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6 Top Reasons Why Pinoys Find It Difficult to Save Money from John

Thursday, December 1, 2016
Hi everyone! Today we have an amazing article from our SavingsPinay Guest Blogger of the Month

Two weeks ago I received an excellent article from John Sulit that I know most of SavingsPinay readers will enjoy. Now that we are in the last month of the current year it is recommended to take time and reflect on our spending habits once and for all. This article sent by John from iMoney Philippines will help up understand why most, if not all, Pinoys find it difficult to save money. Comment below and share your thoughts if you agree in any of the item John mentioned.

Hope you enjoy the post that John wrote for us!


A lot of Filipinos think that saving is difficult because it requires huge budget cuts. When you say savings, you automatically think of economizing, and not being able to fully enjoy your hard-earned money. However, it’s just a matter of having nerves of steel to save money automatically, and then reaping the rewards in the future. Admittedly, it’s not as easy as it sounds. Especially when you have all these things to factor in.

1. No money to save

As reported by the Philippine Statistics Authority last year, there are approximately 12 million Filipinos living below the poverty line. When you have no money to spend, naturally, you have no money to save. A large percentage of Filipinos are unemployed or living in poverty. Those who are employed and earning money are not earning enough to even have money left to save. 

2. Delaying saving

How many of you tell yourselves to start saving money, but then that day comes and you just shrug it off and postpone it to the next payday? You do this every time there’s an emergency that you need to pay for, or there’s a new product that you absolutely must have. Before you know it, a whole year has already passed by and still zero savings!

3. Bad spending habits

When you have money, you usually spend it extravagantly on yourself and your family. After all, that’s the reward of all your hard work. In just a matter of days, all the money that you have left just goes to pay your bills, with no extra to go to your savings account.
You use whatever cash you have left to pay off existing loans and your growing credit card debt. And then when that’s settled, you feel comfortable enough to start using your EastWest credit card again. You even apply for a new personal loan so that you can purchase those things you were not able to purchase before because you were paying off your debts. 

4. The need to help family and friends

The Filipino is all about the family. You work hard to provide a good home for your loved ones, send your kids to good schools, and make sure they have a pretty comfortable existence. 

But this amount of love and care also extends to your parents, siblings, cousins, nephews, and nieces, and even your goddaughters and godsons. When a family member is struggling financially, you will still take them in your care, even if you can no longer afford it. Because that’s just how Filipinos are; family always comes first.

5. Limited knowledge

When it comes to savings and investments, a lot of Filipinos lack education. Not everyone understands the different methods of money management, or ways you can invest your money, or how the banking sector works. Most Filipinos who don’t speak or understand English also have a hard time understanding bank terms and conditions and other complicated banking services and concepts.

Consequently, you end up just receiving your paychecks without exploring how else you can make your money grow. Oftentimes, you are intimidated by or scared of investments because of your impression that it’s only for wealthy people, or for people who are experienced in finance and money management. You get intimidated by figures too complex to learn and financial jargon too confusing to remember. 

6. Having no financial plan

When there’s no financial plan in place, there is no urgency to save money. You will not be forced to take a portion of your income to build an emergency fund because you don’t have an emergency fund to begin with. Most likely, the only financial plan that you have is to receive your salary every payday, settle your bills, and pay off some of your debts.

Stop scratching your head trying to figure out how your bill accumulated so much, instead start doing something about it with these strategies on how to pay off your credit card debt and get out of that financial slump as soon as you can.

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About the Blogger

John is from iMoney Philippinesa financial comparison website that caters primarily to the Philippine market. It lets consumers find and compare various financial and consumer products like credit cards, mortgages, fixed deposit, broadband, and insurance policies. You can also go to their Learning Center for similar helpful finance articles

Final Words from SavingsPinay

Thank you so much John for making this wonderful post. I know you've shared some valuable information to all SavingsPinay readers too. To anyone who'd like to submit a guestpost you just like John you can send me an email at izzaglinofull@gmail.com or message me via SavingsPinay Facebook Group.



Why I Closed my BPI Save-Up Automatic Savings + Insurance Account and How To Do It

Wednesday, November 23, 2016
Two years ago I opened my BPI Direct Save-Up plus Insurance account to kick-start my emergency fund. I have featured it in a first impression review as soon as I received my Info Card in February 2014 and a blog update in October 2014. Just like the others I got really excited with the word "insurance" alongside this particular savings account from BPI. I believe everyone would love to save and to get insured at the same time. But last November 4 I decided to deactivate or cancel my BPI Save-Up plus Insurance account.


Quick Review

The BPI Save-Up Automatic Savings + Insurance is a product of BPI. With this account you can:
  • Save without any initial deposit.
  • Easy enrollment via BPI Express Online. No need to go to nearest BPI branch and present your IDs.
  • Enable automatic deposit to your Save-Up account. Decide how much you want to save per payday or every month and it will be transferred from your savings account to your Save-Up account automatically.
  • Secure your savings without the ability to withdraw on your account. Instead of a Debit or ATM you will be given an Info Card which serves as your proof identification in case you'll be needing the insurance.
  • Earn interest rate of .500% per annum.
  • Monitor your BPI Save-Up Automatic Savings + Insurance online at www.bpiexpressonline.com. You will see your account real-time together with the rest of you BPI accounts.
  • Get FREE Life Insurance. As I mentioned in my BPI-Direct Save-Up + Insurance First Impression Review this is the main reason why I enrolled for the account. The insurance makes your savings more than just the usual savings account. The amount of your coverage is equal to as much as 10x your account balance. 
  • Basic Life : 5X the account’s average Month-to-Date Average Daily Balance (MTD-ADB) of the past three calendar months with a maximum amount of P2,000,000 regardless of the number of accounts opened by the insured individual.
Meaning if your account balance is 100,000 for the past three calendar months you will get 500,000 basic life insurance.
Accidental Death: Additional 5X the account’s average Month-to-Date Average Daily Balance (MTD-ADB) of the past three calendar months up to P2,000,000 regardless of the number of accounts opened by the insured individual.
Meaning if your basic life insurance costs 500,000pesos then it will gain additional 5x the accounts MTD-ADB making you have almost 1million worth of insurance for accidental death.
Accidental Dismemberment: 5X the account’s average Month-to-Date Average Daily Balance (MTD-ADB) of the past three calendar months with a maximum amount of P2,000,000 independent of the number of accounts opened by the insured individual.
Meaning if your account balance is 100,000 for the past three calendar months you will get 500,000 basic life insurance.
Now with the above benefits and information you may wonder why I chose to close my BPI Save-Up Automatic Savings + Insurance account. Let me tell you that it wasn't an easy decision to be honest. I consider this account as one of the best ever because your savings comes with an insurance already. No other bank can give such advantage. But with sudden change in my situation, priorities and goals I decided it is time to bid goodbye to the account. 

Bye BPI Save-Up!!! :(
Why I Closed my BPI Save-Up Automatic Savings

Reason #1. Switch of payroll account

When I opened my BPI Save-Up Automatic Savings + Insurance account I was still working as a SEO Content Writer (January 2014). My ex-company use BPI for payroll account so opening the account is very easy as well as managing how much and how frequent I want to save. Now in my current job (got hired February 2014) we use Metrobank for payroll account so if I need to deposit monthly to my BPI in order to fund my BPI Save-Up Automatic Savings + Insurance account. It was too much of a hassle for me to be honest.

Reason #2. Lack of fund to sustain the account

Now because I switched bank account I have no means to sustain my BPI Save-Up account. Also the process it takes to fund the account is very stressful. First I need to withdraw from Metrobank  then deposit to my BPI account.  And let me tell you how the "automation" became a negative on my situation. I chose to be deducted 500pesos every 6th and 21st of the month automatically. This will not change unless you informed BPI. Now my current payroll is every 15th and 30th which is very different from my previous company. The situation became really chaotic because I don't know how to maintain my Save-Up account anymore. READ: All About Metrobank Direct Online Banking
 
Reason #3. Too much bank accounts

Another reason why I decided to cancel my account is to once and for all get my finances in order. Too much bank accounts is not helping me at all. I have two Metrobank Savings Account, one BPI Savings Account and the Save-Up Automatic + Insurance Account. I realized that I'm fine with just the Metrobank and the BPI Express savings.

Metrobank Debit #1 is my payroll account. I also use this to pay for my FAMI-SALEF account. 

Metrobank Debit #2 is my new emergency fund account. I automatically transfer a portion of my income monthly to this account from my payroll. The amount I have in this account even exceeded what I have in my BPI Save-Up Automatic + Insurance. 

BPI Savings Account is my dedicated bank account for extra income. Any money from event hosting or freelance writing I do is deposited to this account. You can read more information about this in my recent Monthly Quick Recap + Extra Income Report.

I thing these three bank accounts work hand-in-hand to give me a much secured financial situation. Now I don't have to be guilty that I am not saving enough. 

Reason #4. Investing my money is my current priority

Now that I'm done paying first year of my St. Peter Life Plan I am already entitled to a term life insurance as well as accidental death and dismemberment benefit from the company. READ HERE to know more. With this plus my Metrobank Debit #2 for new Emergency Fund and BPI Savings Account for Extra Income I am more than willing to invest on direct stock market next. I am still young and able so growing my money through proper investing is what I am prepared to do.

Pic I took when I received my BPI Save-Up Info Card

How to Close Your BPI Save-Up plus Insurance account?

I was surprised on how fast and easy closing a BPI Save-Up Automatic Savings + Insurance can be. It took me less than five minutes of explanation to a phone banker. Below is the step-by-step process I took plus additional information you need to know.
  1. Call the BPI Hotline 89-100. After the voice message press "0" so you'll be directed to a phone banker.
Note: I called around 5pm on a Friday and I still got to talk to someone on the phone. You can call anytime, any day to get your account closed.
  1. The phone banker will ask your personal information as well as your BPI Save-Up Automatic Savings + Insurance  account number. He/She will also ask you how much your current money on the account is for further verification.
Note: You don't need your Info Card to close your account. You can easily see your BPI Save-Up Automatic Savings + Insurance account number when you access your BPI Express Online account.
  1. Now tell the phone banker that you wish to close your BPI Save-Up Automatic Savings + Insurance account. He/She will then explain to you how the process goes.
    • It will take five working days for your Save-Up account to be closed. In my experience I called on a Friday and my account is already closed the following Monday. Your Save-Up account will disappear in your BPI Express Online dashboard.
    • Before they cancel your account you need to transfer whatever amount you have in your BPI Save-Up Automatic Savings + Insurance to your regular BPI Savings Account. This means you have to zero out your Save-Up account. Note: Whatever money you have in your BPI Save-Up Automatic Savings + Insurance will be automatically transferred to the BPI Savings Account you used in opening your Save-Up account upon cancellation. 
Things That I Learned

On my last update I mentioned how I learned the importance of automatic saving. I still do the automation on my new emergency fund. This is the main learning and habit that opening BPI Direct Save-Up brought in my financial life. I realized that automation is the real king.

Saving for an emergency fund does not rely on the bank account you use. Your commitment is the one that plays a big factor for you to build an emergency fund successfully.

The word "insurance" can be very enticing but in case the account doesn't work for you don't be afraid to close it and move on. The most important thing is that you have financial peace in your life.

Additional Information
  1. Every month your BPI Save-Up Automatic Savings + Insurance is not within the minimum balance you will be deducted an amount of 200pesos. Minimum maintaining balance is 1,000pesos.
  2. You can still apply for a BPI Save-Up Automatic Savings + Insurance even if you closed your first account. I'm not closing my doors to the account at all. Maybe in the future I will open a new one.
  3. You can also do the same step-by-step process in case you wish to change only the amount of automatic savings you input or the frequency of automation. For example upon opening the account you decided to automatically transfer 1,000pesos every 25th of the month. Now you want to you want to increase or to decrease the amount of money you save or the date when your savings is automatically deducted. All you have to do is call the BPI Hotline and talk to the phone banker.
  4. You don't have to go to BPI branch for closing your account and no need to prepare any other document.
Final Words from SavingsPinay

My decision to close my BPI Direct Save-Up may come as a surprise to some of you. I do still consider opening the BPI Direct Save-Up plus Insurance as one of my big financial decision and I'm glad I did it. The account may work wonder for some but at the moment I don't see any reason to continue it. Assess your financial situation right now and if something is not working don't be afraid to resolve it. Let me know your experience with BPI Direct Save-Up plus Insurance account and whether you successfully built an emergency fund with it. :)

Related Articles:




What can you say about my decision to close my BPI Save-Up Automatic Savings + Insurance account? 
Do you think I made the right decision? 
How's your savings so far??

How Do You Picture Your Retirement Age?

Friday, November 11, 2016
Last October 15 I got invited to attend the “Female Network Let’s Talk about Financial Freedom” event. It was an afternoon filled with wisdom in the area of personal finance. One particular question that left me hanging was raised by Ms. Patty Aguirre of Integra Financials, one of our speakers during the forum. She asked this question to us, “How Do You Picture Your Retirement Age?”


Retirement is a topic I have never really gotten too deep here in SavingsPinay. I feel like I am not the right person to discuss it especially since I’m only 22.  But when Ms. Patty raised that question it deeply resonated in me. I think there’s no better time to plan for your retirement than now.

Three Truths, One Life

There are three things we can never avoid in our Earthly life. It is the risk of getting sick, the risk of living too long and the risk of dying young. These three essential truths is the reason why you should think about your financial future more. Are you financially prepared if you or someone from your family got seriously ill? Who would take care of you when you get old? Does your family (or your future family) ready in case you will die today. The whole thing sounds crazy and morbid, I know, but it is part of human life.

Let’s go back to Ms. Patty’s question, how do you picture your retirement age? For me retirement isn’t just about “not working” anymore. Retirement mirrors my declaration to be a financially independent Pinay. I want to live life financially free where I am able to live sufficiently without worrying about tomorrow. It is something I really want, I am willing to continuously work for and build my own system to succeed.

But the sad thing is only a handful of Filipinos think (and plan) about their retirement. Why?

1. Thinking “Nariyan naman ang mga anak/kamag-anak ko”

It is a very common mindset among Filipino parents to pass on the obligation to their respective children as a form of payment for their sacrifice. I believe that retirement is each and every one’s duty. Remember that your child is neither your retirement plan nor your investment. If ever they want to give back to you through monetary blessing it should be because of love and not out of desperation. Your child will have a family of his/her own and will have to plan too for his/her own retirement.

2. Thinking “May SSS/GSIS naman ako”

Do you know how little you’ll get as an SSS Pension holder? I was surprised when I learned that my dad will only get 4,000pesos a month as partial disability allowance when he had contributed almost half of his life in SSS. The truth is SSS contribution earns at very low interest rate which makes your benefits limited too. If you believe that your SSS/GSIS is enough to supply your retirement then you are bound for a big financial loop hole. You may live with 10,000 monthly today but 10 years from now that same amount won’t be enough anymore. You can't entrust your retirement fund to government-issued policies like SSS, GSIS (for government workers), PhilHealth and PAG-Ibig. You won't survive with the inflation rate and the cost of living. Thus, the monthly pension you will get from the retirement program may not be enough to support your needs and your family’s needs.

3. Thinking “Bata pa naman ako, tsaka na lang”

Postponing your retirement fund time and time again is a bad attitude. It is way better to save for your future now that you are young and able rather than spend your retirement age poor. If you are 40 today and want to retire at 60, you will only have 20 years to save and invest. This means setting aside 40-45% of your income to accumulate enough retirement fund. I don’t know about you but saving 45% of income at age 40 when you already have a family of your own isn’t that feasible at all.

The Correct Retirement Mindset

Retirement success varies from person to person. Some want to retire young, others want at the usual 60 while most have to postpone their retirement because of lack of fund. Retirement is a huge life changer both financially and emotionally. It doesn’t end when you hit the age you want or when you filled out all the necessary forms to retire. It’s not just about stopping your current work or career but living the rest of your life in purpose and stability.

The right retirement mindset is simply visualizing it. Picture how your retirement is going to be. Talk about it with your spouse or loved one or even yourself. Set your mind and heart to the idea of retirement. Once you have successfully visualized it you’ll be able to take down notes on actionable items to make it happen. A successful retirement entails a plan to spend not just your money but also your time.

Smart Moves for a Better Retirement Picture

Our financial habits today can affect how we will retire tomorrow. So if you have pictured almost an impossible retirement life then you need to work hard today to make it possible.  Below are smart retirement moves you can do today to retire well in the future.

1. Determine the age you want to retire.

Again it’s all about the vision. Ask yourself when you plan to retire. This will enable you to calculate the lifestyle you’ll live during your golden years and how much money you need to save today.

2. Fund your retirement today.

From my post the Different Saving Fund You Should Own, I’ve mentioned Retirement as part of what you should include in your financial planning. You will never be young forever so you better start thinking about your retirement too. A lot may ask what age a retirement fund should be started and the definite answer would be ASAP. Saving for your retirement now will enable you to enjoy your harvest season sooner. The earlier you start the more chances that your money will grow. Start by saving money on a monthly, quarterly or yearly basis. Commit to a certain amount you can fund. Then add whenever you are financially equipped. If you want to retire happy you need to start saving accordingly.

3. Maximize your money by investing.

Work hard, save, invest and repeat --- this my friends is the early retirement strategy. Once your paycheck comes, pay yourself first and foremost. Saving your income will get you started right away. Next you want to maximize your savings by investing. Investing is the sure way you make your money work for you and not the other way around.

To date, there are a number of investment vehicles you can choose from. From direct investing to stocks to indirect investments like mutual fund, Variable Universal Life (VUL) or Unit Linked Products (ULP). Saving alone will not get you to where you want to be 10-20 years from now. Don’t be afraid to invest for it’s the best way you can do to maximize your money’s growth potential.

Repeat the first two steps until you achieved your desired portfolio or you have more than enough money to outlast you.

4. Diversify your assets

Diversify your investments. Diversification is a financial technique that reduce the risk factor of investing by allocating your investments to different financial vehicles, industries, institutions or other varied categories. In other words, don’t put all your eggs in one basket. 

5. Consult expert advice

Ask questions and seek help if you must. Retirement is a big deal and consulting a financial advisor to examine your retirement goals can be very beneficial on your side. They can help you in the following areas:

  • Spending – Financial advisor will help you understand your current situation and work out on your current income and expenses. They will help you fix your budget and make it work for you.

  • To Borrow or Not? – Most of my readers will private message me when it comes to debt and honestly I feel like I’m not that equipped to answer your question. Experienced financial advisors are the way to go for a much preferred debt-payment method. They can help you make the toughest decisions that could set you free from debt.

  • Investing – Financial advisors will work out your investment profile. They will assess what type of investor you are and the type of investment that’s perfect for your need. Reading blogs and financial books are great tools of knowledge but there’s something about personal appearance and communication that makes you want to learn more.

  • Get Insured– Insurance are critical to build a strong financial foundation. A good advisor will highly recommend getting your assets insured and protected. It all boils down to the three truths mentioned earlier so you need proper protection to solidify your financial plan. Imagine this scenario: If you get hospitalized or get “taken out of picture”, your retirement fund will be used entirely. But what will happen next? How will your family survive or ensure that your children’s education will continue? Insurances policies like healthcare, life, accident and disability are investments too that you need to consider.

  • Planning – The role of a financial advisor is to help you generate wealth necessary for your successful retirement. They will offer help as you plan your goals in life. If you have questions from how to start and where to start, their passion can direct you.

Choose your financial advisor wisely! Ask questions and see if the answers and advice that they give really satisfies you. Choose someone who can understand how you picture your retirement will be and can suggest the possible next set of actions to get you to where you want to be.

Final Notes from SavingsPinay

That question “How Do You Picture Your Retirement Age?” really brought a lot of thinking on my part. I’m glad that I was there to attend the event. Retirement is a huge thing and it is something we must plan way ahead of time. If you are determined to start the New Year right consult a financial advisor today who can help you with the step-by-step process. Who can offer you their time, knowledge, research tools, expertise and experience you and I may not have when it comes to retirement planning.

For expert financial advice you can contact Ms. Patty from Integra Financials at patriciamarie-o.aguirre@philamlife.com.ph or quickly give a call  at 521-6300 local 4462.

In case you are shy to Ms. Patty no worries you can email me instead at izzaglinofull@gmail.com or the contact form below and I'll forward your question to her. As much as I love personal finance I know Ms. Patty's "the real expert" when it comes to investment and retirement planning.

How about you? How Do You Picture Your Retirement Age?