The Top Three Financial Needs

We have been discussing savings, investment, insurance and other matters through the past fifteen years.  We have put together the Kapatiran sa Kasaganaan (KsK) Cooperative and the One Wealthy Nation (OWN) Fund and Community. KsK Cooperative is invested in the Rural Bank of Cavity City (OWN Bank) and the aurumOne Makati Hotel and in the OWN Fund. OWN Fund is managed by the First Asset Management Investment (FAMI). As such, FAMI provided options for the KsK Coop members to invest small amounts in other FAMI funds.  All my advice have been focused on allowing my readers and listeners to make an independent choice on the options they have.


Reviewing all our past columnson various publications such as Bulgar, The Sun (HK), PinoyTayoSanman (HK), Tinigng Marino and including our Pisobilitiesand  Pera Mo Palaguin Mo series of books, Three Top Financial Needs of every individual and of every family stand out, namely: Money for Health,  Money for Protection and Money for Financial Growth (Investment).


Money For Health


Without doubt, every reader of this column, or his family,has experienced some kind of a medical problem, or worse, a medical emergency requiring hospitalization or at least, some kind of medical treatment requiring money.  When this occurred, did you have the ready cash to pay for the medical service?


According to the leading insurance company “ Health is a top priority among Filipinos but only 2 out of 10 Filipinos are financiallyprepared for serious illness.”


We have always made talked about putting aside “Emergency Funds” as the first obligation once you start earning.  The usual mindset is to save and set aside actual cash for that “emergency”.  In reality, this is not the only solution.  The insurance industry has in fact many products that provide this kind of resource when emergency strikes.  For small amounts of premiums (much less than what an individual will have to regularly set aside on his own), the risk of not having sufficient cash for health emergencies is effectively addressed by these insurance products.


The number one insurance company in the Philippines, Philam Life, has one of these offerings that is really worth considering.  We are presently studying it and we invite anyone to write or email us on info@colaycofoundation.comif you want to know more about this health related insurance product of Philam Life.

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Collective Investing Seminar, July 30, 2016

CollectiveInvesting07302016Poster3Collective investing
 is for long-time and first-time investors. It is defined as the gathering of assets from individuals and organizations to develop a larger, diversified portfolio. Being the pioneers of sharing financial literacy to the masses, the Colayco Financial Education will be offering a COLLECTIVE INVESTING SEMINAR, this coming July 30, 2016, 9:00 AM to 12:00 NN at the Ortigas Foundation Library, 2nd Floor Ortigas Building, Ortigas corner Meralco Avenue, Ortigas Center, Makati City. The seminar will cover MUTUAL FUND, INSURANCE VUL (Variable Unit Life), and UITF (Unit Investment Trust Fund); the similarities and differences of the three, the top-dogs in the COLLECTIVE INVESTING industry, and more! For details, contact Ms. Gilda E. Bumatay at 0917-8632131 or 637-3741 for RESERVATIONS and EXCLUSIVE SEMINAR DISCOUNTS or email us at We here at Colayco Financial Education, see this as an opportunity not only for those who are “financially-privileged” but for small-time earners to finally participate in our country’s GROWING investment climate. So what are you waiting for? Strike whilst the iron is hot!

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Starting To Work On Your Success pt. 3

Goal Setting 3


In the previous column, I asked you to compute how much your present lifestyle costs you. We are now on the second and third questions of eight questions you need to ask yourself to help you set your financial goals.


2) If you want your lifestyle to improve, how much more improvement do you want?


Since we are planning for many years ahead, it is normal that you want a better lifestyle.  This means that you will be spending more for the better lifestyle.  You have to write the kind of improvement you want in terms of your budget.  Knowing what you are already spending today in your present lifestyle, you can have an estimate of how much you have to be spending also today if you have the lifestyle that you want.


You will probably wonder and think that in the coming years, the cost of what you buy today will be so much more so why am I asking you to compute in today’s cost.  You are correct and you should consider that factor which is called inflation when we go into the actual preparation of your financial plan.  We will do that later but it is good enough to know how much you would need today for the improved lifestyle that you want.



  • How much risk can you take?


Taking risks with your savings is dependent on your personal orientation as well as your age and the kind of investments you already have.  The general principle is that nobody can be correct one hundred percent of the time.  Everybody makes mistakes.  Therefore, it is very possible that you may choose some wrong investments.  The key is to be able to rise and learn from failure and in effect, turn the failure as a success. And you can always rise from any kind of failure.  Unfortunately however, when it comes to money or business failure, it is only possible to recover if you still have time and energy left.


If you are young, you can take more risk because you have the time and energy. However, just because you are young does not mean that you should only invest in risky businesses.  You still have to balance your investments so that if some fail, you will have the chance to recover faster. As they say, never put your eggs in one basket.


As you grow more wealth and gain more experience, you can invest in higher risk opportunities only if you can really afford to lose your investment completely.  This means that you have enough investments that, if you lose the risky investment, you can still meet your financial goals. It is almost like gambling.  When you gamble, you know that you can lose that amount completely.


Remember, THE HIGHER THE RETURNS, THE HIGHER THE RISKS.  It is easy to be attracted to high returns especially when so many friends and relatives tell you stories about how much money they have made.  So, study your risk options well.


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Starting To Work On Your Success pt. 2

Goal Setting 2


In the last article we started to talk about the need to set personal financial goals or objectives.  Before, making your plan, here are some tips on what you should be ready to do:


1)    You have to put it in writing!  There is a study that shows that people who succeed write their plans.  You must have a written plan for each goal.


2)    You can have different goals but you must state it in positive terms.  It is not enough to say that you want to save or that you want to cut expenses.  You have to know what it is that you are saving for and specify each goal in terms of amounts.


3)    You must have a specific timetable for each goal.  If you have a timetable, you will not procrastinate because you know when you have to reach it.  At the same time, you will realize how realistic your goals are based on your timetable.


4)    You have to be ready to monitor your progress.


Now and in the coming columns, I will present you eight questions that you need to ask yourself to be able to set your financial goals:


1)  What level of lifestyle do you want?


Each person has a dream of the kind of lifestyle he wants.   What is meant by lifestyle?  Lifestyle is the standard of living.  This is usually defined in terms of the expenses needed daily/monthly/yearly.  The higher the standard, the higher the expense.


The highest standard is that of the “rich and famous” normally equated to being in the society pages of the newspapers, driving around in expensive cars, having a big house, regular travel, hosting big parties regularly etc. However, you will be surprised that sometimes these people are actually not as rich as they are portrayed to be.  Many of them are deep in debt that if they suddenly die, their heirs might be left with so many problems instead of inheritance.


Many people will say that they just want lots of money to spend without any idea of what they want to do with it.  If they don’t know what they want to spend for, any amount of money can very quickly disappear.  What is important is that you have a good idea of how much you would like to spend every day/ every month/ every year that will make you comfortable.


You can start with your present lifestyle.  You know how much you spend regularly.  If you are regularly in credit card or other kinds of debt, you can estimate how much more income you really need over what you are actually receiving, to maintain your present lifestyle.  If you are unable to earn that additional income, you have to downgrade your present lifestyle or go to the next question next week.

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Starting to Work On Your Success

And here is how we want to help you get it!  Follow the coming articles that will help those who want a refresher course…

Goal Setting  Part 1 

It has been more than eleven years since I started teaching how to care for your personal financial matters.  From the many feedback I have received from readers, it is very clear that so many ordinary earning Filipinos do not know how to save and grow their money.  The questions I receive are varied and detailed but the most frequent can be summarized into three:

1)    How can I save?

2)    How can I get into a business?

3)    How do I invest in mutual funds?

Before even asking these questions, each person should first set their goals.   The New Year is only about 45 days away, it is an opportune time to devote time on GOAL SETTING.

I always remind people that you cannot go anywhere if you do not first establish where you are and where you want to go.  My favorite example is when you go to a Mall for the first time and you want to go to a particular store without wasting time because you are in a hurry.  You can ask people around you but sometimes, they do not know or worse, they give you the wrong information.  The best method is to look at the map in the mall and locate your store and how to go there.

This is the same routine you should follow when you want to save, get into business, or invest your money.  When people realize they should save and grow their money, they are suddenly in a hurry to do it without any planning.  They start asking around from people they know.  Unfortunately, most of the time, they ask people who also do not know how but are so eager to pretend they know.  They start getting wrong advice and end up losing money without even knowing how and why.

This need not happen if they followed the rule of GOAL SETTING.  The first step is to establish a plan, which is your “map”  or your financial goal.  Note that most legitimate investments are sound investment instruments. They are all good investments.  However, what is important is to be able to tell which one is suitable or best applicable to your needs.  It is impossible to be able to discern which is the best for your personal situation unless you have your own financial plan based on your own specific timetable.   We will talk more about goal setting in the next articles.

For added information, visit and at  Tumawag sa 637 3741 o 637 3731 o 0917 863 2131.  Our next seminar is on Nov. 28.  Join it.  Based on experience, we learn more when we have immediate feedback on our questions.

Listen to Pera Mo, Palaguin Mo every Monday on DZXL 558AM from 11am to 12 noon. You can also watch us on  Pisobilities Reality every Tuesday, 8:30 pm, on Light Network Channel 33 and every Saturday on GMA News TV 11, 6am.

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Sinabi ni Mr. Generoso Asuncion na nakabasa ng mga unang libro:

“Simula nang mabasa ko ang dalawang aklat na “Pera Mo Palaguin Mo 1 & 2” nagbago ang pananaw ko sa buhay. Maliban sa mga aklat, pinanood ko rin ang mga payo ni G. Colayco sa YouTube at binasa ko ang artikulo sa website. Ang laki ng pagbabagong ginawa niya sa buhay ko. Marunong na akong mag impok ng pera. Ibinabahagi ko rin ang mga kaalamang natutunan ko sa aking mga anak, kaibigan, kapatid, at mga taong nakikilala ko para malaman nila kung ano ang tamang paraan ng pag-iimpok ng pera para makalaya sa kahirapan. Maraming salamat Mr. Topakits. Isa kang LIWANAG sa madilim na kapaligiran ng kahirapan.”

Sinabi ni K. Cayanong, isang Customer Service Representative ng Convergys Philippines noong 2013:

“Naging masaya ako sa mga natutunan ko sa Colayco Foundation. Nalaman ko na mali pala ang paraan ng pag-aayos ko ng aking mga kita, pero nalaman ko din ang pagkakataon na magsimula NGAYON. Magsimulang mag-ipon at mamuhunan. Nalaman ko ang pangangailangan na dapat siguraduhin ang magandang kinabukasan ko at ng pamilya ko.”

Sana ay makatulong ang mga pahayag na ito upang himukin kayong basahin at pag-aralan, kung hindi para sarili nyo, para sa mga miyembro ng inyong pamilya na mayroong malaking pakinabang sa pamamagitan ng pagkakaroon ng mabuting batayan sa pamamahala ng sariling pananalapi.


Sinabi ni Mary Grace M. Orbase, isang mag-aaral noong 2011:

“Ako ay 14 taong gulang, estudyante sa high school at malapit ng maging third year high school, nabasa ko ang libro ninyo, Pera Mo Palaguin Mo! 2. Naging malaking inspirasyon ito sa akin. Natuto at naliwanagan ako sa aking murang edad. Natuto ako kung paano hawakan ang aking pera-na dapat ay palaging may maitatabi. Mabuhay at mapasainyo sana ang swerte. Sana ay marami pang katulad kong estudyante sa high school na makabasa at maliwanagan ng inyong libro J”

Sinabi ni Renz Sumera, isang Lisensyadong Chemical Engineer noong 2012:

“Nakatapos ako ng Chemical Engineering sa edad na 21. Naghahanap ako ngayon ng trabaho habang nag-aaral para sa board exam sa Nobyembre. Nabasa ko ang dalawang libro nyo, Money at Wealth at naging inspirasyon ito sa akin para pahalagahan ang pera at matutong mamuhunan. Di ko na mahintay na magsimulang magkaroon ng active income at mag-ipon ng hangang 20% para sa magandang puhunan. Salamat sa pagsulat ng mga librong ito at sana ay marami pang bagong mga nakapagtapos na katulad ko o mga batang propesyonal ang makabasa ng mga ito at maging insperado.”

Sinabi ni Leonardo Alba, isang OFW galing Abu Dhabi:

“Inuulit ulit ko po ang libro ninyo dahil may mga part na di ko po agad makuha. Pero all in all ay maganda po ang nilalaman nito with matching examples. Sa ngayon po ay try kong apply ang iba kong nabasa sa book.”

Sabi ni Cecilia T. noon pang 2012

“Ang mga libro ninyo ay nakapagtuturo at nagbibigay ng simpleng inpormasyon. Importante ito lalo na sa babaeng katulad ko. Itong librong ito ay isang biyaya. I have learned how to take care and grow the finances of my family.”

Mula kay Anthony Pinaglabanan ng Iowa

“Naimpluwensyahan ako ni Mr. Colayco sa aking pinansyal na kaalaman anim na taon na ang nakakaraan, mayroon na akong ipinuhunan ngayon at ito ay gumagalaw na laban sa pagtaas ng presyo ng mga bilihin at hindi lang pinapaginipan ang pagtaas ng puhunan ko. Ang susunod kong proyekto ay gumawa ng Passive Income dahil gusto kong magretiro ng maaga para makasama ko ang pamilya ko ng mas matagal.”

Nanggaling kay Razmon ng Zamboanga, 2006

“Salamat sa pagpalago n gaming pero kundi pati na rin sa pagbibigay ng kaalaman. Sulit ang pagpunta ko galing sa probinsya para bumili ng mga libro ninyo. Bumiyahe man ako ng malayo, nagbukas naman ito ng malaking oportunidad at pagsasakatuparan. Talagang lumago. Sa mga librong Pera Palaguin naunawaan ko na ang kahirapan ay dahil din sa kakulangan sa kaalaman kung paano aayusin ang iyong pinansiyal na buhay at hindi lamang sa kakulangan ng mapagkukuhanan ng pera.”

Ibinahagi naman ni Simpe Rogie Magana-Co

“Tinuturuan ninyo ang mga tao para magkaroon ng kaalaman sa pinansiyal nilang buhay sa pag-gamit ng simpleng lenguahe at mga praktikal na halimbawa. Patuloy ninyong binabahagi ang mahalagang kaalaman at personal na karanasan sa paghawak ng pera.”

Kuwento naman ni Sarah Jane Mayola OFW

“Matagal ko na po narinig yung Colayco Foundation nung nasa labas pa ako na nagtatrabaho bilang staff nurse sa isang ospital sa Kingdom of Saudi Arabia. Hindi po ako nagkaroon ng pagkakataon para magsimula at mamuhunan. Siguro dahil hindi pa ako handa o hindi pa ako determinadong baguhin ang buhay ko. Ngayon na nandito na ako sa Pilipinas, naghahanap ulit ako ng trabaho sa ibang bansa. Ngayon ko lang narealize ang kahalagahan ng proper investment and savings. Lahat ng ipon ko naubos na po at ako ay call center agent saMakati. Nakakaipon lang ako ng Php1000 every tuwing sahod pero desidido na akong mag-save. Ngayon hindi ko na gagastahin ang ipon ko.”

Sana ay makatulong ang mga pahayag na ito upang himukin kayong basahin at pag-aralan, kung hindi para sarili nyo, para sa mga miyembro ng inyong pamilya na mayroong malaking pakinabang sa pamamagitan ng pagkakaroon ng mabuting batayan sa pamamahala ng sariling pananalapi. Pasyalan ang


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Ang bago kong libro karugtong ng mga libro na isinulat ko ay mabibili na sa National Bookstore at iba pang bookstores at pati rin sa

Ang pamagat ng bago kong libro ay nagmula sa mga nauna kong libro. Ang unang libro ay “WEALTH WITHIN YOUR REACH. PERA MO, PALAGUIN MO!” Ang pangalawang libro ay “MAKE YOUR MONEY WORK. PERA MO, PALAGUIN MO!”

Ang pamagat nito ay madaling maintindihan: “WEALTH REACHED.  MONEY WORKED.  PERA MO, PINALAGO MO!” Inalam ng libro ang buhay ng mga tauhan sa unang dalawang libro at ipinaliwanag kung ano ang ginawa nila sa loob ng labing-isang taon matapos nilang basahin ang libro at pinakinggan ang mga payo ko. Mapapaniwala ka na kung nakinig ka noon, sana’y maganda na ang pinansyal na buhay mo ngayon.

Sana ay isa ka sa mga talagang nakinig. Kung hindi naman, hindi pa huli ang lahat. Kunin ang libro, basahin at pag-aralan at maniwala sa sarili na may magagawa ka. Marami nang tao ang nagtagumpay mula sa maliit nakinakailangang ipon.Ang kailangan mo ay Disiplina at Determinasyon.Kaya mo yan. Huwag ka nang maghintay muli ng sampung taon bagoka magsisi ulit dahil wala ka na namang ginawa. Gawin mo na NGAYON!

Ibabahagi ko sa iyo ngayon ang mga pahayag ng mga tao tungkol sa libro.

Sinabi niMr. Hans B. Sicat, Presidente at CEO ng Philippine Stock Exchange:

“Ibinahagi ni G. Colayco ang pananaw ng Philippine Stock Exchange sa pagsulong ng kultura sa pag-iipon at pamumuhunan dito sa ating bansa. Sa pagsisimula at paghihikayat sa mga empleyado para mag-ipon at mamuhunan, nakakapagbigay tayo ng payo sa tamang paghawak ng pera sa ating mga kasamahan na sana ay maituro din nila sa kanilang mga kaibigan at kakilala.”

Ayon naman kay G. Ignacio B. Gimenez, Tagapangulo at Presidente ng PhilEquity Fund, Inc.:

Ang “Wealth Reached, Money Worked. Pera Mo, Pinalago Mo” ay nakahihikayat at nagtuturo.Sa mahigit na sampung taon sa ganitong adbokasiya, ang mensahe ni Topax tungkol sa pananalapi ay lalo pang pinagyaman ng mga tunay na karanasan ng mga totoong tao na ginabayan niya at ng buong Colayco Financial Education. Hindi naman talaga kailangan ng napakalaking pera at pagsisikap para maging maayos ang buhay pananalapi. Ang susi sa pagyaman – oras, pasensya at tamang pagdedesisyon. Higit kailanman ang mga Pilipino ay kailangan maging marunong sa paghawak ng kanilang pera hindi lamang sa pagbili o pag-gastos ng perang pinaghirapan nila peropati na rin kung papaano ito palalaguin. Madaling basahin at indintihin, ito ang libro na makakatulong sa mga Pilipino siyasatinang posibilidad na bukas, magagamit at abot-kaya ng mga ordinaryong Pilipinong kumikita.”

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My new book sequel to the books I have written is available in National Bookstore and other bookstores and even directly from us at

The title of the new book comes from the previous books.  The first book was “WEALTH WITHIN YOUR REACH. PERA MO, PALAGUIN MO!” The second book was “MAKE YOUR MONEY WORK. PERA MO, PALAGUIN MO!”

This new book title is self-explanatory:  “WEALTH REACHED.  MONEY WORKED.  PERA MO, PINALAGO MO!”  The book investigates the lives of the various characters in the first two books and explains what they did in the past eleven years after reading my books and listening to my advice.  It will make you believe that, if you had listened then, you would be in a better personal financial condition today.

I hope you were one of those who did listen.  If you did not, it is still not too late.  Get the book, read and analyze and convince yourself that you can do something.  So many people have succeeded with very little required savings.  What you need is a lot of Discipline and Determination.  You can do it.  Don’t wait for another ten years before you again regret that you did not do something.  You can do it NOW!

I share with you now the various sharing of people regarding the books.

Mr. Hans B. Sicat,?President and CEO of the Philippine Stock Exchange says:

“Mr. Colayco shares the Philippine Stock Exchange’s vision in promoting a culture of savings and investments in the country. By starting and encouraging employees to save and invest, we are in fact contributing to the financial wellness of our work teams which should hopefully be passed on to their immediate environs and communities.”

Mr. Ignacio B. Gimenez?Chairman and President, PhilEquity Fund, Inc. notes that:

“Wealth Reached, Money Worked” is motivating and informative. After over 10 years in this advocacy, Topax’s message of financial freedom is enriched by the real experience of real people he and the Colayco Financial Education team have enlightened along the way. It really doesn’t take a lot of money and effort to be financially comfortable. The key to building wealth – time, patience and good decision making. More than ever Filipinos need to be wise with their money not just in choosing what to buy or how to spend their hard earned cash but in how to grow it. Easy to read and completely understandable, this book will help Filipinos explore the possibilities open, available and affordable to the ordinary income earning Filipino.”

Mr. Generoso Asuncion who has read the past books says:

“When I read the 2 books “Pera Mo Palaguin Mo 1 & 2” my view in life has changed. Asides from the books, I also watched Mr. Colayco in YouTube and read the articles in the web. He changed my life. I learned how to save money. I also share what I have learned to my kids, friends, my siblings and to the people I meet so they would know the right way to save money and attain financial freedom. Thank you so much Mr. Topax. You are the LIGHT in a dark place of poverty.”

  1. Cayanong, a?Customer Service Representative, Convergys Philippines in 2013 says:

“I definitely enjoyed learning from Colayco Foundation. It brought a realization of how badly I manage my earnings, but it also opened the opportunity to start NOW. Start saving and investing. It made me aware of the need to secure my self and my family’s future.”

Mary Grace M. Orbase, a student in 2011 said:

“I am a 14 year old high school student soon to be third year high school student, I’ve read your book, Pera Mo Palaguin Mo! 2. It inspired me a lot. It guides me and enlightens me at my tender age. It really awakened me on how to handle my allowance-that there’s always savings. More power and good luck. I hope there will be a lot of high school students like me that will read and will be enlightened with your book :)”

RenzSumera, a?Licensed Chemical Engineer in 2012 said:

“I just graduated with a degree in Chemical Engineering at the age of 21. I am currently looking for a career while at the same time studying for my board exam this November. I have read your two books, Money and Wealth and it really inspired me to value money and learn how to invest. I can’t wait to start earning active income and saving up to 20% of it for good investments. Thank you for writing those books and I hope that more fresh graduates like me or young professionals will read them and be inspired.”

Leonardo Alba, an OFW from Abu Dhabi said:

“I read your book over and over again because I was not able to understand some parts with one pass.  But all in all the content was good and it even have matching examples.  For now I will try to apply what I have read from your book.”

Cecilia T., 2012 said:

Your books are very informative and has simple information. This is important especially for a woman like me. This book is really a blessing. Natutoakokungpaanoiingatan at mapapalagoang finances ngakingpamilya.

Anthony Pinaglabanan, Iowa said:

Mr. Colayco was the one who influenced me in financial literacy 6 years ago, got some investments now and its working beating inflation and not still focusing to make it happen. My next project is to create passive income as I want to retire early to enjoy time with my family.

RazmonZamboanga, 2006 said:

Thank you for making not only our peramalagobut especially our mind. It was worth the trip from the province to buy your books. I travelled hundreds of kilometers and it had opened a million miles of opportunity and realizations. Talaganglumago. The PeraPalaguin Books made me realize that poverty can be caused by ignorance in managing your finances and not necessarily the inadequacy of financial resources.

SimpeRogie Magana-Co said:

You educate people on how to be financially literate by using simple language and practical examples. You continue to share valuable knowledge and personal experience in money management.

SimpeRogie Magana-Co said:

You educate people on how to be financially literate by using simple language and practical examples. You continue to share valuable knowledge and personal experience in money management.

Sarah Jane Mayola OFW said:

I heard of Colayco Foundation some time back when I was still working as a staff nurse at one of the hospitals in the Kingdom of Saudi Arabia. I didn’t have the chance to start maybe because I was not ready yet or I was not that determined to make a change in my life. Now that I’m back here in the Philippines, I’m applying for a job again overseas. I just realized how important is proper investment and savings. All my savings are gone and for the meantime I’m working as a call center agent here in Makati. I only save Php1000 every payday but I’ve decided to start saving. This time I will set aside and keep my savings.

I hope these statements will help encourage you to read and study my books, if not for yourself, for your family members who have so much to gain by having a good basic education in their personal finance management.  Check out for more information.

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More on Spending Practices that will put you in Debt

Can you afford to live the lifestyle of your Parents?


In other countries, children who reach the age of 18 usually move out of their parents’ house and earn their own living.  In our country, children usually don’t leave their parents’ house until they are married.  In many cases, they even live with their parents even after they have gotten married and even when they have children of their own.

There are two points of view in these situations…those of the parents and those of the children.

The parents who keep their children with them even when they are already earning a living and/or have a family may be happy if they can bear the burden of the additional expense.  In some cases, the working children help in the family expenses in which case everybody is happy with the arrangement.  However, this may not be ideal when looking at the long term, if the parents are not able to save enough for the time when they can no longer work.  They will then be dependent on their children’s support and their children may be delayed in preparing for their own retirement.  This may sound ridiculous but remember the principle of saving related to compounding.  “The earlier you start saving and compounding your earnings, the faster you will get to your wealth goal.”

The children on the other hand, whether they continue to live with their parents or live on their own have to undergo three major hurdles.  First is to adjust to a lifestyle they can afford.  If they happened to have parents who could afford to provide them luxury, they have gotten used to that style of living.  Can they afford the same style?  For those who are blessed to have a big income immediately, what luck!  But for the others, they must remember that their parents had a whole life term ahead of them to earn their money.  They are just starting their own life term and have to earn their own future.

Second is not to get into any bad debt.  A bad debt does not bring in any income versus a good debt that either brings income or reduces expenses.  The tendency is to use credit cards to maintain the lifestyle.  Credit card debt, especially if incurred for consumption, is never a good debt.

Third is to remember to save for their own retirement even if they have to help support their parents.

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More on Spending Practices that will put you in Debt




There are some who have the cash to pay for their purchases but use their credit cards because it is cool.  Besides, there are points to be earned on the credit card.  Very good! Just make sure you set aside the cash to pay for the credit card statement on due date and not later.  Trouble will arise when you forget that you used your credit card and you see the cash available in your wallet.  You use the cash and are scrounging around payment on due date.  Worse, you keep using the credit card and not adding up your individual purchases.  Before you know it, you have overspent.


There are also more and more people using their credit cards for automatic payment of their utility bills and other monthly expenses.  What happens is that you don’t pay for your bills with cash as you normally do and the remaining cash is what you have available for your other expenses.  You are now increasing your risk of not controlling your expenses.  When your credit card bill comes probably several weeks later, you will be in for a big shock.  If you don’t pay your credit card on time, you will be in credit card debt and the interest and penalties will be horrendous.  It is always better to just use cash if there is serious risk of overlooking payment in due date, or worse, if you end up not being able to control your use of credit cards.




Vacations are wonderful and good to recharge your body spirits.  It is however funny sometimes that so much is programmed during a vacation that you end up needing another vacation just to recover.


It is good to program your vacation especially from the financial point of view.  Unfortunately, some vacations are taken as an emotional outlet just to get away from reality because of a big problem.  Because of the emotional issue, the financial burden of the vacation is forgotten and credit cards are used.  That is a big mistake.


Never ever use your credit card to pay for a vacation unless you really have the cash actually set aside to pay your statement on due date.  During the vacation, try to leave your credit card behind and just bring your budgeted cash so you are not tempted.  When you are with family, make sure each one understands the budget and strictly follows it!

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