Money Smarts

What OFWs need to do

2009-11-13T09:44:31Z

WHILE ON a recent trip to Japan, I heard a story about an OFW driver who nearly wasted away his earnings. He worked in Japan for close to 30 years, and at one point was earning an equivalent of P400,000 a month with overtime pay. He had a wife and child back home in the Philippines and was able to send his child to school. However, he was always out drinking at bars in expensive Tokyo while having several relationships with other women. "Puro good time," they say.

Well the guy wasnât able to hold on to his job due to his drinking problem. His employer asked him to resign, and he was given an equivalent of P2 million as separation pay.

His Filipino friends could only shake their heads in disbelief at how he wasted away the opportunity to have a well-paying job, and how he was not able to save any money to make his life better. Last they heard, he was back home, bought himself a tricycle which he drives for a living, and is staying with his parents since he could not afford to buy a house of his own.

]]> Filipinos who leave the country to work overseas do so to earn more money in order to help support their families back home. However, not every OFW gets to lay out a stable financial future.

The problem, says Raul D. Dimayuga, senior vice-president and head of the global remittance division of the Bank of the Philippine Islands, is âinitially a lack of awareness of what to do. For many of [OFWs], it is the first time that they are able to receive a larger amount of money than what they used to and if they are not properly advised, they would tend to use the funds for consumption.â

This is why BPI has embarked on providing a financial literacy program to its clients, especially OFWs and their beneficiaries. It has conducted the BPInoy Learning Series caravans in Iloilo, Cavite, Dumaguete, Davao, and most recently, in Cebu, and Cagayan de Oro, among others. The series seeks to show that financial control is possible even away from home. By using interactive modules, participants are taught how to save, invest and make use of available technology to do banking transactions. BPI services and products designed specifically for the global Filipino are also introduced, such as the BPInoy Remittance, BPInoy Savings Account, BPInoy Save-up (build up savings account with free life insurance), BPInoy loan products, and Credit Card.

Dimayuga says these are the basics that an OFW must have to be on the road to financial stability:

1. An account for himself separate from that of his beneficiary. âThis way he is able to segregate his savings from his transactional account, i.e., funds needed by his beneficiary for day-to-day expenses.â

2. A plan for himself in terms of how much to save and set aside as budget for the family expenses which he agrees on with his beneficiary. âThis way his plans are aligned with that of his family and the road to financial stability becomes a family affair. Ideally, he should be saving between 10 to 20 percent of his monthly income.â

3. An investment plan.

âOverseas Filipinos contribute substantially to our countryâs growing economy. As a bank, we want to provide financial education to empower our global Filipinos to fulfill their dreams that fueled their decision to go abroad,â adds Teresita B. Tan, head of overseas banking and channel services group of BPI.

Should you get insurance coverage for acts of God?

2009-11-04T08:48:46Z

THE AMATEUR video taken at the UERM parking lot during the height of typhoon Ondoy showed what happens to cars when flood gets to them: they float and bump into each other, and become heavily damaged.

The flood was considered by insurance companies as an act of God, and those without coverage for it sadly could not claim for damages.

We asked Arthur L. Panganiban, EVP/COO of Gotuaco,Del Rosario Insurance Brokers, Inc., an all-Filipino professional insurance broking and consulting firm in the Philippines, what this is all about and here is what he said.

Q What are considered acts of God? A An act of God is an act occasioned exclusively by forces of nature, uncontrolled and uninfluenced by human intervention and which is of such character that it could not have been prevented or escaped from by any amount of foresight or prudence. This is due to natural causes such as earthquake, typhoon, floods, volcanic eruptions and the like. If it might have been avoided by human prudence and foresight, it cannot be considered an act of God.

]]> Q Why is this not automatically covered in a standard comprehensive motorcar insurance policy? A A standard comprehensive motorcar insurance policy covers the following risks: 1. Physical damage due to normal vehicular accidents (collision of the unit with another vehicle or with property or to some extent, with a person); 2. Theft; and 3. Excess Third Party Liability Insurance for Bodily Injury and Property Damage (covers liability of the insured against third party claim for bodily injury and/or death and property damage)

A review of "General Exceptions" under Section IV: Excess Liability Insurance will even indicate that Acts of God is a standard exclusion under the motor car policy but has through the years evolved into an extension of cover (a buyback, if you may) that can be purchased for an additional premium.

Insurance has a statistical base and is dependent on the law of large numbers. Insurers will insure a large group of homogenous risks in order to predict losses with a reasonable degree of accuracy and to spread the loss evenly over the group. This likewise affects the pricing of insurance products.

Unfortunately in the Philippines, nobody buys flood cover unless they are in a flood prone area therefore resulting in a narrower pool for insurers. Acts of God cover therefore have not been made a standard cover under a motor car policy for this reason. However, it may be offered as an extension /rider to the motor policy for an additional premium.

Q Is this also part of non-life insurance for property/houses? A The main risks covered are fire and fire caused by lightning. Natural perils such as earthquake, typhoon and flood are available to clients as an extension to the fire insurance policy for an additional premium (under the term Allied Perils). The term "Acts of God" is not used under the fire insurance policy and is not treated as a group of coverages. Generally speaking, the specific natural perils such as those mentioned above that are covered, excluded from coverage, are listed, clearly stated and defined in the policy. Q Is it wise to get coverage for Acts of God? A Ultimately, you'll need to decide how much of a risk Acts of God are to you and your property, whether it be a house or a car. An additional P2,000 may suddenly make your car insurance seem expensive. However, having peace of mind that your insurer will take care of your problems, no matter what the cause of damage, can be very reassuring. It is prudent to consider the effects of global warming in the changing weather conditions in the Philippines now that it has become a reality.

Q Please comment on the increase in premium for Acts of God insurance coverage after Typhoon Ondoy. Is this justified? Why or why not? A Although reinsurers would disagree, Acts of God was not really considered by most Filipinos as a peril that we were exposed to until the likes of Typhoon Frank in 2008 which severely affected Iloilo and neighboring areas and now Ondoy directly affecting Metro Manila (understand that up to now, provinces directly affected by this typhoon have yet to make a complete recovery).

AOG cover was previously even extended for free by most insurers to unit owners. However, in the light of global warming and the possible future effects it will have on the Philippine weather conditions insurers have now agreed that it is a real peril which we are exposed to as a nation and should therefore be covered and priced appropriately.

At present there is a market consensus that AOG cover for motor shall be priced within the range of from 0.5% to 0.7% of the vehicle sum insured. If your vehicle was involved in the current Ondoy claim you will note that detailing alone for the car would cost somewhere from P5,000 to P10,000. There will be an additional expense to the insurer if they have to replace electrical wiring and the like damaged in the flood. With all these the cost to clients for an AOG cover will actually not be as expensive and will be justified. Total expenses for a unit completely submerged in typhoon floodwaters are estimated to amount to around P150,000. Often, it is a prudent decision to pay an additional premium than shoulder all the expense to restore a unit affected by a natural peril listed under Acts of God cover.

O my gulay

2009-10-12T10:37:44Z

WITH THE country reeling from a triple whammy calamity (flooding in the National Capital Region, flooding in Laguna, and flooding in northern Luzon), the last thing we would like to be hit with are price increases.

After Typhoon Ondoy unleashed its devastating effect, it was really kind of big business to lower prices. The day after the great flood, MRT charged only a flat rate of P10 regardless of whether oneâ€™s destination was near or far. Pan de Manila lowered the price of its pan de sal during the days after the deluge. Kalinisan Steam Laundry offered free laundry services to typhoon victims. Even SM malls and other malls waived the overnight fee for cars left in their carpark overnight when shoppers were stranded during the flooding.

So price increases after Typhoons Ondoy and Pepeng have left the country really leave a bad taste in the mouth.

Two days before Ondoy came, my insurance broker gave me a quotation for comprehensive auto insurance. It had two options: with acts of God and without acts of God coverage. Paperwork was not finished that week, and so we dealt with it the week after. Well, what do you know, the insurance companies increased the premium prices for coverage of acts of God, such that the revised quotation now had two columns: Before Ondoy and After Ondoy, resulting in a P700 increase in premium in barely a week!

Now comes news that vegetable prices have hit the roof as a result of low supply due to the calamity up north. Potatoes at P200/kilo, anyone? Sitaw at P120 per kilo?! O my gulay!

Filipino economist makes it in the global finance world

2009-09-25T02:03:59Z

HE may not be as famous (yet) as a rock star or top chef Cristeta Comerford (the Fil-Am chef at the White House), but Dr. Eli Remolona is at the top of his game. Currently the chief representative for Asia and the Pacific of the Bank for International Settlements (the central bank of central banks), Dr. Remolona is considered to be the most prominent Filipino economist in international monetary and financial policy circles. Based in Hong Kong, he deals with the 12 most important economies in the Asia-Pacific region.

For him, economics is a passion. He worked for the World Bank and the Federal Reserve Bank of New York, and taught at Columbia University, New York University, Stanford University, and the University of the Philippines. He finished his bachelor's degree in economics (honors program) at Ateneo de Manila University, his master's degree in economics at the University of Hawaii, and his doctoral degree in economics at Stanford.

He has authored a lot of papers on economic policies and international finance, including the famous Krugman Report, in which he wrote the chapter on monetary policy. For his outstanding achievement, Bank of the Philippine Islands awarded him last month the BPInoy Award for being an excellent example of how to "be Pinoy" even when working abroad. The other awardees were Comerford and painter Anita Magsaysay-Ho.

Having spent a good many years abroad, Dr. Remolona knows what challenges overseas Filipino workers face. "There is some discrimination in the world. You can't let it put you down. Deal with it. Move on. Do better," he said.

Money advice He also advised OFWs to open a bank account and send money home carefully so money will be spent wisely at home. "Be careful with money," he added. Money remittance is safer through banks rather than through informal channels.

Investing in retail treasury bonds

2009-09-21T01:30:30Z

IT USED to be that bonds were out of the reach of the small Pinoy investor. But that all changed when retail bonds were offered by both the government and the corporate world. Offering a higher interest rate than time deposits, retail bonds are quite popular given their minimum investment requirement. For retail treasury bonds (RTBs) offered by the national government, investors can invest with a minimum placement of P5,000 and in multiples of P5,000 thereafter. Retail corporate bonds vary in amount, depending on the issuer. Currently, the government is offering RTBs maturing in 2012 (3-year RTB), 2014 (5-year RTB), and 2016 (7-year RTB). The offering period started last September 15 and ends on September 22. Interest rates are as follows: 5.25percent for the 3-year RTB 6.25percent for the 5-year RTB 7 percent for the 7-year RTB Although the interest rates are lower than that of RTBs offered last year, the current batch to be issued on September 24 is enjoying good patronage. Interest will be subject to 20 percent withholding tax. Here are the reasons why someone should consider investing in RTBs, according to Ed Francisco, head of BDO Capital: 1. It's risk free. 2. The rate is much higher than leaving it in bank deposits. 3. You get automatic credit of interest every quarter to your bank account. 4. You are credited at maturity. 5. Should you need money before the RTB matures, you can sell it. There will be a ready market. 6. Some banks will allow you to borrow against your RTBs. 7. You can choose from various tenors, e.g., 3, 5 and 7 years. Since RTBs get “sold out” fast, those intending to invest should go to these banks and financial institutions before the offer period ends: BDO, BPI Capital, Development Bank of the Philippines, First Metro Development Corporation, Landbank, Metrobank, and RCBC. RTBs suit the conservative or beginning investor, but longtime investors with more experience also consider RTBs to diversify their portfolios.

Taxing texts

2009-09-09T10:09:54Z

By Karen Galarpe PRETTY SOON, you might want to think twice about sending that text message. On a committee level, a bill in Congress has been approved that will impose a 5-centavo tax on every text message, picture, audio and video file sent. See story here. The bill is not a law yet, but with the government standing to raise P20- to P36-billion a year from such a tax, it may look like the bill will be made into law, unless consumers make themselves heard. Now the question is: Will this tax raise the cost of text messaging to cellphone users? Lawmakers are still debating on it, with some quarters believing that it should be passed on to consumers, since it is an indirect tax. Others say telco providers can well pay for the tax themselves. If consumers will pay for the tax, that may lessen the amount of text messages sent every day in this texting nation. That hopefully means less scam messages from people who want free cellphone load. But we Filipinos love to connect, don't we, and may not mind texting away at P1.05 per text message. Are you in favor of the government taxing your text messages? Please share your thoughts.

Gypped by a relative

2009-09-01T11:43:49Z

SORRY TO start off your week with a couple of sad stories, but these stories beg to be told. Mind you, they are true stories, which happened here in Manila recently. Story 1 A widow in her sunset years has a small house and lot in her name. That is her only asset and it was given to her by her late husband. The widow entrusted the land title to her daughter for safekeeping, who kept it in her own home she shared with her husband. The husband has a good accounting practice and put up a small restaurant-bar. Over the years, the business did not prosper as expected. One day the widow received a document from the bank saying that her house and lot will be foreclosed. Without her knowledge, her son-in-law used the land title and forged her signature to get a loan from the bank. His wife did not know about it too. In the end, the widow had to vacate her own house. She then spent her remaining years renting a small home with her daughter, who by then had separated from her husband. She died penniless. Story 2 A young single mom in her 20s borrowed money from several relatives, saying she needed money for her son's tuition and other expenses. Concerned relatives extended help. At a family get-together, someone remarked that she saw the young woman at a mall the other day with a handsome man, and they were shopping. Then someone said she and her boyfriend are frequent casino visitors. One concerned relative brought up the matter to the young woman's own mother, who was shocked to hear the news. Confronted, the young woman owned up to the debts to other relatives, which ran up to six figures so far. Worse, the guilty young woman confessed that she is neck deep in debt, and that she doesn't know how to pay for the bank loan, which was secured by the family's land title. It turned out she forged the necessary signatures and was able to secure the loan without her parents' knowledge. The parents have started paying off their daughter's loans to relatives, and hope they will be able to pay off the bank loan. The mother has been crying and couldn't believe this has happened. Do you know where your documents are? These include land titles, certificates of time deposit and other forms of investment, and the like. If you don't know where they are, don't stop looking until you find them. Sometimes they can get into the wrong hands... right in your own home.

Avoid couple fights over money

2009-08-26T00:54:48Z

IT IS no secret that a lot of marital conflict is due to the way money is handled in the family. Sad, but true. At the recent “Money Sense Live! Family Finance 101” seminar organized by Learning Curve, Heinz Bulos, editor-in-chief of Money Sense magazine, says the reasons why couples fight over money include: * having different money personalities * valuing money in different ways * both parties wanting to take charge or one is clueless or not interested * both parties still live as if they're single * having difficulty trusting * being irresponsible Having different backgrounds may be the root cause of money fights, but the real root cause when you look into it is the lack of unity. Ambie Bulos, wife of Heinz, and a trainer, shares that couples should start thinking of themselves as “one unit.” She quotes Genesis 2:24 in the Bible, which says: “For this reason a man will leave his father and mother and be united to his wife, and they will become one flesh.” Thus, being of “one flesh” is being “one unit.” There are 4 C's to making money problems a thing of the past in marriage, according to Ambie: 1. Communicate. Understand where you're coming from. Share your dreams and goals. Ambie even recommends having a planning session every year just between husband and wife where money goals and plans will be discussed. Communicate regularly and openly. 2. Create. Plan together for the future. Divide money tasks. Whoever is good at handling money should be in charge. Merge your finances—this is for married couples only. Ambie warns singles not to go into having a joint account with a girlfriend or boyfriend. She also recommends that married couples have a joint account. Without it, wives may have a false sense of security, not knowing the state of the family's finances, or husbands may feel that they work and work and spend for everything, not knowing where the money goes. 3. Commit. Stick to your plan. Share sacrifices equally and enjoy privileges together. 4. Compromise. Sometimes things cannot be resolved. Agree to disagree. Find ways to compromise, such as giving each other an allowance which may be spent as one wants. Should conflict escalate and show no sign of being resolved, get professional help. In closing, Ambie says, “Money is not worth fighting about. Love one another. Think as one.”

Renewing your driver's license soon?

2009-08-20T00:01:52Z

IF YOU'RE due to renew your driver's license soon (which means your birthday is coming up—Happy birthday!), make sure you won't be charged an unnecessary late renewal fee. Carmen Dulguime went to the Land Transportation Office branch at the Ayala MRT last week, a few days before her birthday. After undergoing the drug test, she went to the cashier and was surprised to be charged an additional P75 as late renewal fee. She asked the cashier when she should have renewed her license. The cashier replied, “60 days po.” So she paid, but called the LTO the next day. Application for the renewal of driver's licenses, they said, is now allowed 60 days before the expiration. Carmen explained her case. The LTO realized that she was charged the late renewal fee by mistake. Reason: a computer glitch since the LTO computer system was being upgraded. Carmen's birthday was read by the old computer as January 1, 1980 even if her real birthday was indicated in her old driver's license. Too bad, the LTO cannot refund the P75. Carmen says, “The LTO's explanation is this: The money had already been in the 'kaha' and they cannot get it back anymore (huwaaaat? Can I help?). They said I can try going back to the cashier at Ayala MRT branch and ask her to give me back my P75 from her own pocket (huwaaat? again).” To LTO's credit, Ms. Dolores Basco of LTO called up Carmen personally, apologized, and said she alerted the various LTO branches so similar incidents will not happen again. But still, the matter of the P75 remaining in the kaha leaves many of us scratching our heads. If it will not be returned to Carmen, where will it go? How many Carmens have become victims of the glitch? Tsk tsk.

4 ways to fund your children's education

2009-08-11T00:13:57Z

By Karen Galarpe IT seemed like a scene from a scary movie: P30,000 per sem tuition now will become-- P111,000 per sem in 17 years at 8 percent increase per annum P152,000 per sem in 17 years at 10 percent increase per annum P206,000 per sem in 17 years at 12 percent increase per annum As Registered Financial Planner Alvin Tabanag continued on with his Powerpoint presentation at the recent Money Sense Live! Family Finance 101 seminar, the audience looked at him in disbelief when he said it may take P1 million to P2 million to get a child through college 15 years from now. That may be peanuts for the millionaires out there, but for the rest of us, that is a tall order. A very tall one. Clearly then, we must all save for our children's education, and the earlier we do so, the better. Just how to do that? Tabanag, personal money management coach, author of Kaya Mo Pinoy! 12 Steps to Build Wealth on Any Income, and founder of Pinoy Smart Savers, counts the ways: 1.Pay as you go. It's crossing the bridge when you get there. “A bad strategy since there is no guarantee that the parent will still be gainfully employed or earning income at that time,” said Tabanag. This may also lead to huge debts if that's the case. 2.Get an educational plan. Now educational plans are viewed with utmost suspicion since the industry is having problems. However, Tabanag said the industry is recovering. What really pulled the industry under was the sale of traditional educational plans since the 80s which promised payment of tuition fees in the future no matter what the cost may be. The unanticipated deregulation of tuition fees, the 1997 Asian financial crisis, and the lax enforcement and monitoring of government agencies adversely affected the trust fund earnings of the preneed companies offering traditional educational plans, and the rest, shall we say, is history. “The preneed industry, while troubled right now, will get better,” explained Tabanag, citing the recent SEC order requiring preneed companies to increase their trust fund deposits up to 70 percent. He further said saving for a child's education through a preneed education plan may be attractive to some because it is ideal for those on a tight budget, fits nicely to our “gives” mentality, is easy to understand, and forces us to save. Here are Tabanag's tips for those considering getting an educational plan: a. Buy only from big, reputable companies. b. Read the terms and conditions carefully. c.Compare rates of return. d.Buy the plan you can afford. 3.Save and invest on your own. Another strategy is do-it-yourself: Invest for the purpose of getting higher potential earnings. There is a risk involved, and this strategy requires discipline and regular monitoring. However, there is a wide array of investment choices available which can help you meet your goal. Examples of investment choices are long-term deposit accounts, government securities, stocks, and mutual funds or unit investment trust funds. 4.Use the mixed funding strategy. This simply means employing a combination of any 2 or all approaches. Whatever way you choose, start saving now.

Tips from a “reformed spending addict”

2009-08-05T02:27:38Z

WHEN one is single, one can pretty much live for the self. There's more money to go around to buy that new cellphone and that new pair of shoes, and to go out with the barkada for gimik nights. But when one starts a family, everything changes. Suddenly, there are responsibilities: mouths to feed, bills to pay, and future needs to prepare for. The days of frivolous spending are over. As financial journalist Salve Duplito, pioneer Money Smarts blogger, wife and mother of four said, “Motherhood made me realize that 'irresponsible with money' and 'good mother' don't go well together. As parents, it's up to us so the family won't get buried in debt.” This "spending addict" has reformed and is on a crusade to help others learn to handle their finances well. In her recent talk at the Family Finance 101 seminar organized by Money Sense magazine, Salve shared these basic tips to handling family finances responsibly: 1. Use things sparingly, carefully and thankfully. The things that we have and buy are blessings and should be used up wisely. Salve advised that kids (and dads) be trained to take care of their stuff well so they will last. She also believes in the “simot” mentality: Go through your pantry and use up what you can until your next scheduled grocery day. No emergency trips to the grocery to buy one missing ingredient because chances are you will buy more than just one ingredient. Also, don't overdelegate to the maids, who may not be conscious of saving. 2. Think long term. How much will a latte a day for a year cost you? It may be money better spent on tuition. Salve warned the audience against careless spending. Even buying a toy to shush up a wailing child may have long-term consequences in terms of finances. 3. Make smart plans. Salve's precious tips include: * Save 50 percent on transportation or gas weekly by being on time and planning trips wisely. * Watch where you buy. * A weekly meal plan can reduce food wastage to zero and cut your food expense by 40 percent. * Convenience and quick fixes are very expensive. 4. Be a wise consumer. Don't go to the grocery when you're hungry. Killing electric vampires can eliminate at least 25 percent of your electric bill. If you're a spend-a-holic, avoid going to the mall with cash and credit card. 5. Know your numbers. A spending plan is the foundation of financial wellness. Create and use one that works for you. Salve advised the audience to skim off the top—to take out from the paycheck once received—your savings before you spend on anything. Anticipate balloon expenses (such as tuition fees) by saving up for them. 6. Enjoy yourself. “Good money management is important but it should never go before family and relationship,” said Salve. She ended by asking the audience, “Can money buy happiness?” The answer is yes, she said, “but only when we learn to let go of it. It's not what we have that matters. It's what we can give.”

Run your household like a business

2009-08-01T03:00:25Z

WHEN personal finance coach Randell Tiongson asked the audience at the recent Money Sense Live's Family Finance 101 seminar how many have made decisions they regretted later on, a number of hands went up. Randell was quick to admit that he, too, has made bad decisions in the past. “People can be logical in business but illogical in the house,” he says. “At the end of the day, it's how we use money in the house that determines the quality of life. So treat your house like a business.” Randell explains this further: “The household is an enterprise that operates like a business.” For instance, households have revenues (your income) and non-discretionary costs (bills). It needs efficient use of cash flow and wise allocation of resources over time. A household has assets and liabilities which must be taken into account in planning out one's personal finances. Just like a business, the household calls for people to make logical decisions and promote efficient operations. To do that, here are some valuable tips he offered: 1. Money that comes in must be bigger than what comes out. 2. Be objective-oriented. 3. Observe the 20/20 rule: Prepare for retirement 20 years before you actually need to retire. 4. Come up with a budget. Don't take out wants; otherwise your budget will be like a New Year's resolution that doesn't get carried out. Prioritize needs. 5. Reduce consumer debt. “You can't even start investing if you have liabilities.” 6. Use the liquidity ratio. “If the ratio of your expenses to income is 85 to 90 percent, that is too high. The solution is not always to increase income.” 7. Set goals. 8. Use the integrated portfolio approach for financial decision making. Don't use emotions in financial planning, especially in investing. Wise words from a wise family man.

Goodbye vanishing cellphone load

2009-07-15T13:07:07Z

Karen Galarpe THANKS to a perplexed Senator Juan Ponce Enrile wondering where his cellphone load went (it was traced to unauthorized downloaded ring tones), cellphone charges have come under scrutiny. Prepaid cellphone users have in the past complained about being charged for promo texts and other unwanted stuff but no action was taken. So now the National Telecommunications Commission (NTC) is tripling the shelf life of prepaid cellphone load. Effective July 19, prepaid load will have the following shelf life: P10 to P50 load: 15 days more than P50 to P100: 30 days more than P100 to P250: 60 days more than P250 to P300: 75 days Text spam or unsolicited promo texts will also be banned, and this will take effect on July 23. Hip hip hooray! (Read news story here .) Now I wish the NTC will also look into prepaid broadband load charges. Smart Bro, for instance, charges P10 for every 30 minutes, but has a 30-minute block metering that seems disadvantageous to consumers. For instance, if you use your load from 2:00 to 2:20 p.m., consumption will be counted as 30 minutes. Then if you connect again from 2:31 to 2:41 p.m., that will be another 30 minutes shaved off the broadband load. Is there a way charging can be done by the minute, like they do with cellphones?

What kids can learn about money, according to age

2009-07-02T04:28:08Z

CHILDREN ARE like sponges; they generally absorb knowledge fast. Parents can take advantage of this wonderful time by teaching them about money early on. In Rich Kid Smart Kid, author Robert T. Kiyosaki wrote: “I am often asked, 'At what age should I start teaching my child about money?' My answer is, 'When your child becomes interested in money.'” Lifestyle trainer Chinkee Tan, author of the book Till Debt Do Us Part, shares that kids can be taught about money as early as four years old. “Here are the ages at which a child can start learning about money,” says Chinkee, “and the kinds of things he or she is probably able to learn at that stage: Ages 4-5: What Money Does and Is Show the connection between what your child wants to buy and the money needed. Ages 5-6: Where Money Comes From Reward for good behavior or task completed should be EARNED. Ages 7-8: How To Save Set aside a portion of every peso your child receives from loved ones or relatives as savings. Teach your child the value of savings. Ages 8-11: How To Invest Your Money Wisely Save money through banks and other financial institutions. This allows the child to understand the effect that interest has on his or her money. Ages 11-14: How Money Works Money can be generated by getting into business. Money issues like borrowing, making loans and its effects should also be discussed. The goal is for the child to understand the pros and cons of borrowing. Ages 14-18: How to Make More Money At this age, a child also needs to understand how these things work: personal budgeting, overdrafts, credit cards, bank charges and so on. The goal is for the child to be independent in handling his or her personal finances.” Here in the Philippines, money is taught as early as preschool. It is part of the Math curriculum. But always supplement at home what is taught in school.

Managing family finances

2009-06-29T04:32:26Z

SOME years back, when my friends and I were starting families, talk would inevitably go to family finances. How much is your monthly electricity bill? How much do you spend on groceries every month? Where can you buy the best bargains? How are you saving up for your children's tuition? These were just some of the questions we would ask each other, and because we were friends, we had no qualms about basically revealing how much we were spending on everything.

Those talks helped because we would each give tips on how to save precious pesos and where to put our money so it would grow.

For instance, one friend said instead of buying a preneed education plan (premiums were high since her children were already in grade school), she would just put money monthly equal to a preneed plan premium payment in a high-yielding time deposit. It's basically a do-it-yourself way of saving up for tuition.

Another friend said my electricity bill was high, and when we compared our usage, we realized the electric stove and airpot (which was turned on the whole day) were the culprits.

Still another friend said that while you can buy school uniforms and school supplies at low prices in Divisoria, you'd be better off buying at a department store in the mall nearby to save on time, parking, and gas or taxi fare.

Nowadays people have more access to personal finance information from experts via the Internet, newspapers, magazines, books, and seminars, which is good because we all need helpful tips on how to manage our finances, especially since these impact our families. Read money blogs, not just this one, and pick advice that would best suit your needs. Financial literacy is one of those things that would benefit us until we grow old. (Karen Galarpe)

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Win a free seat to the Family Finance 101 seminar!
Want to learn how to secure your family's financial future? Money Sense magazine is presenting its latest Money Sense Live seminar on July 11, and this time it will be on Family Finance 101, with a panel of experts including Money Smarts pioneer blogger and Money Sense columnist Salve Duplito.

To register for the seminar and find out payment details, go to http://iluvlearning.com.

To win a free seat, be one of the first five people to post their own family finance tip here AND signify their intention to attend the seminar. In the comment section below, just say: “I want to win! Here's my family finance tip ...” The seminar organizer will then contact you as to how to go about claiming your free ticket.

The Family Finance 101 seminar will be held on Saturday, July 11, 2009, 1:30 to 5:30 p.m. at the AIM Conference Center in Makati City.