Financial (Il)literacy In The Philippines

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Juan and Maria

Juan is a graduate of a prestigious school. He worked hard and got good grades so he can get a safe and secure high paying job. In fact, he got hired in this safe and secure high paying job in a big company. After happily receiving his first paycheck, he then took a car loan from a bank to buy the luxury dream car that he has been longing for. Not only that, he joined some clubs where his “rich” pals hang out, bought some golf clubs and other “finer things in life” on credit.After all, he deserves it. Knowing his debt is mounting, he works very hard, took overtimes and got promoted so that he’ll receive big chunks of paycheck after paycheck to maintain his “rich” and high consumption lifestyle.

Then one day, Juan met Maria who was also working at the same big company. It was love at first sight. They went out for a couple of dates and have fallen in love with one another. They then decided to get married and after doing so, the couple took a house loan from a bank and moved into their dream home. Also, both of them took car loans to suit their new lifestyle. It’s great because, with their combined income, they are “rich.” They then bought expensive furniture, appliances and consumer goods, again, on credit to compliment their new home. Until one day, Maria was told by the doctor that she was pregnant. Juan then convinced Maria to resign from her job to take care of things in the house and the upcoming baby. Both Juan and Maria realized that their cost of living is rising. With all the debt and expenses to pay, Juan works very hard. After 1 year, they have another baby. Juan has to work twice as hard because he has 4 mouths to feed, a mountain of debt to pay and consumer products and services to spend on. Then his company experienced a downturn and, eventually, filed for bankruptcy. So that leaves Juan jobless and broke. He is already 35 years old by this time and will really have a hard time finding a job because younger applicants with better skills make him obsolete. He tried starting a small business and failed because he didn’t have the financial mindset and skills to make it work. You can imagine the stress and sleepless nights Juan had to face. One day, Juan droved to a quiet beach. In the driver seat, he took out his .45 Automatic Colt Pistol, pointed the barrel towards the insides of his mouth, said a short prayer and, finally, took himself out of misery leaving Maria and his two kids to face the financial mess they are in.

The Problem

Majority of people may not be facing exactly the same situation Juan and Maria are having but it’s exactly the same financial mess majority of people are facing. It’s a fact that majority of Filipinos are employees, deep into debt and just 2 or even 1 paycheck away from economic turmoil. A lot of us subscribe to the illusion that our employers, the government and, even, our children will take care of us. That’s why a lot of people go to school, enroll themselves to popular courses such as nursing, get good grades and get a diploma to have a safe and secure high paying job. Nurses, engineers, and teachers then become OFWs and earn a living outside the country to get tons of cash. Though a lot of Filipinos earn a lot outside the country, majority don’t have the financial training or education to manage and make those hard earned cash work hard for them. In other words, it’s not money that makes rich people rich but financial skills. It’s a vicious cycle of people going out to earn, going back to spend and going outside again to earn more. Until when?

Financial education gives us the ability to manage our finances effectively and efficiently so that instead of us working hard, our money works hard for us and we can then live a quality life with more options. Frankly, the Philippines school system is, in a big part, responsible of the financial turmoil we’re in. Aside from being the most corrupt sector, it doesn’t provide the Filipino student the competency to lead his financial future. A lot of people believe that our school system is capable of preparing them in the “real world.” Subscribing to the illusion that hard work is just what’s needed to be successful is financial suicide. Schools need to be in touch with reality and one of the reality it needs to face is the reality that Filipinos today are smart, hardworking but poor because majority are financially illiterate. Financial education today is no longer optional but a ticket for survival and, ultimately, life success and significance.

My Action Steps

Being able to understand that becoming financially literate is a need, I joined a renowned global network marketing company in order to have a vehicle for financial independence, be surrounded by like minded people who don’t want to be stuck in the rat race, learn the ropes of becoming financially independent and be provided with the teachings, coaching and assistance of mentors and relevant materials. I read books on financial literacy and I highly recommend the books of a renowned personal finance educator Robert Kiyosaki who has helped millions in their quest for financial freedom. Also, I am very careful with the people I associate with. As the old saying goes, “birds of the same feather flock together.” I surround myself with like minded people who are ambitious and are serious with their financial future. To be rich is more than just about accumulating wealth. It’s about having a certain mindset, an expanding attitude and a set of core values that drives you to become and to act as a winner. If it takes giving up school altogether to get real education and be grounded with reality then so be it. For after all, your banker doesn’t need your report card.

In The Final Analysis

Financial education is a need in order to live a life of success and significance. For after all, you can’t give to charity institutions when you’re a charitable case yourself. Hard work is never enough. There’s a need to work smart and have our money work hard for us, instead. Schools ought to understand that if it wants to prepare its students to the “real world”. Yet, do you really expect them to do so?

Additional Readings:

Rich Dad, Poor Dad by Robert Kiyosaki

Cashflow Quadrant by Robert Kiyosaki

https://www.richdad.com/