insurance

• Whole Life insurance

• VUL (combination of life insurance & investment)

• Endowment

• Car insurance

• Fire insurance

• Business insurance

• And so on

And it all depends on what you need right now. ‘Yung insurance kasi ay isang financial instrument na may specific na gamit. At ‘yun ay ‘yung pag-hedge o pag-protect sayo sa probability na magkasakit ka o mamamatay ka. Para ‘yung mga tao sa paligid mo, hindi maghirap.

Maganda ‘to para sa mga breadwinners. Pero kung single ka, walang umaasa sayo, sarili mo lang inaalala mo, hindi mo PA kailangan ng VUL, for example. It might be better (and cheaper) for you to just take term insurance. Or HMO ng company niyo.

I’m not against insurance. But you have to learn the right use of it if you’re going to avail one. Importante ‘to lalo kung may mga taong umaasa sayo at ayaw mo silang maghirap in case na may mangyaring hindi inaasahan sayo.

Here’s a video of Fitz Villafuerte on how to compute your Life Insurance Coverage:

Contrary to what the majority know, there’s a difference between get rich quick schemes and scams (or get rich “easy”). There are LEGIT get rich quick schemes, and it’s not what you might think.

“Get rich easy” schemes are investment opportunities where you won’t have to do anything to get rich. Ilalagay mo lang daw ‘yung pera mo tapos tutubo na ‘yun. Walang tangible assets, walang projections, walang math. In short, tutubo lang sa hangin.

The biggest of such schemes happened in 2016 to 2019. I don’t know if you remember Kapa? They were able to scam 5 million Filipinos! And based on estimates, meron silang nalikom na ₱50 Billion Pesos na investment.

The scheme was, the founder of a religious group, Joel Apolinario, started a cooperative. Tapos nangako sila na kapag naging member-donor ka sa cooperative na ‘yun, you’ll get a 30% monthly return, for life!

You have to invest ₱10,000.00 para maging member-donor ka ng Kapa. And ₱10,000.00 with a 30% monthly return, sobrang laking halaga no’n. Kaya hindi nakakapagtaka na maraming financially illiterate Filipinos ‘yung nahulog sa scam na ‘yun. Good thing, natigil na ‘tong ponzi scheme na ‘to.

Financially literate people know how to evaluate investment opportunities. At hindi sila naga-gancho ng mga ganitong klaseng schemes.

If something sounds too good to be true, it probably is. Sadly, maraming Pinoy pa rin ‘yung hindi natututo at patuloy na naniniwala sa mga ganitong scams. Anyway, that’s an example of a “Get rich easy” scheme. Wala kang gagawin, magbabayad ka lang, tapos pa-easy-easy ka na lang.

On the other hand, get rich quick schemes are normal and there are legit ways of doing it. In fact, you see it every day! Pero explain ko muna bakit.

Quick is relative. For example, I can get rich in 30 years by saving 10% of my income and growing it by 10% per year through investing. That’s quicker than someone who saved all their working life (say 45 years) without investing in anything.

Pero mas mabilis d’yan ‘yung mga taong nakakapag-save at retire ng mayaman in 20 years. Paano? By finding better investment vehicles katulad ng real estate. But even quicker than that is someone who can be rich in 5 to 10 years by growing a business.

See? Quick is relative. And schemes are nothing but plans put into action. Walang masama sa get rich quick schemes if you’re doing it the right way—something that requires work, patience, and a good strategy.

Ang question lang: are you focusing on getting rich easily or getting rich quickly?

Ito ‘yung isa sa pinaka-malaking tell tale sign na financially literate ang isang tao—kapag meron siyang plano. Ibig sabihin, alam niya kung ano ‘yung pangarap na tina-trabaho niya. At alam niya kung magkano ‘yung dapat niyang “nest egg” para makuha ‘yung mga pangarap na ‘yun.

Remember the saying? A dream without a plan is just a wish. If you don’t have a financial roadmap, hindi mo alam kung nagkakaroon ka ba ng progress. At best, nanghuhula ka lang at umaasa na magiging okay ang lahat.

But life is unpredictable. Maraming bagay ‘yung mangyayari sayo that would derail your savings, investments, and other things. At kung wala kang plano, lalo ka lang makakaramdam na nawawala ka.

No’ng nag-aaral ako ng Financial Planning, ito ‘yung mga steps na natutunan ko sa paggawa n’yan. These are simple explanations, of course. But it’s enough so you can start it on your own. 

Kung kaya rin ng budget mo, I suggest hiring a Financial Planner (hindi insurance agent) para tulungan kang mag-plano ng finances mo.

Step 1: Check your cash flow and net worth

Tignan mo ‘yung cash flow mo kung positive ba o negative. Check your expenses and think of how you can maximize your income first. Balik tayo sa conscious spending—baka may mga bagay sa buhay mo na pinaglalaanan mo ng pera pero hindi mo naman kailangan.

You can do this in a simple spreadsheet. Just list your income and common expenses. Tapos mag-create ka ng budget na kaya mong panindigan (remember your Happy Shopping at Do-Not-Buy List?).

Then you also check for your net worth. Kailangan mong i-compute ‘yung value ng mga bagay na meron ka at magkano ‘yung mga utang mo sa ibang tao. Net worth kasi ‘yung pinaka-malaking sukatan ng richness eh.

Step 2: Set some goals

Anong gusto mong makuha at kailan mo ‘yung gustong makuha? For example, bahay at lupa. Saang lugar, anong itsura, at gaano kalaki ‘yung bahay na gusto mo? Tapos mag-estimate ka ng magkano ‘yung kailangan mo para sa bahay na ‘yun. Then list other goals and put a price tag in it.

Tapos i-rank mo ‘yung goals mo depende sa order ng priority. Kung meron kang 5 sinulat na goals, ano ‘yung #1 priority mo? Ano ‘yung pangalawa, and so on? Kapag meron ka na n’yan, proceed to…

Step 3: Plan on how you’ll get it

Gagawa ka ng plano kung paano mo maaabot ‘yung bagay na ‘yun. Let’s say that you want a 2-bedroom house, hindi masyadong malaki, enough para sa family na gusto mo in the future. Then let’s say na nasa rural area ‘yung gusto mong tirahan—medyo probinsya vibes. And the current value of that house and lot is around ₱2.5 million.

Tapos ang second goal mo ay mag-retire by age 45. Meaning, meron kang enough income without doing much work at nako-cover no’n ‘yung lifestyle mo.

Say you’re earning ₱50,000.00 per month. Tapos ang gastos mo ay around ₱35,000.00 per month, sagad na. Nand’yan na ‘yung rent, utilities, food, and so on. You’re able to save ₱15,000.00, 30% of your income. 

Then let’s say that you have a ₱75,000.00 savings in the bank. So paano mo siya hahatiin?

Para sakin, you since #1 priority mo ‘yung bahay, you can allocate a bigger portion of your savings sa bagay na ‘yun. Halimbawa ₱9,000.00 para sa pag-iipon sa bahay tapos ₱6,000.00 naman para sa retirement fund mo.

Assuming you put:

• ₱25,000.00 of your savings as seed money sa bahay

• ₱50,000.00 of your savings sa retirement fund

Then you put those savings into investment accounts that are safe and grow at least 8% per year.

At the end of 15 years, meron kang total:

• Budget for house and lot: ₱3,217,779.32

• Retirement fund: ₱2,255,416.93

And that’s assuming na wala kang increase, walang promotion, walang additional income in 15 years.

(Note: I made a lot of assumptions and simplistic computations in this scenario. Sa totoong buhay, mas matrabaho ‘yung ginagawang financial planning kasi maraming bagay na kailangan nating alamin.)

Step 4: Put your plan into action

Syempre, dapat hindi natin bubulukin ‘yung planong ginawa natin. Sticking to and adjusting your financial plans, kahit pa minsan ay mahirap, is important. ‘Yan ‘yung susi para makuha mo ‘yung future na gusto mo para sa sarili mo at sa pamilya mo.

So ito ‘yung ilan sa mga signs na financially literate ang isang tao.

1: Marunong siyang gumawa ng sariling pera

2: They spend less than they earn

3: Hindi sila baon sa utang dahil sa maling desisyon

4: May emergency fund sila

5: May savings sila

6: May investment sila

7: Alam nila ‘yung gamit ng insurance

8: Hindi sila naloloko ng mga get rich easy schemes

9: May financial plan sila

That’s it for me, thanks for reading and remember…

Just conquer today,

Jeric Timbang