Personal or family budgeting is very simple, yet majority find it difficult to do. It is so simple that the only mathematical function that one may use are the addition (+) and subtraction (-). Multiplication or division is seldom used. Finding the square root or those advanced functions are never ever been useful in preparing your personal or family budget.
People find it difficult to follow not because they do not know how to add or subtract, nor they do not have the calculator. The main reason therein is that when speaking of the subject about money and spending, a great deal of emotion is involved.
Imagine for a moment that you receive from your employer a news that on or before the christmas eve you will receive a bonus equivalent to 200% of your salary. What do you think are the things that your mind will be processing? Think deeply and do this exercise for a few moment before you proceed to the succeeding paragraph...
...done with the exercise? I know it is difficult to imagine at this point of time of crisis as bonus are hardly given by every employer. But for the sake of this discussion, I am giving you a chance to really imagine and think seriously what really want to do with this bonus received?
More often than not, when people received a news like this the things that they will immediately think are new stuffs like camera, laptop, cellphone, clothes, and other items to spend for. Seldom people think of setting aside major portion of the amount for savings. Worst is that very less likely people think to set aside for giving.
Whether you agree with me or not, that is a fact. A very sad fact at that.
Everywhere you go commercial advertisements are abounding. Billboards on the streets, on the newspapers, televisions, radio stations, and every other medium these intelligent marketers could think of are being utilized. Some taxi cabs in Al Ain City are now being attached with an advertising board at the back and top.
These things that we continually see and hear every where gets into our subconciousness. Little did we know, our emotions are being hyped up to think of stuffs whenever we are anticipating receipt of any monetary value.
The emotion stirred up by this daily dose of commercial advertisements around us is the main reason why we could not even start to prepare and follow a personal or family budget. As simple as addition and subtraction are even so difficult to do when it is overshadowed by the emotions.
Overcome this emotions by being content. For Paul in his epistle to Timothy wrote that "contentment with godliness is great gain."
Tuesday, December 22, 2009
Tuesday, December 15, 2009
Saving for the Rainy Days
Last weekend, the United Arab Emirates (UAE) experienced the heaviest downpour in its history. It rained for almost three consecutive days, though on and off.
The heavy downpour resulted in flooding of the main thoroughfares. The streets and most of the places were flooded and the waters will take days or even a week or two before it subsides, for the drainage system is not designed to accommodate so much volume of water as rain is a luxury in this place of the world.
Even most of the villas experienced leaks over its roof for these were not tested for water leaks when it was constructed. It seldom rains in this part of the world. Rain in this part of the world would only visit the place one to three times a year, in so far as I had been experiencing for the last five years. And it was not so heavy as, it was lately.
Who would have thought such a thing would happen? So you may ask or say. But, it happened.
Let me now drive to the importance of having an emergency fund set aside, using the recent event in the UAE that was just narrated in the preceding paragraphs as an analogy.
Even if rain seldom visits the desert, but still it will eventually visit. The same is true with our own lives. Bad things will eventually happen as long as your heart still beats. As long as you are still walking consciously, it is inevitable that one of these days there will come some emergency. From a breakdown of your car, home appliances to a sickness or death of loved ones.
As UAE has not provided enough provision for its drainage system, once it rained for a few minutes, streets are easily flooded and water would subside turtle pace. A heavy downpour that was just experienced recently made the municipality of Al Ain deploy trucks to siphon out water on the major thouroughfares, so that it would still be passable by motorists. If you had not set aside an emergency fund, and a heavy rain would visit you, then you are forced to take out of the ordinary course of actions like using your credit card or borrowing just to make your way out of the flood caused by the rain.
Finally, as a result of deploying those trucks on the streets posed dangers to motorist as it is blocking the way. So if you are using your credit card for emergency payments, then you are at risk of not paying it off for it is now blocking off some of the portions of your income. In other words, it caused a heavy strained on your budget.
If you already have set aside an emergency fund, it is suggested that you review it and see to it that the amount is approximately three to six months of your living expenses. Most financial advisers recommend that this amount is a comfortable level of emergency fund. And this fund should not be tied up in any other investment, where it is not readily available as cash when neeeded.
Now for those who do not have one as yet, this is the best time for you to meditate on its importance as laid down above. It is up to you to heed this advise for you to set up one. Like in my previous article, it is suggested as your first baby step to set up a 1,000 dirhams and build on this month after month until you reach your targeted amount.
As it rained heavily in the desert, so will come in your life too. Start saving for the rainy days.
The heavy downpour resulted in flooding of the main thoroughfares. The streets and most of the places were flooded and the waters will take days or even a week or two before it subsides, for the drainage system is not designed to accommodate so much volume of water as rain is a luxury in this place of the world.
Even most of the villas experienced leaks over its roof for these were not tested for water leaks when it was constructed. It seldom rains in this part of the world. Rain in this part of the world would only visit the place one to three times a year, in so far as I had been experiencing for the last five years. And it was not so heavy as, it was lately.
Who would have thought such a thing would happen? So you may ask or say. But, it happened.
Let me now drive to the importance of having an emergency fund set aside, using the recent event in the UAE that was just narrated in the preceding paragraphs as an analogy.
Even if rain seldom visits the desert, but still it will eventually visit. The same is true with our own lives. Bad things will eventually happen as long as your heart still beats. As long as you are still walking consciously, it is inevitable that one of these days there will come some emergency. From a breakdown of your car, home appliances to a sickness or death of loved ones.
As UAE has not provided enough provision for its drainage system, once it rained for a few minutes, streets are easily flooded and water would subside turtle pace. A heavy downpour that was just experienced recently made the municipality of Al Ain deploy trucks to siphon out water on the major thouroughfares, so that it would still be passable by motorists. If you had not set aside an emergency fund, and a heavy rain would visit you, then you are forced to take out of the ordinary course of actions like using your credit card or borrowing just to make your way out of the flood caused by the rain.
Finally, as a result of deploying those trucks on the streets posed dangers to motorist as it is blocking the way. So if you are using your credit card for emergency payments, then you are at risk of not paying it off for it is now blocking off some of the portions of your income. In other words, it caused a heavy strained on your budget.
If you already have set aside an emergency fund, it is suggested that you review it and see to it that the amount is approximately three to six months of your living expenses. Most financial advisers recommend that this amount is a comfortable level of emergency fund. And this fund should not be tied up in any other investment, where it is not readily available as cash when neeeded.
Now for those who do not have one as yet, this is the best time for you to meditate on its importance as laid down above. It is up to you to heed this advise for you to set up one. Like in my previous article, it is suggested as your first baby step to set up a 1,000 dirhams and build on this month after month until you reach your targeted amount.
As it rained heavily in the desert, so will come in your life too. Start saving for the rainy days.
Tuesday, December 8, 2009
Make It Simple and Cut Those Plastics in Two
The past couple of weeks, the word "simple" keeps on bogging my head once in a while especially on my devotional time. It was confirmed last night with the illustration of Pastor Edward Barcial during his exhortation at our midweek service.
When he related to us one of the email messages he received from a friend, I recalled that sometime March 2009, I also received from my sister the same email message, though a Cebuano version. The story speaks of the simplicity of life for all that were born in the 1950's, 60's, 70's, and early 80's. It was such a detailed narration of how we, as I am one of those born during those years lived our life very simply without the inventions and innovations enjoyed by kids these days like internet, playstation, xbox, iphone, cellphones and other gadgets that most kids are enjoying in this new millennium.
To add to that simplicity of life, I could vividly recall that my parents and grandparents were living life without credit cards. My fraternal grandfather, to whom I consider as my first mentor in personal finance did not even have any form of major borrowing from any financial institutions as he vehemently discourages resorting to any form of borrowing.
Without credit cards or borrowing, I am proud to say that my grandfather acquired properties and other stuffs so precious in the 1970's such as television, refrigerator, or even a car. His main secret is save, save, and save. And the simple formula is to spend lesser than what you earn.
Let me now stress on one of those innovations that has been introduced to give convenience to the consuming public, the credit card. Major credit card providers are marketing this product to provide convenience as one can purchase cashless, easy payments, deferment of payments, and many other perks and rewards system. Behind those convenience and comfort, are the evils that it carries and are not disclosed. For this, everyone fairly knows what I am trying to say.
In the previous article, I made mention that my little gold cards have already undergone plastic surgery. I just decided to make my life simple, especially in the area of spending. Simply put, my family and I will only be spending on things that are on budget and on cash basis.
Aside from the fact that in 2010 the bank that issued my credit cards will start to impose a AED10 ($2.50 approximately) per month as charges, where it was marketed as free of membership and annual fees for life, I decided to cut these in order to show an example to my children. I am now walking my talk as I kept on reminding them the dangers of spending on credit cards and borrowing.
The following are the dangers of using credit cards:
If your answer is not, good luck to a complicated life.
When he related to us one of the email messages he received from a friend, I recalled that sometime March 2009, I also received from my sister the same email message, though a Cebuano version. The story speaks of the simplicity of life for all that were born in the 1950's, 60's, 70's, and early 80's. It was such a detailed narration of how we, as I am one of those born during those years lived our life very simply without the inventions and innovations enjoyed by kids these days like internet, playstation, xbox, iphone, cellphones and other gadgets that most kids are enjoying in this new millennium.
To add to that simplicity of life, I could vividly recall that my parents and grandparents were living life without credit cards. My fraternal grandfather, to whom I consider as my first mentor in personal finance did not even have any form of major borrowing from any financial institutions as he vehemently discourages resorting to any form of borrowing.
Without credit cards or borrowing, I am proud to say that my grandfather acquired properties and other stuffs so precious in the 1970's such as television, refrigerator, or even a car. His main secret is save, save, and save. And the simple formula is to spend lesser than what you earn.
Let me now stress on one of those innovations that has been introduced to give convenience to the consuming public, the credit card. Major credit card providers are marketing this product to provide convenience as one can purchase cashless, easy payments, deferment of payments, and many other perks and rewards system. Behind those convenience and comfort, are the evils that it carries and are not disclosed. For this, everyone fairly knows what I am trying to say.
In the previous article, I made mention that my little gold cards have already undergone plastic surgery. I just decided to make my life simple, especially in the area of spending. Simply put, my family and I will only be spending on things that are on budget and on cash basis.
Aside from the fact that in 2010 the bank that issued my credit cards will start to impose a AED10 ($2.50 approximately) per month as charges, where it was marketed as free of membership and annual fees for life, I decided to cut these in order to show an example to my children. I am now walking my talk as I kept on reminding them the dangers of spending on credit cards and borrowing.
The following are the dangers of using credit cards:
- There is a tendency to spend more than paying your purchases and other spending by cash. Swiping those plastics in lieu of cash takes away that physical sign that will signal you to stop spending. Spending now depends on the credit limit rather than the available cash.
- Swiping those plastic money also tends you to pay more. Some establishments are adding up a percentage of amount billed, like the gasoline stations when paying with your credit card. And if your total spending exceeds your available cash, you may not be able to pay for the total amount billed, hence paying additional interest and other finance charges.
- Depending on your credit card as a mode of payment, your purchasing decision is based on a synthetic value, rather than the true value of the item. Decision is now based on whether you can afford the monthly installment rather than the total value of the item.
- It is very difficult for you to trace your spending and purchases if you are dependent of the plastic money. You will just be surprised one day, upon receipt of the monthly statement how much you had spent, and mostly on unnecessary items. Hence, your budget is already ruined.
If your answer is not, good luck to a complicated life.
Tuesday, December 1, 2009
A Tool in Danger of Transcending To become Your Master
"Debt is often necessary and useful tool..." a quote from an article entitled "Manage debt before it hurts you" by Richard Hextall and published in the Gulf News on November 28, 2009 under the "your money section" of the said daily newspaper. I am in agreement with all the statements and arguments presented in this article, but this one.
Before proceeding further on, let me make this clear. This piece is not a criticism, be it constructive or otherwise to the aforesaid Gulf News article. In fact, I admire the whole article that I find so insightful. I am just disturbed in the quoted statement, and this I am just presenting my own argument, why I am not accepting this statement as is.
Based on personal experience, readings (both the bible and other secular materials on personal finance), and learning from various preachings and seminars attended to, debt should not just be used indiscriminately as a handy tool to purchase on just anything, even including a car or a house. I should then say that it is not necessary and useful that one should often resort to.
I should be a hypocrite if I say I had not resorted to borrowing. I did. However, my wife and I vowed not to resort to borrowing, as best we could. We are in the process of pre-terminating our car loan soon. Credit cards were already cut-off and had already performed plastic surgery to my credit card, after receiving a letter from the provider that in 2010 a service fee will be collected. I just took the card for they promised a lifetime free dues and administrative charges (as opposed to financial charges and penalties). A detailed write-up on the reasons why a credit card should be cut-off will be published in the succeeding weeks.
God's warning in Proverbs 22:7 which expressly states that a borrower is a slave to the lender made a very great impact to the way I am handling my finances. For as for me and my household we want to serve the Lord as long as we live. And how can one serve the Lord if one is not financially free. I just want to be slave to the Lord and not the Lender.
The danger then, when one consider debt as a necessary and useful tool is its transcendental effect where the tool may later on becomes the master. One may wake up one day and realize that more and more time is now spent thinking and working for ways just to keep up with the payment of the loans. Quality time with the love ones, fellowship with the brethren, or the prayer and devotional time is now in danger of being compromised.
Ever wonder why people in a highly urbanized areas are always in a hurry? These people are always short of the 24 hours and are living a fast paced life. This is one evident effect that the world is controlling them. Most of these people are now becoming slave to earning more to pay off amortizations left and right.
And even if you are not living in the metropolis, but you are spending more and more time with extra work to earn extra income to payoff your monthly amortizations, you are in the brink of becoming a slave to the lender.
As a parting statement, let me quote Thomas Jefferson, the third president of the United States of America saying "do not spend your money until you have it." In this way, you will not have any chance of availing a loan.
Before proceeding further on, let me make this clear. This piece is not a criticism, be it constructive or otherwise to the aforesaid Gulf News article. In fact, I admire the whole article that I find so insightful. I am just disturbed in the quoted statement, and this I am just presenting my own argument, why I am not accepting this statement as is.
Based on personal experience, readings (both the bible and other secular materials on personal finance), and learning from various preachings and seminars attended to, debt should not just be used indiscriminately as a handy tool to purchase on just anything, even including a car or a house. I should then say that it is not necessary and useful that one should often resort to.
I should be a hypocrite if I say I had not resorted to borrowing. I did. However, my wife and I vowed not to resort to borrowing, as best we could. We are in the process of pre-terminating our car loan soon. Credit cards were already cut-off and had already performed plastic surgery to my credit card, after receiving a letter from the provider that in 2010 a service fee will be collected. I just took the card for they promised a lifetime free dues and administrative charges (as opposed to financial charges and penalties). A detailed write-up on the reasons why a credit card should be cut-off will be published in the succeeding weeks.
God's warning in Proverbs 22:7 which expressly states that a borrower is a slave to the lender made a very great impact to the way I am handling my finances. For as for me and my household we want to serve the Lord as long as we live. And how can one serve the Lord if one is not financially free. I just want to be slave to the Lord and not the Lender.
The danger then, when one consider debt as a necessary and useful tool is its transcendental effect where the tool may later on becomes the master. One may wake up one day and realize that more and more time is now spent thinking and working for ways just to keep up with the payment of the loans. Quality time with the love ones, fellowship with the brethren, or the prayer and devotional time is now in danger of being compromised.
Ever wonder why people in a highly urbanized areas are always in a hurry? These people are always short of the 24 hours and are living a fast paced life. This is one evident effect that the world is controlling them. Most of these people are now becoming slave to earning more to pay off amortizations left and right.
And even if you are not living in the metropolis, but you are spending more and more time with extra work to earn extra income to payoff your monthly amortizations, you are in the brink of becoming a slave to the lender.
As a parting statement, let me quote Thomas Jefferson, the third president of the United States of America saying "do not spend your money until you have it." In this way, you will not have any chance of availing a loan.
Tuesday, November 24, 2009
Damn If You Do and Damn If You Don't
"A man devoid of understanding shakes hands in a pledge, and becomes surety for his friend." Proverbs 17:18 (NKJV)
Juan applied for a loan in one of the financial institutions in the United Arab Emirates. As practiced, before the financial crisis, most financial institutions are lending at 10 to 20 times ones salary. As long as you have your payslip and your employer's certification you can avail of the loan. One more intriguing requirement to be submitted is a co-signatory of the loan.
Since Juan is now ready with the documentary requirements showing proof of employment and salary, he approached Pedro as his co-signor. Pedro, being a close friend of Juan openly agreed to become a co-signor or a surety to the loan applied for by Juan.
Many can relate to the aforesaid story. One could relate to either Juan or Pedro. And this piece is mainly dedicated to that of Pedro's case.
Statistics show that more often than not, the co-signor or the surety ends up paying for the loan of the principal. Financial institutions knew it as a statistical fact, thereby requiring somebody who will end up as a sacrificial lamb.
In the story of Juan and Pedro above, the latter had two options. He could say yes or no. If he says yes, then he could be included as part of the statistics and if it so happens, what do you think would happen to the relationship of the two gentlemen? It is simply ruined.
If Pedro says no, two things could happen. First, Juan's loan application would be denied outright unless he could look for another co-signor. Secondly, because of the denial by Pedro, the relationship would no longer be the same again. It would be strained as a logical consequence to Pedro's refusal to become a co-signor.
It seemed that, if one will put himself in the shoes of Pedro, he could be in a situation of damn if you do and damn if you don't. Either way, the relationship will never be the same again if you refuse to become a surety. And when you accepted to become a surety that later on turned out to be paying the principal's obligations, the relationship is ruined.
That explains why the Bible in Proverbs described a person who enters into becoming a surety as devoid of understanding. It is not only that he is inviting himself to become one of the statistics, but allowing a friend avail of a loan where he may not have the capacity to pay. In most cases, these loans are just spent unwisely.
The wisest thing to do then is to never co-sign a loan. Never. Never. Never...
Juan applied for a loan in one of the financial institutions in the United Arab Emirates. As practiced, before the financial crisis, most financial institutions are lending at 10 to 20 times ones salary. As long as you have your payslip and your employer's certification you can avail of the loan. One more intriguing requirement to be submitted is a co-signatory of the loan.
Since Juan is now ready with the documentary requirements showing proof of employment and salary, he approached Pedro as his co-signor. Pedro, being a close friend of Juan openly agreed to become a co-signor or a surety to the loan applied for by Juan.
Many can relate to the aforesaid story. One could relate to either Juan or Pedro. And this piece is mainly dedicated to that of Pedro's case.
Statistics show that more often than not, the co-signor or the surety ends up paying for the loan of the principal. Financial institutions knew it as a statistical fact, thereby requiring somebody who will end up as a sacrificial lamb.
In the story of Juan and Pedro above, the latter had two options. He could say yes or no. If he says yes, then he could be included as part of the statistics and if it so happens, what do you think would happen to the relationship of the two gentlemen? It is simply ruined.
If Pedro says no, two things could happen. First, Juan's loan application would be denied outright unless he could look for another co-signor. Secondly, because of the denial by Pedro, the relationship would no longer be the same again. It would be strained as a logical consequence to Pedro's refusal to become a co-signor.
It seemed that, if one will put himself in the shoes of Pedro, he could be in a situation of damn if you do and damn if you don't. Either way, the relationship will never be the same again if you refuse to become a surety. And when you accepted to become a surety that later on turned out to be paying the principal's obligations, the relationship is ruined.
That explains why the Bible in Proverbs described a person who enters into becoming a surety as devoid of understanding. It is not only that he is inviting himself to become one of the statistics, but allowing a friend avail of a loan where he may not have the capacity to pay. In most cases, these loans are just spent unwisely.
The wisest thing to do then is to never co-sign a loan. Never. Never. Never...
Tuesday, November 17, 2009
"To Lend Or Not to Lend?"
Have you been approached by a brethren, a friend, or a relative and asking you "can you lend me a few bucks?" How have you reacted? What was your response?This scenario is not uncommon to most, if not all of us. In most cases, this type of a scenario ends bitterly as relationship has now shifted to one being a slave to the other. (Proverbs 22:7)
The three common reasons I have observed why a brethren, a friend or a relative borrows:
- To pay-off a maturing obligation from credit cards, bank loan, or worst from loan sharks, while his or her cash will only be available in the next couple or so days.
- To augment the available fund use to pay an item he or she purchased that accordingly is a discount purchase of something he or she thinks a necessity (in most cases are stuff that one can live without like a cellphone) while his or her salary or loan application will not be released until the next couple or so days.
- To be used for a necessity, like an emergency that happens in a family such as, but not limited to purchase of medicine or for hospitalization.
However, you might consider another angle on this scenario. Have you not thought that in giving in with their request and lending them with your extra cash, you are just aggravating their problem.
The worst thing you would do is to borrow in order to lend to your friend. Or sign as a guarantor for your friend. But, these things will be discussed in a separate topic soon.
You may consider the following before lending your precious cash, again with the assumption that by doing so will not strain your own budget:
- You are not teaching him or her to get out of debt and manage his or her finances wisely. As you lend to someone to pay off the maturing debts, and once his or her cash is already available your money could either be paid back as promised or payment postponed. If the former case happens, well and good, but remember there will always be next time until the amount borrowed will gradually increase. If the latter case happens, just pray and be ready for the event that such indebtedness will be forgotten due to its continued postponement of payment. In short, you have not dealt the problem, which is the mismanagement of your brethren, friend or relative's finances, worst you have taught him or her to even get into trouble.
- If it is for purchase of a stuff, you are approving of his or her addiction to indiscriminate shopping. You are allowing him or her to purchase some luxurious items, that without it, he or she could still live. Instead, why not advise him or her the virtues of saving.
- As for the third, you may double check on the claim that the money being borrowed is really for a legitimate need. There are a lot of people who are just making up stories for them just to get what they wanted. Your cash. Granting it is a legitimate need as claimed it to be, then by all means, provide help and not a loan. Make sure that the help you will provide will not strain your budget, no more no less.
You may also remember this quote from William Shakespeare in his literary work Hamlet: "neither a borrower nor a lender be, for loan oft losses both itself and friend."
Tuesday, November 10, 2009
Nobody But YOU
Hmmm...for those who knew the song might have already been singing the tune. I can even sense someone is dancing while singing the tune. What comes to your mind upon reading the title might be the famous danceable song by a Korean girl group, wonder girls.I may have been singing and dancing with this song the last couple of days with my daughters and in front of my wife. However, a deeper meaning of the phrase kept bugging me for the past week.
I have been consistent with my articles on personal finance every week for quite sometime now. It have been a fixture in the daily newsletter of our church, Word International Ministries - Al Ain (WIN-Al Ain). Some online friends had even featured some of my articles in their weblogs. And a number of personal messages I have been receiving are very encouraging to continue on to come up with more articles about personal finance.
My articles, as well as those of the famous authors and bloggers out there are very encouraging. There are even a lot of books and other multi media materials available out there that will fix your financial woes--that will, as they say, reveal the secrets to become rich and being debt free. But, mind you, these are all inutile if these are only read and not taken to heart.
Taking to heart all these materials available means that you should realize that an overhaul of oneself is necessary to make these materials effective.
This piece you are reading right now is especially addressed to those who are deeply in debt. You may have been seeking for somebody whom you could ask for help, in terms of advice or financial help. There are so many people who are willing to help, but their efforts to help will only aggravate your situation if you will not address the real problem, YOU; and not the lack of money.
I may sound so mean here. But, let me pose these questions:
- who caused you to be deeply in debt?
- who used that plastic money called credit card?
- who decided to buy a luxury car instead of an ordinary one that could still serve the same purpose?
- who bought those unecessary and expensive stuffs that is way beyond one's income?
- who went to some place as tourist using credit cards as the means of paying that luxurious vacation and having nothing in your account to payoff the bills after 45 days?
The real source of the problem is your attitude towards money and the way you spend it. Hence, there will be no amount of advice, tips and techniques on how to free from debt to take effect without first dealing your attitude.
If you are in debt right now and badly needs help, be it counseling or financing, or a combination of both, please humble yourself and accept the fact that the real problem is not your debts. Not your neighbor. Not your brethren.
Then who? Nobody, but YOU.
Monday, October 26, 2009
Home, Your Best Training Ground
" Train up a child in the way he should go,
And when he is old he will not depart from it.
The rich rules over the poor,
And the borrower is servant to the lender."
And when he is old he will not depart from it.
The rich rules over the poor,
And the borrower is servant to the lender."
- Proverbs 22: 6-7 -
What a child sees and hears at home may shape his or her character and value system. Ever wonder why we almost always have a family of musicians, such as the Jackson's. In the Philippines we have the Cruz's, Manzanos / Santos and some other famous personalities of the showbiz industry.
It is no different with one handles his or her finances. The reason why the poor gets poorer or the rich gets richer is because the latter seldom speaks of how to properly handle money at home while the latter may have been teaching the proper way in handling the finances.
As keenly observed, most Filipino adults (or this may include all other nationalities) only a handful out of a hundred or maybe a thousand is privileged enough to have been trained by their parents about money, budget, spending and savings. Majority of the adults grew up and come to realized at a later stage of their life that money does not grow on trees, but it is something that one should earn and work for.
Children are often neglected by parents when it comes to discussions on family budget, spending, and savings. How then can you expect them to include their children for they too had been going through the same process.
Another good item that I picked up from the last session of the Financial Peace University is the suggested abolition of the "allowance" given to children. Instead, a commission or compensation is to be given them for every household chores or any activity agreed upon by the whole members of the family.
I see eyebrows raising on this one. You may be thinking that by giving them payouts for every household chores is like teaching them not to do their household obligations without monetary compensation. Of course not.
Aside from being a motivating factor, this monetary commission will teach them that it is how the system works outside of the household. No work no pay. In my own honest opinion, it is very important that a child should learn this principle of no work no pay as it will teach a child the true value of money. Since they work for it, they will also learn how to take care of it not to slip from their hands on unnecessary and useless spending.
What about the allowance? Is it not the parents' obligation to provide for their child's needs. Yes, it is. However, when you just plainly give money as in most parents do while coining it as "allowance" carries with it a negative connotation. The term "allowance" could easily be translated as dole outs or subsidy.
Do you want your child to grow up being dependent on dole outs? Or for the child grow up believing that dole outs from parents are but normal. This is a very severe problem among the Filipinos today, in my honest opinion.
For all the parents out there, take head of what the Lord says in Proverbs 22: 6-7. In verse 6, parents are instructed to teach your child the correct way for in verse 7, a very serious warning is given. Unless a child is trained properly, especially about money, he will surely not be a slave to the lender.
God Bless!!!
Monday, October 19, 2009
The First Baby Step to a Lifetime of Financial Peace Journey
"A journey to a thousand miles starts with a single step." -Lao Tzu-No matter where you aim to go. No matter what endeavor you want to take. Whether it be a journey to a road less traveled, the first single step is necessary for without it you are fixed at where you are at. That is what the Chinese philosopher's message is driving at.
During our second meeting and the first session of the Financial Peace University (FPU), setting aside some money as an emergency fund is being emphasized. It is pointed out that this is not an option, but rather a must in one's journey to financial peace. The suggested target amount to be set aside should cover at least three to four months of living expenses.
In this first session, a lot has been taught that to some is not something new. Most attendees if not all knew all along the value of saving for the rainy day. However, that knowledge remains to be as such and was never put to practice.
Hence, the first baby step one who is aiming for the financial peace is to set aside $1,000 as an emergency fund. Of course the starting amount, or seed money as I would describe it could be lesser if one is earning lesser than the middle income earner. Everyone in our class is advised to do so, otherwise continuing on with the course is a useless undertaking.
Of course this emergency fund should not be touched unless for emergency purposes. What constitute emergency then? Emergency needs are those that arise from any negative financial event happening in your life. You may have been laid off from your employment. A sickness or accident not covered by any insurance protection. Or any event of such type. This fund serves as your protection as it covers you from this untoward incident that is bound to happen in one's life. For as long as your heart beats, the happening of this event is inevitable.
The concept of an emergency fund is even taught in the first book of the Bible. Remember when Joseph was given authority to rule over Egypt, second to pharaoh when he, by the knowledge and wisdom coming from God allowed him to interpret pharaoh's dreams. Everyone is familiar with this story of seven years of harvest and seven years of famine. The principle taught by God in this story of Joseph is to set aside something for the famine that is going to happen. We are simply reminded here that it sun does not shine year in year out. A rainy day will surely come.
Simply put, saving for a rainy day should be a way of life, not to be compromised if you want financial peace.
Not so long ago, in one of my articles I discussed about the danger of credit cards being used during times of emergency. Why should one resort to credit cards? It is because you have nothing set aside for this purpose.
I overheard a discussion of fellow kabayans in a planning session for an outing. One of the hot topics was the date the salary be released. That contribution for the outing should be deferred until the date salary would be credited to the respective bank accounts. This line of discussion led me to conclude that most of these people, if not all are cash challenged for they could not shell out a small contribution for a simple celebration for the birthdays of 3 or 4 people in the group.
Though the incident above is not a sort of an emergency, but the mere fact that most people are cash challenged even few days before the date of salary credit is something of a serious issue. How much more if we ask them if they have some savings set aside?
A personal observation made me believe that most working class citizens are living from paycheck to paycheck. This observation could be wrong, but that is what I perceive personally. You may judge this for yourself.
A final word of encouragement to those who want to take the lifetime journey to financial peace, begin with this baby step. Set aside $1,000 or any amount as your first baby step. From then on, make it a habit to set aside every payday a forced savings to this account until you amassed so much that may already cover three to six months of your living expeses.
This is just the first step. Keep coming back for future articles and other steps as I progress with my FPU class.
God bless everyone.
Monday, October 12, 2009
Church's Role in a Believer's Financial Victory
"In those days there was no king in Israel; every man did what was right in his own eyes." (Judges 21:25)
Take note that the above verse did not say that every man did what was wrong in his own eyes." These people, the Israelites did not intentionally try to do wrong. In fact, in this stage of the history of Israel these people were very determined to do right, but they were trying to do what was right in their own eyes. The things they see around and among them led them to do foolish things.
The above verse is also the last statement of the book of Judges. From beginning of the book until this last verse a pattern of defeat and victory goes on and on in full circles. The main culprit for this is that this generation has failed to destroy all there enemies, as God has commanded.
Same thing could happen to you and me. In whatever aspect of our lives, if we will not totally destroy those enemies--bad habits, beliefs, and/or cultural or social practices--and believe that God should take full control, chances are you will be like these people mentioned in the book of Judges.
Let me zoom in to the area of our life called finances or stewardship. If you have not set aside the world's view as regards loans, credit cards, and the way you spend your money, chances are you are still living from paycheck to paycheck. Money is controlling you instead of God being in control.
Romans 12:2 states that "Do not be conformed to this world, but be transformed by the renewal of your mind, that by testing you may discern what is the will of God, what is good and acceptable and perfect." I therefore urge everyone to set aside any worldly advise in regards money matters.
Churches on the other hand should arise and start teaching their congregation about stewardship and personal finance. I have learned from the Financial Peace University that according to survey an approximate 15% of the churches are teaching their congregation about personal finance. God spoke about stewardship more than a couple of thousand times. While Jesus parables and teachings greatly deals about money and stewardship.
To the leaders of every Christian churches, it is but time for us to defeat and crush to obsolescence the world's notion about money and personal finance. Let us not teach about tithing only for it is but 10% of our income. Let us not forget to teach the congregation of how to handle and take control of that 90%.
Thank God for raising people like Dave Ramsey, Dayton Howard, Chinkee Tan, Randell Tiongson, and other Christians who advocates the proper way to handle our finances, God's way, as oppose to the way in the eyes of man. For the eyes of man are focused to what were seen in the world.
Thank God also that our church Word International Ministries in Al Ain City is teaching the congregation about stewardship and personal finance.
Final word for those who stumble upon this article. Just be content. Spend within your means. Save. Take counsel from the Word through your daily devotion.
God bless everyone!!!
Thursday, October 8, 2009
FPU
FPU stands for Financial Peace University. Dave Ramsey famous author and founder of the FPU.
Thanks God for bringing this to Al Ain, through the initiatives of our brethren from the English Evangelical Church. Thanks to Pastor Steve for providing the Word International Ministries - Al Ain a slot, actually increased to two for one from their church backed out the last minute.
It started last Wednesday, October 7, 2009 and will continue on the next 12 weeks. We started with the introduction of the course and the various modules. Of course the kit, which also serves as a ticket to a lifetime membership to the FPU where one can access all the resources in their website: http://www.daveramsey.com/fpu/home.
I am so blessed to have been given the chance to take the slot for our Church. The second slot that was made vacant will be filled in by our Senior Pastor.
I received this kit during the first meeting last Wednesday:
Here are the contents of the kit:
Thank you Lord for this opportunity to expand my knowledge with this training.
Thanks God for bringing this to Al Ain, through the initiatives of our brethren from the English Evangelical Church. Thanks to Pastor Steve for providing the Word International Ministries - Al Ain a slot, actually increased to two for one from their church backed out the last minute.
It started last Wednesday, October 7, 2009 and will continue on the next 12 weeks. We started with the introduction of the course and the various modules. Of course the kit, which also serves as a ticket to a lifetime membership to the FPU where one can access all the resources in their website: http://www.daveramsey.com/fpu/home.
I am so blessed to have been given the chance to take the slot for our Church. The second slot that was made vacant will be filled in by our Senior Pastor.
I received this kit during the first meeting last Wednesday:
Here are the contents of the kit:Thank you Lord for this opportunity to expand my knowledge with this training.
Sunday, October 4, 2009
Natural and Financial Calamities
Typhoon. Flood. Earthquake. Tsunami. These are but some of the famous items in the news since the last week of September 2009. These are natural calamities.
Environmentalists say that this is the effect of global warming, or the result of man's wanton disregard to mother nature. Hence, these things are inevitable unless concerted efforts to take care of our planet is being implemented.
The Bible has foretold that these sort of things are bound to happen. This is what is commonly called the signs of the end times. The inevitable coming of back of Jesus. Yes, these calamities had happened long ago, but if you come to think of the frequency of the happening of one calamity over the other has become closer compared to decades or centuries ago.
In as much as these natural calamities are being foretold in the Bible, this Holy Book that I personally believe as the Word of God has also foretold of what will happen to a man should you not obey it. Obedience in all its teachings, including the wise and practical handling of the resources that God entrusted you and me.
The Bible is so rich in practical lessons on how you and I would steward the resources that God entrusted us. The Bible says that if you just obey you will not borrow, but instead you will lend. On the other hand, disobedience will result in you borrowing and going lower and lower in status. Obedience results to financial independence and disobedience results to bondage to debts. (Deuteronomy 28: 1-2, 12, 15, & 43-56)
Stewardship is the name of the game that God wants you and me to play perfectly well. The misconception of the many lies in the fact that God requires us to give the tithes (10%) of what we are earning. If we are faithful to do this, the windows of heaven will rain blessings on us that we can hardly contain.
Nevertheless, it has been observed that there were a number of faithful givers who are still struggling with their finances. I am not surprised by this fact, it has also been observed that as they are faithful with the 10%, they may have been spending in reckless abandon the remaining 90% of their income. Now which one has the bigger share of the pie of the resources God has entrusted us?
Does not God also commanded us to be content? As Paul wrote in his pastoral letter to Timothy (1 Tim 6:6) that godliness with contentment is great gain. In so many passages in the Bible, God has warned us of spending too much and incurring useless indebtedness.
A stern warning: upon learning that the flood of maturing bills has started to rise to knee deep and that the rain of your spending still continues to pour down on you, please go to higher grounds. Seek counsel before God and a financial counselor, be humble, and start to heed God's word before the waters will reach to your neck and its current could wash you away from your spiritual freedom.
God bless everyone!!!
Environmentalists say that this is the effect of global warming, or the result of man's wanton disregard to mother nature. Hence, these things are inevitable unless concerted efforts to take care of our planet is being implemented.
The Bible has foretold that these sort of things are bound to happen. This is what is commonly called the signs of the end times. The inevitable coming of back of Jesus. Yes, these calamities had happened long ago, but if you come to think of the frequency of the happening of one calamity over the other has become closer compared to decades or centuries ago.
In as much as these natural calamities are being foretold in the Bible, this Holy Book that I personally believe as the Word of God has also foretold of what will happen to a man should you not obey it. Obedience in all its teachings, including the wise and practical handling of the resources that God entrusted you and me.
The Bible is so rich in practical lessons on how you and I would steward the resources that God entrusted us. The Bible says that if you just obey you will not borrow, but instead you will lend. On the other hand, disobedience will result in you borrowing and going lower and lower in status. Obedience results to financial independence and disobedience results to bondage to debts. (Deuteronomy 28: 1-2, 12, 15, & 43-56)
Stewardship is the name of the game that God wants you and me to play perfectly well. The misconception of the many lies in the fact that God requires us to give the tithes (10%) of what we are earning. If we are faithful to do this, the windows of heaven will rain blessings on us that we can hardly contain.
Nevertheless, it has been observed that there were a number of faithful givers who are still struggling with their finances. I am not surprised by this fact, it has also been observed that as they are faithful with the 10%, they may have been spending in reckless abandon the remaining 90% of their income. Now which one has the bigger share of the pie of the resources God has entrusted us?
Does not God also commanded us to be content? As Paul wrote in his pastoral letter to Timothy (1 Tim 6:6) that godliness with contentment is great gain. In so many passages in the Bible, God has warned us of spending too much and incurring useless indebtedness.
A stern warning: upon learning that the flood of maturing bills has started to rise to knee deep and that the rain of your spending still continues to pour down on you, please go to higher grounds. Seek counsel before God and a financial counselor, be humble, and start to heed God's word before the waters will reach to your neck and its current could wash you away from your spiritual freedom.
God bless everyone!!!
Monday, September 21, 2009
Caution!!! Debt is Looming Ahead...
God's perfect plan for His people is to be debt-free. As we are serving a jealous God, He only wants His people to serve nothing else except Him only. For how can one serve only Him if one is in shackle of indebtedness.When a Christian confess with their mouth, and believing in their heart Jesus Christ as their personal Lord and Savior, it is tantamount to accepting God's offer of our redemption from the slavery to sin. In effect, the ownership of a Christian's life has changed hands from the prince of darkness and sin to God. As a new master, the slave is ought to serve Him alone.
Jesus even warned us sternly when He says that we can not serve both God and mammon. For how can you spiritually worship the master and sovereign God if you are financially in trouble with indebtedness.
Nevertheless, God is not short of giving us reminders of the dangers of debts. He provided us a number of practical principles and guides, through the Bible on how and why indebtedness is dangerous.
In this article, I am herewith giving three, as I call it the 3S. Here the are:
1. Speculates the future (Prov. 27:1)
2. Synthetic Decision (Prov. 21:5)
3. Stops God's will (wisdom and power) to work (2 Chron 16:9)
When one entered into a loan agreement, one commits himself to payments over a period of time, hence presuming that nothing untoward will happen such as loss employment and other unexpected expenses. Prov. 27:1 sternly warns us not to boast of the future for no one knows what tomorrow may bring.
A lot of expatriates in the UAE having hundreds of Dirhams of indebtedness got into trouble with banks and financial institutions because of termination from employment.
Secondly, synthetic rather than real life decisions are being made because of borrowing. This applies to installment purchases of an item. Because borrowing, one may decide to purchase based on whether he could afford the monthly installment rather than the total cost of such an item. Entering into a debt transaction makes it easy to say yes to low monthly installment s while ignoring the real cost of the item.
And lastly, debt could stop wisdom and power of God working in us. One may earnestly pray for some material blessing, but could not wait God to answer the prayers. Does not God taught us that patience is one of the virtues a Christian must posses? Resorting to debt in acquiring the item prayed for is like taking in advance the answer to your prayer, when you are not sure as yet as to how God will answer your prayer.
Presented herein are only 3 of those numerous teachings of the Bible in regards handling our finances and the dangers of debt. Read your Bible, take heed of its teachings, be obedient. For He who is obedient will not borrow, but will lend. He will be the head and not the tail, as the God promised.
Monday, September 14, 2009
Of Pyramids and Debt Note
A pyramid is a famous structure. When you think of pyramids you think of Egypt. Nevertheless, the pyramid that will be spoken of here will not be the physical structure, rather a concept that is also commonly known as the Ponzi scheme.
Ponzi, an Italian collects money from one person with an assurance of returning the same plus a profit or interest. But before it matures, he will collect from another person or persons for the same agreement. And as the previous batch or investment that was first collected matures, the new collections will be used to pay for this maturing investment. The same scheme goes on and on until the scheme will be uncovered as a scam.
This scheme is famously known as a pyramiding scheme.
Same thing is true with indebtedness. Have you known someone who borrows to pay off maturing obligations? And this same activity will be repeated month after month, week after week, day after day, until that person will come to realize that he is now in serious trouble. This is loan pyramiding.
When you know of somebody, hope it is not you, you are like signing your name to a "Debt Note."
A "Debt Note" that is derived from one Japanese anime movie I come to know a few years back entitled "Death Note." This death note, according to the movie is a book of the god of death that was lost and landed on the hand of a mortal. This mortal later on discovered that you whoever you write on the book and the form of death that person has to die, it will happen. If the mode of death is left blank, the name of that person written on the death note will die a heart attack.
If you one is not careful about their finances. If one spends more than he earns. If one is borrowing indiscriminately, without any regard of his capacity to repay, which later on lead to loan pyramiding. This person is likened to the mortal holding that book called the death note (this time it is aptly called the "Debt Note") writing his own name in it. The mode of death written is suffocation of debts.
Be wise with your finances. Be content. Be prayerful. Keep your self afloat by keeping yourself under the care of one true living God, Jesus Christ, our ultimate lifeguard.
God bless.
Of Pyramids and Debt Note
A pyramid is a famous structure. When you think of pyramids you think of Egypt. Nevertheless, the pyramid that will be spoken of here will not be the physical structure, rather a concept that is also commonly known as the Ponzi scheme.
Ponzi, an Italian collects money from one person with an assurance of returning the same plus a profit or interest. But before it matures, he will collect from another person or persons for the same agreement. And as the previous batch or investment that was first collected matures, the new collections will be used to pay for this maturing investment. The same scheme goes on and on until the scheme will be uncovered as a scam.
This scheme is famously known as a pyramiding scheme.
Same thing is true with indebtedness. Have you known someone who borrows to pay off maturing obligations? And this same activity will be repeated month after month, week after week, day after day, until that person will come to realize that he is now in serious trouble. This is loan pyramiding.
When you know of somebody, hope it is not you, you are like signing your name to a "Debt Note."
A "Debt Note" that is derived from one Japanese anime movie I come to know a few years back entitled "Death Note." This death note, according to the movie is a book of the god of death that was lost and landed on the hand of a mortal. This mortal later on discovered that you whoever you write on the book and the form of death that person has to die, it will happen. If the mode of death is left blank, the name of that person written on the death note will die a heart attack.
If you one is not careful about their finances. If one spends more than he earns. If one is borrowing indiscriminately, without any regard of his capacity to repay, which later on lead to loan pyramiding. This person is likened to the mortal holding that book called the death note (this time it is aptly called the "Debt Note") writing his own name in it. The mode of death written is suffocation of debts.
Be wise with your finances. Be content. Be prayerful. Keep your self afloat by keeping yourself under the care of one true living God, Jesus Christ, our ultimate lifeguard.
God bless.
Monday, September 7, 2009
The Word Over the World
"I can't get no, satisfaction..." goes the famous line of one of those songs popularized by the Rolling Stones. A man's natural self, that is in contact closest to this materialistic world of consumerism is in reality singing this tune every now and then.
This materialistic world is in fact playing this tune anytime of day, anywhere you may go. Television, radio, newspaper, streets, public transport or even the public toilets are being used to sell products, mostly consumer products. Every type of advertisements and promotions are audible and visible anywhere and anytime 24/7.
Consumerism is what the world is promoting. "Feel good" over the utility of a product or service is being emphasized. That is why one may wonder why a sexy model is standing beside a vehicle being advertised. Have you noticed that vehicles are being marketed based on the latest features, which may not be that important, rather than the durability, build, and economical consumption of fuel.
Having said all those aforementioned facts, everyone should be warned of this trap. The web of consumerism can trap anyone into indebtedness as a result of overspending. Buying things beyond their capacity, where not having these things he or she could still live life happily and contented.
Overcome these natural craving by heeding the Word of God, instead of what the world has to say. The Bible is full of practical principles applicable to how you manage your finances. Take heed of God's word and you will never go wrong.
The world is full of deception, but the Word is truth. Do not be deceived by reading by saturating yourself with the Word of God.
This materialistic world is in fact playing this tune anytime of day, anywhere you may go. Television, radio, newspaper, streets, public transport or even the public toilets are being used to sell products, mostly consumer products. Every type of advertisements and promotions are audible and visible anywhere and anytime 24/7.
Consumerism is what the world is promoting. "Feel good" over the utility of a product or service is being emphasized. That is why one may wonder why a sexy model is standing beside a vehicle being advertised. Have you noticed that vehicles are being marketed based on the latest features, which may not be that important, rather than the durability, build, and economical consumption of fuel.
Having said all those aforementioned facts, everyone should be warned of this trap. The web of consumerism can trap anyone into indebtedness as a result of overspending. Buying things beyond their capacity, where not having these things he or she could still live life happily and contented.
Overcome these natural craving by heeding the Word of God, instead of what the world has to say. The Bible is full of practical principles applicable to how you manage your finances. Take heed of God's word and you will never go wrong.
The world is full of deception, but the Word is truth. Do not be deceived by reading by saturating yourself with the Word of God.
Sunday, August 30, 2009
Dream House Turned into a Nightmare
Are we not dreaming of acquiring a house of our own? Not just an ordinary house, but a house that stands out in your hometown. Or one that is situated in a posh subdivision, complete with modern facilities.
I believe that every Overseas Filipino Worker (OFW) is putting this as one of the priorities in their bucket list. There are a number of reasons why is this so. Few of them follows:
The first four reasons are valid motivators. However, have you asked yourself if you could afford with how much you are currently earning? Have you reviewed all items on your spending?
This is what happened some few years back, when the economic climate was still a sunny day. Banks in the United Arab Emirates (UAE) were offering loans 20 to 35 times ones salary. Obviously, the banks are lending to all salaried expatriates in this part of the world more than they could afford to pay. And a lot of fellow Filipinos borrowed from through these offers in order to acquire a multi-million real estate.
Even before the gloomy economic situation progressed to what it is now, some of them were terminated from work. The logical thing that happened next is that they were not able to pay off their loan. Their multi-million dream house just disappears like a bubble, that they were not even had the chance to enjoy it.
How then could they enjoy the appreciating value of their investment, or a decent house when they retire if they could no longer maintain it?
Truly, nothing is permanent or secure that this world offers. The ultimate priceless investments are those that will be enjoyed in eternity.
I personally knew at least five fellow Filipinos who are victims of this dream houses, yet turned out to become their most dreaded nightmare. Month after month, they are always on the look of sources for paying their increasing debts.
In order to avoid falling into this trap, you may find these simple practical tips useful:
Lastly, there are a lot of professional financial planners whom you can ask help. Also, books that you can learn some practical tips are very much available. The Holy Bible contains every practical tip one should need, so seek from its pages regularly.
I believe that every Overseas Filipino Worker (OFW) is putting this as one of the priorities in their bucket list. There are a number of reasons why is this so. Few of them follows:
- A house is a good investment. Its value will never decline, but always on the rise.
- That the fruit of their labor abroad will not be spent on something else, but on a worthy investment, their dream house.
- So that their family will somehow experience a more decent dwelling place than what they were used to.
- As and when they retire and go back home, they have a place to spend their retirement life in their hometown.
- To show off their success in working abroad. Having a nice house is a concrete evidence to the whole town of how successful they are in their field of work outside their country.
The first four reasons are valid motivators. However, have you asked yourself if you could afford with how much you are currently earning? Have you reviewed all items on your spending?
This is what happened some few years back, when the economic climate was still a sunny day. Banks in the United Arab Emirates (UAE) were offering loans 20 to 35 times ones salary. Obviously, the banks are lending to all salaried expatriates in this part of the world more than they could afford to pay. And a lot of fellow Filipinos borrowed from through these offers in order to acquire a multi-million real estate.
Even before the gloomy economic situation progressed to what it is now, some of them were terminated from work. The logical thing that happened next is that they were not able to pay off their loan. Their multi-million dream house just disappears like a bubble, that they were not even had the chance to enjoy it.
How then could they enjoy the appreciating value of their investment, or a decent house when they retire if they could no longer maintain it?
Truly, nothing is permanent or secure that this world offers. The ultimate priceless investments are those that will be enjoyed in eternity.
I personally knew at least five fellow Filipinos who are victims of this dream houses, yet turned out to become their most dreaded nightmare. Month after month, they are always on the look of sources for paying their increasing debts.
In order to avoid falling into this trap, you may find these simple practical tips useful:
- Do not acquire that dream house impulsively. Think it over and over. Plan. Pray for guidance. How will you enjoy it when you or your family are staying abroad. How long will you enjoy it every year. If your child or some family members are in the Philppines, why not acquire at least a three-door apartment, your family stays on the first door, while you rent out the other two.
- Save up under your dream house account rather than resorting to bank loans. Saving up while waiting for the proper time when you are ready to retire or some of the members of your family is returning home for good is the best alternative than incurring loans and paying its cost. Buying your dream house while no one is residing, the faster mother nature will take its toll, hence you will be paying higher maintenance cost.
- What you may have saved up, after having accumulated enough of it, might be used to invest in some high yielding assets. Or you may venture into a business. In this way, these assets you have invested in may be the one to purchase your dream house.
Lastly, there are a lot of professional financial planners whom you can ask help. Also, books that you can learn some practical tips are very much available. The Holy Bible contains every practical tip one should need, so seek from its pages regularly.
Monday, August 24, 2009
Cost of Ignorance
Nine out of 10 people that I know as of late do not exactly know how interest and other financial charges of credit cards are computed. How and to what extent these charges will eat them alive by taking the bait of paying the minimum amount.
There is a legal maxim which states that "ignorance of the law excuses no one." This maxim holds true to these rules that are made and implemented by banks or financial institutions issuing the plastic money called credit cards.
Majority of these ignorant holders of this plastic money, especially the defaulters always complain of hidden charges. Are there really hidden charges? I do not think so. You may just refer these as hidden as these were not elaborately explain, in case there was an explanation by the credit card agent. All they present are the supposed benefits and convenience they have to offer.
But, truth is all the finance charges and the mode of computing interest are all written on the application form, the package that goes with the credit card, and on the statement of accounts. They are just there, but we consumers failed to read them. Agents do not discuss this elaborately either, for more reasons than one.
For the sake of the readers of this article, here are some of the salient information regarding the interest and other finance charges that goes with your credit cards, especially when you are paying only the minimum amount.
If you can not keep up the payment of the full amount due to your credit card bills, it is advisable to stop using this plastic money. If you do not want to be eaten alive by the onerous interest and charges, think twice on continuing with a lifestyle dependent on that plastic cards.
There is a legal maxim which states that "ignorance of the law excuses no one." This maxim holds true to these rules that are made and implemented by banks or financial institutions issuing the plastic money called credit cards.
Majority of these ignorant holders of this plastic money, especially the defaulters always complain of hidden charges. Are there really hidden charges? I do not think so. You may just refer these as hidden as these were not elaborately explain, in case there was an explanation by the credit card agent. All they present are the supposed benefits and convenience they have to offer.
But, truth is all the finance charges and the mode of computing interest are all written on the application form, the package that goes with the credit card, and on the statement of accounts. They are just there, but we consumers failed to read them. Agents do not discuss this elaborately either, for more reasons than one.
For the sake of the readers of this article, here are some of the salient information regarding the interest and other finance charges that goes with your credit cards, especially when you are paying only the minimum amount.
- Interest rate charged is from 2% to 3% per month. As long as you are not paying the full amount due, interest will be compounded monthly. To illustrate, suppose you have an outstanding balance of $1000, but you pay only the minimum of say $100, you will be charged interest based on the $1000. The following month, if you are doing the same pattern of paying the minimum, and suppose your balance increased to $1200 after interest and usage of your card, the interest will be computed based on the $1200 balance. It will go on and on until you pay off your balance.
- There is also what you call as over the limit charge, usually a fixed amount. This amount will be charged once your bill exceeds the maximum limit of your credit card. How could that be? It may happen if by continues interest charges are being piled up, chances are the billed amount will exceed the limit. Mind you, this fixed amount will be added to your balance, and again computed with the interest.
- Another charge is called late payment charged, also a fixed amount pegged by the financial institution. As the name suggest, if the cardholder failed to pay on or before the maturity date as indicated in the statement of account a fixed amount is charged as penalty. Even a day late, the amount is charged. Again, if full balance and this late payment charge is not paid, interest will be computed on the full balance including all interest and other charges.
If you can not keep up the payment of the full amount due to your credit card bills, it is advisable to stop using this plastic money. If you do not want to be eaten alive by the onerous interest and charges, think twice on continuing with a lifestyle dependent on that plastic cards.
Saturday, August 15, 2009
"For Emergency Use"
Ever heard of this phrase: "for emergency use"?
No, I am not referring to that red signage posted on building walls and in most cases situated beside a fire extinguisher. Let me help you refresh your memories. We always hear this phrase uttered by some friends, acquaintances, relative, or even yourself. Can you now relate on somebody relies on their credit cards as emergency funds?
In some instances this beautiful phrase is also used as a sales pitch by an agent offering credit cards. Just like a couple of weeks ago, an agent of one of the international banks here in the UAE called me up and informed me that I am privileged enough to have a pre-approved credit card. As I declined the offer, he uttered this sweet phrase and further added that nothing will be lost with me and everything is to my advantage. I countered him by asking: (a) what type of emergency are you referring to?; (b) why and how in the world could a credit card be the best source for emergency funds?; and (c) cite a real life scenario where a person who is in an emergency situation is being saved by his credit card.
Having failed to satisfy my rebuttal questions, he rested his case. That sales pitch did not produce any sales at all.
For those cardholders who believe that their credit card(s) are a great help in times of emergency situations, I am warning you, that you are in a very dangerous situation. You are no different from a suicide bomber. You are in the belief that what you are carrying is for a noble cause, not counting that your life is more precious than that alleged noble cause. No matter how noble you may think it seems, you will still be killed alive by the usurious interests and charges associated with your credit card, especially when you are paying the minimum amount due.
Reliance on the credit card as an emergency fund is a serious mistake. There really is no substitute for setting aside some actual emergency funds out of your income--be it from slary or from any other source--to answer any emergency needs one might have in the future.
How to do this? You may avail the services of a professional or you can do it your own. You can purchase an insurance or any other instrument from reputable insurance companies or do some self-insurance, by setting aside funds just for emergency purposes. Either way is incomparable to reliance on credit cards.
N.B. after having received an overwhelming response from my personal contacts and some visitors of this site with thier comments and pm's sent, i am encouraged to write a personal finance article on a weekly basis, instead of the planned fortnightly publication. i will try my best to publish this one weekly (every sunday or monday of the week.) personal thanks to Randel, one of my online buddies, whose blog also inspired me and my WIN - Al Ain family for the support. If you find my personal finance articles useful, please share this to your friends or let them visit this site regularly. God bless.
Wednesday, August 12, 2009
On Credit Card Debts
A couple of months or so, I personally know of several people arrested by police due to unpaid credit card debts. And several more people who are in danger of having arrested if they still fail to pay the skyrocketing arrears on their credit card debts.
By the way, in this part of the world, the UAE (United Arab Emirates), non payment of your debt is a crime, not just a simple civil case. You could be imprisoned for non payment of your debt.
Banks are resorting to aggressive measures as a result of this depressed economic situations. For during those heydays several years back, they were reaping huge profits from the consuming public, who happens to be you and me.
The credit card system can be likened to a one-on-one game. A game played by the financial institution issuing the credit card and the credit card holder. All rules of the game is obviously created by the issuing institution. Majority of these rules (take note, I said majority and not everything) are to their advantage. The cardholder then is left with a minute part of the set of rules that are to his advantage.
Does it mean that credit card is bad? No it is not. But, incurring credit card debts is. If you just know the rules that are to your advantage, you can avoid credit card debts. And if you are trapped by the rules set to the advantage of the credit card issuer, then you are in big trouble.
You may incur credit card debts if and when: (a) you purchase on installment using your credit card; (b) you pay less than the total amount due reflected on your bill as it matures; or (c) a combination of (a) and (b).
The obvious solutions not to incur credit card debt are: (a) spend within your means; (b) pay the full amount reflected on your credit card bill before it matures; and (c) do not acquire one, if you do not have any.
Now, if credit card is not bad after all, so what good does it give you?
p.s. this will be the first in a series of articles that i may write about personal finance. i hope and pray that i could produce an article about personal finance every other week. so if this article is helpful in anyway to you, my contacts, pls feel free to write your comments, suggestions, or any reactions.
Thursday, August 6, 2009
What Went Wrong?
The photo was said to be published in one of the local dailies in the Philippines. It is said to be taken during that burial day of former President Cory Aquino.Note the caption under the picture, especially the red underline. I was thinking about how did this oversight took place. I could hardly figure out how this vital information could be missed out by the team of this national daily?
Was this mistake brought about by the fact that all the people behind this national daily is so greatly affected by the loss of Cory? Or, was this a reflection of how greatly dismayed the people of this national daily to the incumbent president?
Judge for yourself.
Tuesday, June 23, 2009
10...9...8...7...6...5...4...3...2...1...
Kaboom...HAPPY BIRTHDAY!!!
I was just reminiscing those times when two of our brothers from WIN Al Ain church were given surprise parties with their respective spouses. I was there. I witness how surprised they really were.
Nope, I am not yearning for one. I am not fond of surprises, nor is my wife fond of giving one. But, I am not saying that we are against it. Fact is, we just want to be witnesses of this game of surprises.
In a couple of hours, I turn another year. What lies ahead? So I think of the next year of my existence of this world.
I am so excited, actually. As I turn older each day, I truly want a life full of meaning. I want to devote the rest of my life to get closer to my Lord and Savior, Jesus Christ.
Most importantly, after having hear the father's day message of Pastor Fiji John of WIN Abu Dhabi, I want to be the best father of the best gifts God has given me. Here they are...
Sophia...
Katryna...
Adrianna
I was just reminiscing those times when two of our brothers from WIN Al Ain church were given surprise parties with their respective spouses. I was there. I witness how surprised they really were.
Nope, I am not yearning for one. I am not fond of surprises, nor is my wife fond of giving one. But, I am not saying that we are against it. Fact is, we just want to be witnesses of this game of surprises.
In a couple of hours, I turn another year. What lies ahead? So I think of the next year of my existence of this world.
I am so excited, actually. As I turn older each day, I truly want a life full of meaning. I want to devote the rest of my life to get closer to my Lord and Savior, Jesus Christ.
Most importantly, after having hear the father's day message of Pastor Fiji John of WIN Abu Dhabi, I want to be the best father of the best gifts God has given me. Here they are...
Sophia...
Katryna...
AdriannaMonday, June 1, 2009
Next Chapter
It is June 1st. Give it another 30 days and we will be stepping on the second half of the year. But, before that happens, somewhere in between I will be turning to another chapter of my life. I will turn a year older.
See how time flies. I felt like I just graduated from high school as I chance upon my graduation photo.
Hahaha. So innocent, yet behind the looks a lot of experiences and memories from that high school life could be culled upon. A ton of stories I related to my daughters while browsing all the photos of the rest of my batchmates. Some were good ones, but most of the notorious ones were the ones that could be easily remembered.
Though physical birth is something to celebrate, but I am not that kind of person who usually does. Not that I hate to have been born in this wicked world, but I just want to have this day as private as possible, eversince I could remember. So friends, do not expect a treat from me...hehehe.
Anyways, just want to be the first to greet my self a very happy birthday to me. Thank God for another year. Thank you Jesus for that relationship I had with you. I will surely beat my self with lots of work and desciplining in order to keep this relationship the rest of my physical life here, having in mind the eternal promise you had given to all that believed in you.
God bless.
See how time flies. I felt like I just graduated from high school as I chance upon my graduation photo.
Hahaha. So innocent, yet behind the looks a lot of experiences and memories from that high school life could be culled upon. A ton of stories I related to my daughters while browsing all the photos of the rest of my batchmates. Some were good ones, but most of the notorious ones were the ones that could be easily remembered.Though physical birth is something to celebrate, but I am not that kind of person who usually does. Not that I hate to have been born in this wicked world, but I just want to have this day as private as possible, eversince I could remember. So friends, do not expect a treat from me...hehehe.
Anyways, just want to be the first to greet my self a very happy birthday to me. Thank God for another year. Thank you Jesus for that relationship I had with you. I will surely beat my self with lots of work and desciplining in order to keep this relationship the rest of my physical life here, having in mind the eternal promise you had given to all that believed in you.
God bless.
Wednesday, April 22, 2009
3.5 KM in 15 Mins
Started to run once again after 3 months and a few pounds and at least an inch gained. My last run was early January 2009.
Reaching Al Ain early, took a rest at the master's bedroom while my kids and the rest of the Youth members of our church are practicing their special number for this Friday's celebration of their first anniversary. After filling my stomach with a piece of banana and a glass of water, I then prepared myself for the long planned resumption to jog at my favorite Al Wadi park.
Plan was to run for 20 minutes as a starter and adding 10 on the succeeding runs til reaching 60 minutes. Weather was good. It was neither hot nor cold. There was a wind, but so refreshing as it touches my face while running.
Five minutes gone by and had gone a round of running around the approximately a thousand meter running oval at the aforesaid park. 10 minutes later and more than a couple of rounds of running, still breathing was normal. A couple of minutes later, I started to feel some tightening of my legs and ankle area.
Fifteen minutes was registered on my watch and I stopped. I had ran at least three and a half rounds of the oval.
I stopped because of the pain felt on my legs and ankle. The pain I felt is the language our body use to communicate to us that by going further you risk of getting injured. Ok, I understand what my body wants to communicate so I stopped and cooled down by streching.
Oh my. I really gained some poundage and inch. Though my air supply seems to sustain me even further to 30 minutes as estimate, but my lower limb is not capable of sustaining my body weight.
It is now time to monitor the quantity and quality of my food intake. Moreover, at least twice a week of running at the park would be of great help.
Hope to have shared something that is worthwhile. God bless everyone.
Reaching Al Ain early, took a rest at the master's bedroom while my kids and the rest of the Youth members of our church are practicing their special number for this Friday's celebration of their first anniversary. After filling my stomach with a piece of banana and a glass of water, I then prepared myself for the long planned resumption to jog at my favorite Al Wadi park.
Plan was to run for 20 minutes as a starter and adding 10 on the succeeding runs til reaching 60 minutes. Weather was good. It was neither hot nor cold. There was a wind, but so refreshing as it touches my face while running.
Five minutes gone by and had gone a round of running around the approximately a thousand meter running oval at the aforesaid park. 10 minutes later and more than a couple of rounds of running, still breathing was normal. A couple of minutes later, I started to feel some tightening of my legs and ankle area.
Fifteen minutes was registered on my watch and I stopped. I had ran at least three and a half rounds of the oval.
I stopped because of the pain felt on my legs and ankle. The pain I felt is the language our body use to communicate to us that by going further you risk of getting injured. Ok, I understand what my body wants to communicate so I stopped and cooled down by streching.
Oh my. I really gained some poundage and inch. Though my air supply seems to sustain me even further to 30 minutes as estimate, but my lower limb is not capable of sustaining my body weight.
It is now time to monitor the quantity and quality of my food intake. Moreover, at least twice a week of running at the park would be of great help.
Hope to have shared something that is worthwhile. God bless everyone.
Sunday, April 12, 2009
Just to Be with My Kids
One of the best times of my life would be in the company of my "tres Marias." Just to spend that precious moment with them feels like heaven to me. Seeing their smiles, their laughter, their giggles, and all the faces made when all of us joked around.
On or about 8:15 in the evening of April 11, 2009, we started off from our villa in Al Ain and off to the new mall of the city, the Bawadi Mall. 15 minutes later, we were there. My eldest, Sophia was so happy for it was her first time to visit the mall, but not for her sisters and me.
Stepping in at the entrance, an F1 race car was on display. As we approach, we learned that in a few minutes, the display and free photo taking will be ending; 9:00pm to be exact. In fact the security stationed there asked us if we want to pose before the race car and take a souvenir shot. Who would say no to that question?
Without any delay, I took my camera out of the bag, and yes we were allowed as the last persons to pose before the display. Thank you Mr. security.
A blessed EASTER to all!!!
On or about 8:15 in the evening of April 11, 2009, we started off from our villa in Al Ain and off to the new mall of the city, the Bawadi Mall. 15 minutes later, we were there. My eldest, Sophia was so happy for it was her first time to visit the mall, but not for her sisters and me.
Stepping in at the entrance, an F1 race car was on display. As we approach, we learned that in a few minutes, the display and free photo taking will be ending; 9:00pm to be exact. In fact the security stationed there asked us if we want to pose before the race car and take a souvenir shot. Who would say no to that question?
Without any delay, I took my camera out of the bag, and yes we were allowed as the last persons to pose before the display. Thank you Mr. security.
A blessed EASTER to all!!!
Thursday, April 2, 2009
My One and Only Baby Turns 8
Nope. She is not an only child. She is one of the three daughters my wife and I are blessed with. Just in case you do not know and/or confused by the title.
The title suggest that she is now the only baby in the family. We consider her to be so as her two elder sisters are now slowly becoming a lady. They have grown so fast and radiating their beauty day after day.
Same goes with Annia, my only baby right now. As she turns eight today, I am now pondering how many years left for my wife and I enjoy her being our baby. Two, Three, or Four years. We will never know.
What we just know of, is that we are enjoying each day seeing our kids grow up. Especially when we come to accept Jesus as our Lord and Savior, we just did not stop thanking God for entrusting us our three daughters. With her guiding hand, as our ultimate Father, they grew up with fear and knowledge of Him.
I would also like to thank the Lord for bringing into our lives special people whom He made instruments in our coming to have this personal relationship with the Lord Jesus. I would not mention names for all of you know who you are, and the God will reward what is due you.
God bless everyone. And for my last shout to the whole world...HAPPY BIRTHDAY ANNIA!!! (real name is Adrianna Renee S. Cabahug)
p.s. this is my first blog entry for 2009. it has been so long since i have made a blog. i just got busy with other stuff, but starting today, i will see to it that i will upload a blog entry at least once a week. i also miss writing.
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