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.
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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
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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:
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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.
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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.
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HOW do smart dads handle money? In time for Father’s Day, we asked some dads to share valuable tips to you fellow dads out there. Here are some wise advice:

1. Live within your means. “The general tip is really ‘living within your means.’ It is an attitude that should not be equated to being stingy; rather, it entails planning the family’s lifestyle to cover the basic necessities, leisure activities, and savings. It is also an attitude that makes the family define its own happiness instead of being dictated upon by the happiness of others.” — Noel M. Cortez, head of marketing and graduate school professor Dad to Popet (11), Peping (7), and Kimi (4)

2. Spend for experiences rather than stuff. “As dads, we have a tendency to lavish our kids with material things, partly out of guilt for not spending enough time with them and mostly because we just enjoy seeing the smiles on their faces. But their excitement is gone weeks or even days after getting something they want. So instead of buying more and more stuff, spend for experiences–trips to the zoo, the park, the beach–since memories of happy experiences last much longer than the fleeting enjoyment of toys and gadgets. Plus you get to spend quality time with them. More experiences, less stuff.”– Heinz Bulos, editor-in-chief of Money Sense magazine and dad of Kimi (2).

3. Cut down on your unnecessary spending. You’ll be amazed at how much you can save. And don’t get discouraged when times are bad. A downturn also creates opportunities to earn good money.– Benjie Oliva, commercial banking director for a leading multinational bank, and dad too

4. Teach kids about money early on. “Train up a child in his ways and when he grows old he will not depart from it. Teaching our kids financial literacy at a young age is very important. The best person to teach children about handling money is you. We cannot leave our child training to the TV, to teachers, to MTV, to their idols. It is the dad’s main responsibility.”– Chinkee Tan, lifestyle trainer (www.chinkeetan.com) and author of the personal finance book “Till Debt Do Us Part” Dad to Kayla (8), Jethro (6) and Destiny (4)

Happy Father’s Day to all dads!

My daughter is so not a baby anymore. She’s taller than I am, wears shoes that are two sizes bigger than mine, raids my closets and wears a lot of the girl stuff she fancies there, and loves teenager music. I don’t mind that, but what mother would not worry about (whispers) the boy stuff?

Lately, I’ve been worried about how to get her through college. Most financial projections assume an 8% tuition fee inflation for college education. If she gets into the University of the Philippines, that means we would need at least P300,000 for tuition for a 4-year course. Add around 80% of that for other expenses like books, clothes, allowance and I roughly expect half a million for a 4-year UP education that starts three years from now.

As you can expect, the figures can get really scary if you’re thinking of an Ateneo or a De La Salle University education. That can easily mean at least P1.5 to P2 million per child. And that’s a conservative estimate.
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In with the new, out with the old–so goes the saying for the New Year. It is also this time of the year when I keep the pack rat in me at bay (at least, I try to) and figure out what financial documents to retain and which things to feed to the shredder.

It’s not the most exciting item in my to-do list. I hate those paper cuts. Plus, I have a problem with letting go…weird as that may sound when we’re just talking about piles of paper!

So, I walked over to our accounting department and picked their brains. Here’s what I came up with:

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It has been more than a week after the crazy rush of Christmas past. That’s ample time to figure out the lessons that can be gleaned from under the Christmas tree.

Which gifts have you truly found enjoyable and useful? Which ones were a waste of money and time? Did the price tag matter? Come on…honestly?

I found myself thinking about these questions as I took down the tree and wondered about my Christmas spending and plans to begin saving for the 2009 holidays. Here are some realizations that surprised me (or maybe they shouldn’t have??):
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“How do you teach children the difference between wants and needs?” a viewer texted ABS-CBN’s Shoptalk yesterday after host Pia Hontiveros and I spent the better part of an hour talking about financial literacy for kids.

The studio lights felt warm on my face and the ticking clock made me mumble a couple of excuses for an answer. My daughter and best critic who was watching assured me I did good, but in the harsh reality of 24-hours-after, I am now mortified at how I missed the opportunity to dissect a very important personal finance dilemma for parents.

Forget teaching most adults about wants versus needs. Most of us are hopeless. But children? The spending habits we instill in a child will make more impact on his financial life than any investment he may make in his future. I can’t even begin to explain how critical it is for a child to have a clear grasp of this concept.
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