More on Spending Practices that will put you in Debt

Live it up!  Some people believe that times are getting worse.  Of course, there are many good things and improvements happening around us.  But some choose not to see those.  They only see all the problems going on in our country and in the world.


This pessimism has been around from the beginning of time!  In fact, it started with the snake that was actually the devil in the Garden of Eden.  The snake fooled Eve that they could not be happy without eating the forbidden fruit.  In effect, the snake devil convinced her to enjoy while she could.  And that was the start of real unhappiness.


Today, there is much political news that doesn’t seem to get resolved.  There is so much fraud in banking and mortgages.   Politicians seem to be running our country and the world to the ground.   Our money could become worthless in the future.  Our savings could be lost when a bank is closed down.  The investments for our children’s schooling could be lost in stock market crashes or changes in government policies.  Why then should we then care about saving?  Live in the present.  Let’s spend on what we like today. Let the future take care of itself.


Nothing could be further from correct with this kind of spending habit.  This is the act of a person who is irresponsible. If he ever matures, he will realize that all the bad habits he developed will catch up with him.  He would have a bad credit history with banks and credit cards.  He will be rejected for car loans, home loans and any kind of loan.  His poor family will suffer and he and his family will be forced to work doubly hard for other sources of income.


Well there is a choice.  I read about a man who decided to “quit money.”  He lived with whatever was cast away by others.  He became a scavenger and just lived without any purpose other than to show that it was possible to live without material things.  In other words, he was a bum.


If you do not want to live as a bum, then the lesson is to look at our country and the world as a half-full glass.  There are so many opportunities to fill it up and eventually it will fill up.  When we are optimistic, we would look for ways to improve our lives and as we improve our lives, we do our little part to help our country improve.


If you decide that life will improve, then you need to make sure you do not get into big useless debt and follow the principles of saving and growing your wealth.

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More on Spending Practices that will put you in Debt

Acting like a Spoiled Brat is a third practice that could lead to unnecessary debt.

I am not a psychologist but I just look at practical situations.  Look at the action of children as they grow up.  Initially, they have to get what they want when they want it.  A hungry infant will not stop crying until fed.  As the baby grows older, he will insist on getting what he wants always to the point of selfishness.   It is up to the parents to train their child that he cannot get everything he wants all the time, especially if what he wants is not good for him or for those around him.  A child who is not disciplined is labeled a “spoiled brat.”  Unfortunately, many children grow up to be adults without learning the important lessons of patience and discipline.  Some adults have to get what they want and continue to be “spoiled brats.”

These adult “spoiled brats” tend to translate their bad trait into bad spending habits.  Some become shopaholics.  A shopaholic feels like he has to treat himself to be happy.  It would be good if he were terribly rich and could afford all the shopping.  But for most, the excessive shopping leads to eventual lack of money and worse, credit card debt.  Just like an alcoholic, a shopaholic will have moments when he realizes the hole he is digging for himself but it will be difficult to stop digging the hole.  He has to really change himself. He has to realize that shopping can no longer make him happy because it has led to problems that lead to his unhappiness.  Anyone who lacks money or is in credit card debt will always be unhappy.  There will be so many people running after him to pay his debts.  Can anyone be happy when he knows so many people are running after him to get his money?

A shopaholic has to find another way to make himself happy.  Even if it means consulting with a psychiatrist, he must do it immediately before he creates bigger problems for himself and for his family.  If he doesn’t, he will be forced to learn his lesson the hard way.  Usually, the shopaholic with a limited budget will end up feeling so miserable because he is being hunted by credit card companies.  He will be forced to pay for the purchases that are probably not useful anymore and worse, he no longer has the money nor the credit to go shopping.

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More on Spending Practices that will put you in Debt

Temptations away from your financial goals is a second practice that could lead you to unnecessary debt.  Remember that I always advise that you should make your Statement of Assets and Liabilities (SAL) to know exactly where you are in terms of your financial life.  Perhaps you can appreciate your SAL if you consider that it is the same as the SALN (Statement of Assets, Liabilities and Net Worth) that is discussed so often now related to the Chief Justice impeachment hearings.


You should also make your Budget Forecast clearing showing your income, your savings and your expenses.  (Income minus Savings equals Expenses).  Knowing your Budget and your SAL, you should make your Personal Financial Plan, which is a target on how much money you should have at a future period of time.  Your Plan should include how you are going to invest your savings to grow your SAL.  As you make your regular SAL at least twice a year, you will understand whether your wealth is increasing or not.


There will be so many temptations along the way that can make you forget what your financial goals are.  Most of these temptations will come from your relatives, friends and neighbors who may not be in the same mode of planning for the financial future, as you are.  Their values may not be the same in that they don’t believe in saving.  Or their income might be much higher than yours, in which case they may have more left for expenses than you have.


One example where values can differ is how baptisms are celebrated.  Some believe in a big baptism celebration reasoning that it will only happen once in a lifetime.  This is especially true for the first child.  When you decide on a big baptism party, family members and friends will give you their thoughts on what you should have.  Some will say that you should have a special baptism dress, a special venue etc.  All of this will cost a lot of money and will certainly lessen your savings. Your baby will not even enjoy the baptism party.  He might even be uncomfortable through it.  These savings could start off your child’s savings plan that he will enjoy when he really needs it.


Those who have better money values would choose a simple quiet baptism.  You do not need to please your family and friends.  Even if they will contribute to pay for the baptism, you could just choose to keep their cash contributions as savings for your baby.  Of course, the cash contributions might not be given if you don’t have a baptism celebration.  If this is true, compare how much you would spend for a simple quiet baptism versus a big baptism. Will the cash contributions you expect more than cover the difference?  Perhaps, if you are sure you will not be tempted by family and friends to spend much more than your budget.

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Spending Practices that will put you in Debt

Some people have ways of thinking in relation to spending that could lead them into debt.  I will be discussing with you some of the spending practices of some people that lead them into always being short of cash and living on credit card or in deep credit card debt.  In analyzing these practices, I want to emphasize the principles I have been discussing through the years.  Read on and see how you can be more aware so that you avoid the pitfalls.

Bonus – Let’s say that you received a bonus of P10,000. What would you do with it?  Most people would not only spend all of it.  Apparently, many will even use it as a down-payment for an item, and unfortunately, the installment payments for the item bought is usually more than their budget. Normally, a budget is just enough for your regular expenses.  You should not add to your regular expenses without a permanent addition to your regular income.  A bonus is not regular income and after receiving it, there will be no more to come in the near future.

If you are making a budget for your regular income and expenses, all the more you must treat a bonus with some analysis and planning.  Remember the First Principle is “Pay Yourself First?”   I ask you to follow the formula “Income minus Savings equals Expenses.”  A bonus is income as well.  You must still follow the formula.  Set aside 10-20% of the bonus as your savings.

You could also give yourself and your family a little treat but make sure it is something modest and commensurate to your regular income.

Discuss the bonus with your spouse and/or your family.  What are your priorities to help get the best value for the windfall.  Since the amount is limited, don’t immediately think that you can use it for a new type of expense that could balloon to something more than you bargained for.  Rather, maybe it is better to use it to help you in a regular expense or even better, put it all in savings.

The bonus is the only additional income you have. Unless you get a salary increase, you do not have additional money to pay for additional regular installment payments.  Never buy an item that will require you to make regular installments that you cannot afford.

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G.Y.M. Seminar: Collective Investing

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Taking advantage of the muscle instead of doing your own hustle is essense of collective investing. By pooling of resources, one gets and should get benefits that one will not get if one stands or invests alone. BAKAS is a common term and action among Filipinos … Continue reading

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Pera Mo Palaguin Seminar on Aug. 15, 2015

Pera Mo Palaguin Mo Seminar on August 15, 2015 ay gaganapin sa aurumOne hotel, Makati. Ito Ang iyong gabay sa legal at tamang pamamaraan ng pagpapalago ng pera.


Wag Mag pahuli! Magparehistro na! Tumawag lamang sa  637.3741 o magtext sa 0917.863.2131.

Para sa karagdagang impormasyon tumungo lamang sa

See you there!



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Pera Mo Palaguin Mo! Public-service Radio Program

Makinig, Magtanong at Matutong magpalago! sa DZXL558-Pera Mo Palaguin Mo







Pera Mo, Palaguin Mo! Radio Public-service program is hosted by Francisco J. Colayco and co- hosted by Mr. Armand Bengco. The show is an hour long learning program that focuses on the 5 fianancial activities of an individual(earning, planning, saving, investing, spending).

Pera Mo Palaguin Mo! airs every Monday 11:00am – 12:00nn in Radio Mindanao Network’s DZXL558.

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Your Bank Should Be Helping You

Many times, when you go to the bank, you are intimidated or forced to do something that you don’t really want to do. One type of force is not to be able to do the transaction you want to do because you are afraid or shy or any other reason.

This is usually the case when you don’t really have much money. You want to go to the bank but you are afraid that you will be turned away. In such cases, you are probably better off going to the smaller savings or rural banks within your community.

The other type of force is when you are convinced to do transactions that you don’t really need. If you have some money, this is what could happen to you since the bank people know you have money and they can offer you all kinds of bank products. If your assets are considerable, you should choose a bank that has many products that you can choose from. However, be very careful that you are not in a situation that the banker is actually able to “sales talk” you into products that is not best for you.

Actually, part of your banker’s job is to sell the products of the bank. These products of the banks include deposits and other services for which the bank earns income. For clients who have the right requirements for loans, bankers are always eager to provide the service. The bankers get good bonuses if they are able to convince their clients to use the bank and it’s products.

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Hounded by Credit Card Collection

by: Francisco J. Colayco

*first appeared on Good News Pilipinas on December 2, 2013

Many are now preparing for Christmas and it scares me how many people are so deep in credit card debt. The narration of the story of JP is already something that I am sure many of our readers will want to pay attention to.

There are so many like JP who come to ask for advice. JP thought I was a lawyer and gave many details that it will take two articles just to cover her story. I removed the names of the banks and the people she named. My advice will already be in Part 3.

“Have read your article on the internet, CREDIT CARD DEBT which was published last July 22, 2008. I would like to seek an assistance po sana sa inyo, same as others I’m also a credit card defaulter. Honestly speaking I have 11 credit cards now out of 11, 3 cards are now on AMNESTY PROGRAM but remaining are over due and now under the COLLECTION AGENCIES.

Bacause I’m the breadwinner and my husband is unemployed for about 1 yr and a half, gipit na gipit po kami financially kaya di po ako nakakapag-settle ng mga CREDIT CARD AND LOAN OBLIGATIONS ko. As I have signed a contract/promissory note for 3 AMNESTY PROGRAMS, natatakot po ako na makasuhan kasi di ko po na-meet ung monthly dues na dapat bayaran dahil sa insufficient funds though nakakapagsettle naman po ako kahit papano para at least eh maging updated yung mga accounts ko at makita ng banks na I’m willing to pay my obligations un nga lang eh di ko na-meet ung dapat because of short funds.

Other cards that I have po are the following:

  1. ABC Bank (2 credit cards), I’m afraid po kasi as per agent before these were already cancelled and they will file legal case against me kasi di ko po nabayaran yung dues ko. Although, nag-offer po sila sakin before ng RESTRUCTURING PROGRAM eh di ko naman po kayang bayaran ung minimum dues na pinapasettle sakin dahil sa kakulangan po sa pera. (Ako po kasi ang gumagastos sa lahat sa bahay, and I have a 6month old baby kaya kulang po talaga ang 4,000-5,000 (range) na sahod ko 15th and 30th).
  2. DEF Bank (credit card and pre-approved loan), as per their DEF Bank Manager pag di ko po sya na-settle (minimum dues 7,000) until tomorrow eh they will file a case against me. Based po sa conversation namin over the phone, I will try po my best na makakuha ng funds pero about 40% lang kasi di ko naman po sure kung makakakuha talaga ako pero he’s not accepting my answer dapat daw eh 100% makakuha ako kundi eh i-note nya na i-abandoned ko na ung account ko na grounds for legal case. He will call me tomorrow for updates and he will not accept any excuses.
  3. GHI Bank (credit card) – now under JKL Collection Agency and as per text need to pay minimum dues in order for my account to qualify in the RESTRUCTURING PROGRAM. Gusto ko po i-grab ung program un lang po eh wala po akong pera sa ngayon dahil kulang po itong sinsahod ko para sa pamilya ko.
  4. MNO (credit card and loan), now credit card is under COLLECTION DEPT while loan is under PQR LAW OFFICE though pinapabayaran lamang po ung minimum dues out of total dues eh di ko po kasi kayang bayaran sa ngayon (2,000card+2000loan) dahil nga po sa kakulangan sa pera at for endorsement na po ito sa legal meaning they will demand po ung full amount (loan).
  5. STU Bank still active po pero di pa po ako nakakabayad ng minimum dues dahil din po sa kakulangan sa pera.
  6. VWX BANK – with outstanding but not yet under collection dept.
  7. YZA loan – under BCD Collection Agency and need to update my account.

Sana naman po eh matulungan nyo po ako sa problems ko both in credit cards and loans dahil sobrang hirap na hirap na po ako mentally, physically and morally. Everyday they (collection agents) are calling me and asking for receipt of payment eh wala naman po akong magawa kasi ang totoo po eh wala po akong pera sa ngayon at di ko po kayang magbayad ng utang. Some agents naman po eh okay at courteous kausap pero some po eh talagang nag-threathen sakin. Nagsasabi na I’m not professional, na napakinabangan ko daw ung pera pero di ako marunong mgabayad, na nananakot na may personal visit sa office at sa bahay at Lawyer na lang ang kakausapin ko at di na BANK mismo. 7months na po akong natatakot, di makatulog ng maayos, may takot sa dibdib at para po bang and tingin sa sarili ay sobrang baba na dahil sa mga naranasan ko.

Hopefully po eh mabigyan nyo ko ng advise kung ano po ang dapat kong gawin.

Maraming salamat po, at naway ma-receive ko po ang response nyo soonest.

Want to know the answer? Click here to find out

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Kabutihan Kapag Kinakalat ang Puhunan

Simple lang naman ang paraan ng pamumuhunan sa mga MF at UITF. Bibili lang ng mga parte sa kanila. Pero nag-iiba-iba ang presyo ng mga parte bawat araw. Ang presyong ito ay nakasaad bilang Net Asset Value (NAV) ng bawat parte. Saka lang talaga kikita kapag ibinenta na ang mga parteng sa mas mataas na NAV kaysa sa pagkakabili. Nitong nakaraang limang taon, kung titingnan ang takbo ng mga magagaling na mutual funds, tumaas ang halaga ng equity funds ng 12 hanggang 19 porsiyento kada taon; ang balanced funds ay tumaas ng 10 hanggang 13 porsiyento kada taon; at ang bond funds ng 4 hanggang 9 porsiyento kada taon.

Kapag naglagak ka sa MF at UITF, mas mababawasan pa ang panganib ng pagkalugi kung ikakalat ang iyong puhunan. Huwag ilagay lahat sa iisang MF o UITF. Isa pa, pipiliin lang ang sampung pinakamaayos ang pagpapalakad at pinakamalaki ang kinikita. At kung malaki-laki rin lang ang pera, ilagak ito sa iba’t ibang klaseng funds. Halimbawa, imbes na ilagay lahat sa isang equity, o fixed-income o balanced funds, hati-hatiin ito — ang isang bahagi ay ilagay sa equities, ang isang bahagi sa fixed-income funds at ang natitirang bahagi sa balanced funds.

Ang UITF ay bago pa lang sa Pilipinas. Pinatatakbo ito ng isang trust institution, na kadalasa’y isang bangkong may trust license. Hindi lahat bangko ay may ganitong lisensiya. Pinalitan ng UITF ang Common Trust Funds (CTF) alinsunod sa mga patakaran sa ibang bansa. Kaya nga wala na ngayong CTF.

Ang mga trust company ay hindi talaga bahagi ng bangko, kaya ang UITF ay hindi itinuturing na “produkto ng deposito” at sa gayo’y hindi ginagarantiyahan ng Philippine Deposit Insurance Corporation (PDIC).

Ang kinikita lang ng mga trust company ay ang bayad sa paghawak at pamumuhunan nila ng pera, kaya’t obligasyon nilang ibigay sa kanilang mga kliyente lahat ng kinita ng pondo. Kaya nga kadalasan, mas mainam pang maglagak ka ng pera sa trust fund kaysa sa savings account o time deposit sa bangko.

Bisitahin ang para sa schedule ng aming mge seminar!

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