I’m not a financial guru, but through the years I’ve learned a few personal finance tricks, that I’m sharing below.
The first step is to secure a stable source of income. Apply for a high-paying regular job, don’t settle for anything less.
People spend a lot of their time on the web, but most are not aware of the potential earnings that can be had. Stop wasting time and make money by sharing your opinion in paid online surveys. Having said that, do be careful of scams as there are lots of them. See some of the most reliable websites below.
Survey Savvy is an association of Luth Research which is a large market research company. Rewards range from $1 up to $15 for each survey. The least amount for redemption is just $1. But, it is delivered to you as a check, and processing may take 4-6 weeks.
What makes the service unique is the SavvyConnect desktop and mobile applications. Use it to expedite your payment requests and receive more paid research opportunities and invitations. Plus, you get an extra $5 per month!
The caveat, however, might make you have second thoughts. The software and its browser add-ons collect data about web behaviors and browsing activities on the connected devices. If you’re concerned with privacy, better read the FAQ before participating in the program. Take note, this is only available in the US.
Rakuten has their own survey arm called Insight. Each submitted survey earns you EPoints with each EPoint equal to 0.1 PHP. You can redeem it as a gift voucher or cash redeemable through PayPal. The minimum redemption points are 2,500 or 250 PHP.
LifePointsPanel formerly GlobalTestmarket is another option.
Open a Paypal/Skrill/Payoneer account. Wise is a cheaper alternative to PayPal and the exchange rate is real-time. It also supports fund transfers to e-wallets like Maya and GCash. Send online income here.
Always budget. Money is finite and no matter how rich you think you are, if you don’t manage it, you’ll lose it all. That’s why it’s important to track your income and expenses, so you can make informed decisions when spending. There are lots of online tools for managing personal finances, but few really meet my expectations. What I’m looking for is simple, I just need features like budgeting, keeping tabs of income and expenses, and reporting.
I find Toshl a perfect match; it’s the most user-friendly. Unlike other advanced personal finance services, it is non-intrusive, there’s no need to provide your banking details. Just enter your income or expense, select the category and/or tag, set the date, and that’s it. At the end of the day, all that matters is you are aware of how much cash is at hand. Right?
To save money on groceries, apply for membership if the mall offers it. Gaisano’s Value Card costs only 100 PHP and you earn 1 PHP per 100 PHP purchase. The annual renewal is just 10 PHP.
Robinson’s Rewards Card costs 150 PHP and earns you 1 PHP per 400 PHP purchase. The annual renewal is 100 PHP every 2 years. ShopWise and Daiso have some unique and imported products. Buy it in bulk and in discount packs.
Buy only when there’s a sale or promo. Shopee offers a fantastic discount on their “ber” months’ sale. That happens on September 9, October 10, November 11, and December 12. Discounts are fantastic, especially on branded tech gadgets. When buying online, take note of the product/seller rating. Read the product quality reviews and inquires. The replies are a reliable gauge of whether the seller is responsive. Get Shopee free shipping vouchers here.
Now that you have savings, invest part of it in RTBs and LTCNDs. RTB or Retail Treasury Bond. Not tax-free and not insured by PDIC. Invest in RTB online or via UnionBank’s Bonds.PH mobile app. LTNCD stands for Long Term Negotiable Certificate of Deposit. It is tax-free and insured by PDIC.
SSS or the Social Security System, is provided for private-sector employees and gives pensions to members who have a minimum of 120 contributions and are at least 60 years old. However, to maximize the benefits paid, a monthly Total Contribution of 1,760 PHP for the maximum Monthly Salary Credit (MSC) of 16,000 PHP as shown in the SSS Schedule of Contributions. Pay it from age 54 until you retire at 65. Why?
There are 3 ways to compute the monthly pension, as explained in the SSS Benefits. This one generates the most:
Pension = 300 PHP + 20% of AMSC + (2% of MSC * (CYS – 10))
AMSC is Average Monthly Salary Credit and is computed based on the last 5 years. CYS is a Credited Year of Service. The AMSC and the 2% of MSC multiplied by the CYS in excess of 10 years is the trick. Take note that SSS doesn’t allow a drastic increase in contributions for ages 55 and above.
So if one starts working at age 20 and retires at 65, the pension is 14,700 PHP. See how it is computed here. If there are fewer than 120 contributions, you get a lump sum of the total contributions. Login here.
GSIS is the public-sector equivalent.
Pag-IBIG offers a Savings Program in which members can avail of housing loans, multi-purpose loan(MPL) and calamity loans. Pay savings for as low as 100 PHP monthly. Savings plus the dividends may be withdrawn after 20 years or 240 contributions or reaching the age of 60. If interested, here are the requirements for new loans.
Pag-IBIG MP2 is a voluntary savings program on top of the Pag-IBIG I contribution that provides a much higher yield. Membership is limited to active or former members. The minimum monthly contribution is 500.00 PHP. Term of 5 years and renewable. It is possible to open several accounts. Not strict, no requirement to contribute. Dividend rates vary but are always higher than Pag-IBIG I and tax-free too. A very safe investment, as contributions and earnings are government-guaranteed. More info here.
PhilHealth provides health insurance for all members. For the informal sector, the contribution is 200 PHP per month for those earning 25,000 PHP or below, otherwise it is 300 PHP. Member’s login page here.
There are numerous advantages to getting life insurance, especially if you get one that also offers an investment option. Such a type of insurance is known as variable life insurance. In 2008, I took Sun Life Financial’s Sun FlexiLink plan.
Sun FlexiLink is a peso-denominated insurance plan that provides financial protection and, at the same time, gives you the option to choose where your premium payments will be invested. I selected the Balanced Fund.
With variable life insurance, your plan’s fund value appreciates or depreciates depending on the performance of the fund selected. In this aspect, it is similar to a mutual fund or UITF, except that your beneficiary is guaranteed to receive the plan’s face amount, no matter what happens to the fund.
You can also withdraw portions of the fund value if needed.
On top of the face value and fund value, you get supplemental benefits such as the Hospital Income Benefit (HIB), which pays a daily hospital income in the event of hospitalization of the insured. The daily hospital income doubles in the case of confinement in an intensive care unit or confinement due to a dreaded disease. Another benefit is the Total Disability Benefit (TDB), which waives premiums if the insured becomes totally and permanently disabled.
Unlike mutual funds, UITFs, or stocks, variable life insurance is not a one-time lump sum investment. Premium payments are piecemeal and gradual. You can also top up if you have extra cash. It’s very much like a savings account but on steroids in terms of financial benefits and security.
Both bank savings accounts and insurance are highly liquid assets, a feature very useful in emergency cases.
Here’s a comprehensive HMO list, if you need to know.
Buy and sell gold jewelry. Since you already have a steady source of income, it’s time to indulge. Indulge in what?
Buy high-quality gold jewelry like necklaces, rings, earrings, and bracelets. purchase a pawnshop’s rematado sale. Don’t forget branded gold watches; they’re good buys too. You can pawn it easily in emergency situations where you need cash immediately.
The gold price does go up and down, so purchase it only when it is cheap. GoldPrizeZ is a good source of real-time gold prices per karat per gram. One good characteristic is that it is easily pawned during financially tough times; just make sure to get it back. Not only that, pieces of jewelry always make your wife happy, which is a plus point.
Most material things’ values depreciate over time. For example, a car bought for more than a million pesos immediately loses a chunk of its value the moment it leaves the showroom. Real property, on the other hand, appreciates as years go by.
Start with small lots and choose agricultural ones as they’re more affordable than residential. It can be turned into a vegetable farm for extra income while waiting for a buyer. You can buy bargain properties at municipal tax delinquent and bank-acquired property auctions. If redeemed by the owner after 1 year, you earn 2%/month interest. Just make sure that it has a title, as untitled ones may give you a big headache later on.
In general, don’t buy properties as long-term investments, except for ones that have a high potential for future development. Instead, engage in buying and selling, the earlier you can dispose of it at a profit, the better. If the lot is large, subdivide it and sell the parcels at huge margins.
A high-value property is located near cities, towns, business or residential districts, tourist spots, and major roads. Don’t ignore sleazy areas that are planned for a big development in the future, either by the government or corporation. If it’s a good location, you can rent the space or the entire lot.
Also, buy irregular-shaped lots next to irregular but high-potential lots.
Be forewarned that selling properties takes time and will tie up your capital, so invest only your surplus savings.
Look for foreclosed properties from PNB. You’ll be surprised at what you find.
When buying house and lot, avoid any Manny Villar-affiliated properties like Savannah, Camella, Lessandra or Lumina. The units are of low quality and they use sub-standard materials. I’ve experienced renting a unit where the second floor has cracks; it is deformed and literally shakes. The roof is leaking. In another unit, the drainage pipe leads nowhere. Haha. Houses are poorly designed and, with no ventilation, it is very hot inside. The staff and services are also very unprofessional. They don’t act on any complaints. The water they supply is dark green, dirty, and smells like it came from a septic tank. Sometimes it has worms. Ewww, so disgusting.
The US Consumer Financial Protection Bureau published a set of activities and conversations to aid children in developing money skills, habits, and attitudes needed to become financially secure in the future. There are 3 groups of activities and conversations according to age. The early childhood which is from 3-5 years old, the middle childhood for ages 6-12, and the teen years and young adulthood for 13-up to 21 years of age. Below are some points to teach kids about personal finance.
Personally, I suggest kids play games that involve financial decisions like Monopoly or Cash Flow which involve fun in learning. Invstr is a mobile app that teaches them to trade in a live environment through the Fantasy Finance game. Do stocks, forex, crypto, and commodities trading and win real cash prizes by joining the Invstr Fantasy League (IFL) and finishing in the top 10.
When kids decide to start their own “business,” like selling lemonade or candies, there’s no need for you to provide capital. Instead, they use their own savings. Surprise? Children do have income streams in the form of allowances from you and cash gifts from grandparents, relatives, godparents, and friends on their birthdays or during holidays and house visits. Teach them to re-invest part of their income in their “business”.
Would like to share this article from PhilStar, Empleyado o negosyante? which sums up why its important to do a business.
As they grow up, they develop the habit of reading the business section of newspapers. Subscribe to financial magazines. Also give them books by business icons like Rich Dad, Poor Dad. These will expose them to myriad investment ideas and will help guide them in molding their own.
Teach them that no matter what the alibi, they should never lend to anyone, even to their closest “friends”. The opposite is also true; no matter how enticing the loan deal may be, don’t borrow.
Prepare for your retirement money. Use this tool to compute how much you require for your retirement fund using this tool.
Some people pretend to be rich, but are you really rich? According to the best-selling personal finance book: The Millionaire Next Door by Thomas J. Stanley and William D. Danko, use the following formula:
- Multiply your age by your annual household income from all sources except inheritances.
- Divide the result by 10.
- This, less any inherited wealth, is what your net worth should be.
Here’s a good list of popular personal finance blogs in the Philippines.
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