(This piece is written by Bianca, one of the readers of MoneySmarts who has been chosen for the one-year Money Makeover challenge by INQUIRER.net. Bianca’s real identity is confidential, so that MoneySmarts can share her family’s financials and the lessons she has learned with the rest of the world. Read more about Money Makeover here.)

I am faced with the possibility of death.

I never felt I needed life insurance, always resisted it, reasoned that under the mass law’s hierarchy of needs of Filipinos, it was way below –- after all, I had other more important bills to pay, I had properties under my name that I can pass on, and I never really cared much for the pestering of insurance agents who only saw me as their next paycheck. Okay, I did have it at one point, a P750,000 investment, which I lost because I did not give a damn. I was young and immortal.

Now, ten years after, I began to see it in a new light. I had undergone psychological-financial overhaul courtesy of Joe and Salve, and realized that, yes, I might actually need it. The tipping point, however, was a seminar on estate and trust that I attended. I learned that insurance is a great tool to transfer wealth –- there was no income or estate tax payable (provided the beneficiary is irrevocable), it was better than a transfer via a donation or a sale, or setting up a corporation to hold property, better than other very complex methods to hide and transfer wealth which would entail the assistance of lawyers and accountants, and yes, paying their fees. I realized too that I was not getting any younger and should consider these things seriously.
[Read the rest of this entry »]

How do you prepare yourself for a loved one’s death?

Not exactly a peachy thought on a MoneySmart Monday, I know. But as they say, there’s no going around death and taxes. And while it may be easy to prepare for the loss of a loved one financially, the emotional part is something else again. Can you attache a peso sign to that?

This story from MoneySense about a widow’s journey from tragedy to triumph is worth the few minutes it will take to go through it from start to finish.
[Read the rest of this entry »]

(Photo from Agence France-Presse)

No self-flagellation here in MoneySmarts this Holy Week break! Let’s list down all our favorite painless ways to increase savings. I’ll go first:

1. Take advantage of SM Advantage (and other store cards). They hardly cost any money and carrying them in your wallet won’t give you even a slight kink in your shoulder. The other week, I bought several grocery items and replacement parts for toilet flush and paid for them with my SM Advantage card. Not bad at all.
2. Don’t forget your rebates and freebies. I learned this the hard way. I forgot all about my expiring Mabuhay Miles and found out I was eligible for a free trip to a Visayas destination only when it was too late. Be careful, though. Rebates, rewards and freebies need to be managed carefully. For example, if Casa Armas is giving you 20% discount on a meal, don’t go just for the discount but go because you would have eaten out anyway. If you went out because “hey, we have a discount, cool!” you wouldn’t have enjoyed 20%, you would have spent 80% of the cost of the meal. [Read the rest of this entry »]

My 2-year old son was hospitalized again last week and it got me thinking about whether it makes good sense to get a health card.

When my husband and I decided to enroll the entire family into his company’s health program, we did it mostly for our peace of mind and not based on some proof from an Excel worksheet that it will eventually pay off. Unless you know how often your children are going to get sick, I don’t see any way of finding out exactly if the P1,500 per month expense for all our health cards will be worth it.

Based on simple computations for 2007, it appears that getting a health card worked for us – at least for last year. Consider the figures:

[Read the rest of this entry »]

It’s not easy to buy insurance. In fact, it can be so confusing that people tend to just go with the flow and trust everything to their agent.

That would be okay if your agent is always on the lookout for your interests. But sad to say not all agents were created equal. Some just want to meet their quota. Even those who are in the insurance business will not deny that.

Having said that, I have met many insurance agents who are truly concerned with their clients and sell them what they need, not the products that they need to sell. Most of them have training in overall financial planning.
[Read the rest of this entry »]

Check out my article on the Philippine results of an 11-country Citibank survey on financial intelligence. The results were very revealing, and quantified in figures what we all suspected.

Here’s the link: 8 out of 10 Filipinos worry about bleak retirement–survey

And here’s an excerpt:

MANILA, Philippines – Eight out of ten working, middle class Filipinos believe they face a bleak retirement and more than half expect to be supported by their children in their old age, results of a Citibank survey showed.

[Read the rest of this entry »]

Filipinos are still on a home-buying spree, even as the US housing sector still reels from the effects of the subprime mortgage mess. Thanks to money flowing in from Filipinos working overseas, the real estate sector in the Philippines seems to be set for another big year in 2008.

It’s good money flowing in for good reasons. At least, Filipinos are putting their money in something that will last and even appreciate in value, as opposed to appliances, cars and latest mobile phone models. Hello iPod? (Read this article on what families of OFWs do with money wired to them regularly.)

But although buying a home can be pretty straightforward (ok a bit challenging too), buying home insurance can feel like going through a maze. This article from our personal finance section says there are three MUST-ASK questions when buying home insurance (excerpt below):

[Read the rest of this entry »]

What are the chances you would be a victim of a bomb blast? I’m pretty sure the 89 persons wounded by the blast or the families of the eight who died had that farthest from their minds as they spent the afternoon going about their ways.

Always be prepared because anything can happen. Protection comes first before investing.

I can’t help but thank God I didn’t have a meeting in that area today, nor opted to buy my tickets from Philippine Airlines whose new sales office is now near the area. It’s unfortunate and very shocking to see so many people wounded and hurt.

[Read the rest of this entry »]

Insurance for children are cheap, sure but in this case, “cheap” doesn’t equate to “good buy.”

The reason is simple. Children don’t need insurance. Our personal finance feature for today says:

Children do not need life insurance. You are not dependent on your child for your income. If your child passes away, you can still continue to work and earn, and life will still go on for you.

Read the entire article here.

[Read the rest of this entry »]

From MoneySense magazine:

Buy term, invest the difference?

Buy when you’re young
Jerry Miraflor, Cocolife first vice president, gives this warning about this strategy: “I’d say, ‘be very careful’. There are a lot of very big ‘ifs’ for that statement to work. You must be young enough and healthy enough to qualify for term insurance.” Once you hit middle age, premiums for term insurance can be expensive.

Have the discipline
Saying “invest the difference” is easy; actually doing it regularly is another matter altogether.

Invest smartly
Jerry says, “You’ve got [to have] the expertise and the time to manage and generally oversee your investments. I’d venture to say that 90% of the general public does not have that expertise.” Of course, you can invest in mutual funds and trust funds that are managed by professional investment managers. You can even automate the process of setting aside money to invest. Nevertheless, you still shouldn’t neglect insurance, adds Jerry.

Read the rest of the article here.

[Read the rest of this entry »]