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Couple Diego and Bianca have finished their one-year life experiment with Money Makeover and the main events of that story is published today in page B2 of the Philippine Daily Inquirer. They have decided to continue having a financial planner and asked Nannette Ferreria, wife of Augustus J.V. Ferreria, to take that role. (This is their personal choice.) In this video, the Ferrerias give a brief summary of what happened during the one-year experiment and how the couple should move forward. Enjoy.

You all love Warren Buffett, right? Would you pay $2.1 million to have lunch with the oracle of Omaha like this Chinese investment manager who decided to pick up the tab by taking part in a high-stakes online charity auction? Zhao Danyang, 36, will have lunch with the US billionaire at a Smith and Wollensky steakhouse restaurant in New York. He can bring seven friends to enjoy Buffett’s company for, oh, maybe two hours. Three hours max... maybe. That’s serious pogi points if you like to project a certain image. Now if you just want to be generous and donating millions of dollars to charity is your kind of thing, why not get a lunch with Buffett into the bargain? Generosity is a curious thing. On the one hand, the world needs more of it. An interesting list of random acts of money kindness in this article have made life a lot more livable for quite a number of people. I have also said in a previous post that we can’t always expect people to pull themselves up by their bootstraps and that there will be times we will be called to give till it hurts -- and we should. On the other hand, (and I type this with a mountain of misgivings) sometimes we are too generous for our own good. A friend said she was looking at her credit card bill for June and found that she paid almost P6,500 for restaurant meals. The funny thing is, she could have pared that down to P1,500 if she wasn’t as generous in footing the bill. After all, her lunch mates –- colleagues and friends -- were not exactly welfare cases. At a Money Makeover dinner with Augustus J.V. Ferreria last December, Bianca* was quick on the draw when the bill came. Oh, the kind-hearted sermon that one brought about! Joe advised all of us to develop the habit of dividing the bill when we dine out with friends and colleagues. There are many other ways we can be too generous for our own good. In the same vein, there are also many ways people can be ridiculously stingy! Oh boy, I’m sure you know the type. From a scale of one to ten, ten being the most stupidly generous and one being terribly stingy, where do you stand?

(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. So I did. I talked to Joe’s wife, Nannette, who advised me regarding premiums and how much I can afford annually and other particulars. We did the math, filed my application, and I underwent the whole battery of medical examinations – fasted for blood sugar testing, got tested for HIV, gave blood sample, urine sample, had my chest x-rayed and poked, answered a whole series of questions about my health, my habits, my lifestyle. Turned out, somewhere along the way, I did something to my body, and it betrayed me. Okay, it is not so serious, or at least the optimist in me would like to think so. My liver gave an unusual reading and I am what they call in insurance parlance as “high risk”. The good thing is that I am insurable – but there is a big however – I needed to pay a higher premium (or opt to have a lower coverage). Unbelieving, I had myself tested again (it is allowed). Same results. So I paid the higher premium, quaking in my boots because of what I have (which is undetermined as of this time) or could have if I would continue speeding toward the highway of no exercise, social drinking and chocolates. I re-enrolled in a gym, ate my fruits and my vegetables, did my research, saw the doctor, and assured myself that it is not yet too late and that my fate is still in my hands and God’s who is merciful and kind. Lessons? Get insurance as early as you can, take care of your health, prepare. Because no matter how we shove our mortality aside, forgetting it, disbelieving it, thinking it unimportant, it will one day catch up with us. You, me, us – we are all on our way there. I think, though, that this “getting there” is actually a good thing. :-) "No matter how we shove our mortality aside, forgetting it, disbelieving it, thinking it unimportant, it will one day catch up with us," -- Bianca, for MoneySmarts Money Makeover. (Photo courtesy of Fe Herradura)

(This post is written by Bianca for Money Makeover) May you live in interesting times, is one Chinese saying, or curse, whichever way you want to look at it. We do live in interesting times. Just when we thought that we are probably getting it right, calamity struck. Our car was taken. It was not insured. A little background. The hubby drives a 9-year-old truck that was the apple of his eyes. His brother handed it down to us four years ago. We paid the balance whenever we could and had already given a total of P90,000, the last installment just very recently. There is, of course, the cost of maintaining it which ran up to some P200,000 over the years. He had dreams of “dressing” it up – in March, he bought it a P20,000 set of wheels filled with nitrogen. He wanted it “lifted”, repainted, made into a macho monster truck. It was a constant companion when we moved furniture, or people, from here to there, and a comfort in the many times that my much-older car has broken down or was being repaired. He never wanted a new one. He was content and happy, my boo. Then it rained. Literally. At 6:30 in the evening, torrential rains blotted out the sun. It was a typical downpour, in a typical day of May, and the hubby went about his business. He stepped outside of his office; saw his truck getting bathed by the onslaught of rain. He crossed the street to somewhere and thirty minutes or so after, just when the rain was slowing to a trickle, there in the parking spot, was a vast emptiness. He scratched his head, refusing to believe what he could not see, thought “oh maybe I parked it somewhere else”, ran here and there, his hands inside his jeans pocket, feeling the set of keys which he knows belong to the car, heart hammering, finally letting himself realize the obvious – his car was carnapped. He had a sinking feeling that he will never see it again. We never did. It did not help that the people at the government agency tasked to help victims of carnapping are an incompetent, insensitive bunch, ignoring us like this was nothing consequential, requiring a gazillion documents before the loss could be reported to national – wherever or whoever or whatever that is. We had never felt so helpless and so incensed, and…. Oh yeah -- it was not insured. We are still reeling and are still trying to let go. Memories are traitorous at this time, especially for the hubby. Whenever we see a truck similar in look and in color, we jump from our seats. He still tastes bitterness in his mouth and asks me frequently why life is unfair. I try to make him see the light but sometimes, it is difficult for me to answer the questions. And we are only talking about a P400,000 car here. Bad things can happen. Certain things, like death, will happen. That truth hit home, and hard. So we got life insurance, fire insurance, health insurance and I’m still trying to find out what other insurance there could be. However, my14-year-old car is no longer insurable. Some things, I guess, should be left to fate. Now, for the lifelong lessons: we did not know that cars could be insured for up to 12 years; that when you have a hard time opening or closing your car (which happened to us but which we attributed to old age and rust), someone could have tampered with it (placed something inside so that the owner will not be able to close it) and that we should have taken it to the mechanic; that a car could be replaced; that it was a blessing for the hubby not to have witnessed the carnapping because if that happened, we could have lost something much more important than the car. So now we hold on to our material things, but not too much, get safeguards and checks in place so we can sleep soundly at night, and try to extract whatever happiness we can with what material comforts we have. But mostly, we realize that we must invest in those that are far more important – each other and our daughter, in people and relationships, in great memories. While a car can be replaced, these, once lost, could be lost forever.

(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 stumped. I had been meaning to write about our recent family trip to Hongkong and Macau. As a matter of fact, my computer bears the digital imprints of so many lines and pages written. But for the life of me, I could not strike the “send” key. It struck me why one night. I never could justify – even to myself – why we did it. A family undergoing financial overhaul simply does not go on trips. What example would I be? What message would I send? The shudders would not stop (even as I grin at the memories). But, hey, we did it. And it, oh, set us back a few months. But there were valuable lessons we learned along the way. Joe and Salve knew about the trip. I was shaking when I told them – partly because of wanting, partly because of fear, partly because I thought I would have to defend myself, partly because I was wracked by the guilt that is the genetic imprint of my mother. But, lo. Joe and Salve said we could turn the trip into a challenge. They asked what budget I wanted to set. Eyes blinking, I said P30,000, all in, for a family of three. I was almost sure that I will make it, having done it the year before during our trip to Malaysia and Singapore, a welcome retreat after the grueling bar exams. Of course, I overshot the target. When that Canon 400D at a small Hongkong shop with an over-attentive salesman flashed those power lenses at my husband, that P30,000 budget went up in smoke. He had to buy it. For business (I chimed, miserably, in my head). With the camera, which catapulted us toward the edge and beyond, we spent P70,000. But hey, it included a trip to Disneyland and Macau and several authentic Chinese meals, some in quaint little hideaways after climbing rows upon rows of escalators upon elevators, and, as my daughter said, priceless time of running hot baths, walking hand in hand, using chopsticks and twirling in Dumbo’s cups (okay, this is Disneyland talk). Our daughter actually expects that we will do it again this year. Oddly enough, I am unperturbed. Shaken, defensive, yes, but unperturbed. After all, theories must be tested in the bed of reality, lessons must be learned and burn deep, so that it will linger and be remembered. Until the next time.

(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.) A financial planner (not Joe Ferreria) told us: sell your timeshare. My husband and I communicated silently the way old lovers do – with a look (or a glare, but that is another story) – and made a decision. We will not. I think he understood the hesitation and communicated to us his silent admonition. Insolent fools. At the back of our minds, we had a suspicion that he was right. Not about the fool part (although we could be sometimes that too), but about our timeshare. After all, we had a strong opinion against timeshares in the beginning - a waste of money, will cause delusions of beaches along Belize, sun stroking our backs, while the Pacific mirrors our dreams. Not that it’s a bad dream. But believe you me, a timeshare costs an arm and a leg. It ranges from P250,000 to gazillions (think Disney timeshare - I could not even get a quote on how much that is), depending on the location of the rental, the season (red, white and blue), and how unwilling to bend the sales person is. Think where that money could have gone – a downpayment for a new car, a new house, education…. But it does not end there. It gives birth to other expenses – yearly maintenance fees (which went up from P2,500 to P4,000 in the blink of an eye), RCI fees (S$150 annually –in Singapore dollars, but with the current exchange rate, it might as well be in US dollars), booking fees that could range from P2,500 (Asia) to almost P10,000 (outside of Asia). It does not include airfare, or the cost of food. The RCI hotels, although three or four stars, are almost always in the outskirts of the city – that means it is 30 minutes away from where the action is. With cab fares, we could have had a decent room at a city hotel with dancing lights, Prada and great food at our doorstep. But it is not all bad, as we have found out in our two years of owning one. With it, we only spend approximately P3,000 per night, and if the trip is stretched a week, the discount could be really substantial. Moreover, the accommodations are almost always one bedroom suites, and they say that if we are really kulit (translation: a charming prick) with the RCI agent at the other end of the line, or during low season (August to October), we could even be given a two-bedroom suite (good for 6 people). Match the hotel savings with really low airfare (through Clark, the other gateway to Hongkong, Malaysia, Singapore, Korea), it could satiate the wanderlust in anyone. For our first trip, our family (hubby, daughter and myself) went to Malaysia and Singapore and spent P30,000 for five nights (four nights in Malaysia, one in Singapore), inclusive of airfare and food. We recently went to Hongkong and Macau (for 4 nights) and spent P40,000, also inclusive of airfare and food. But do we recommend it? We do not. Well, at least, not to everyone. It certainly was not value for money to our parents, who had two timeshares. They paid approximately P700,000 for both and they got seven days at a one bedroom suite at the back of the Flamingo in Las Vegas, Nevada (the sign on the wall says $1,000 per night and that was a source of a little comfort) and seven days at a one-bedroom suite at a manor near Legoland in California. Sounds plush, but however I do the math, it is not P700,000. They tried to save up their weeks and were planning to go to Europe but travel was put off year after year after year because the kids got married, houses had to be built, the farm needed to be farmed and so forth. The timeshares expired and they never got to go. A timeshare is a commitment. It is for people who love traveling with a passion, love to do research (for cheap airfare, great places, good food), and, at the onset, the temerity to haggle with the timeshare salesperson until that person buckles down and gives the lowest-value-for-money-price imaginable. There will be hits and misses, we know. But we are passionately excited to see the rest of the world as a family, to hear the lyrical overtures of another language, introduce our daughter to life’s many wonders, and immerse ourselves in the magic of cultures so fascinatingly different from our own. Our timeshare keeps the door – doors – open. Yes. We are keeping it.

I met Madam Auring today. I could not believe it was her beyond the gossamer curtains.  What is this famous (or dare I say infamous) madame doing, encamped, in the crowded walkway of Ever Gotesco Commonwealth? Behind her was a stall selling shirt for kids – 3 for 100 (your name in textile glue – for free).  And what am I doing here?  Should I entrust my future to a P250 session – unlimited questions – with a madame known more for her beauty enhancement procedures and penchant for younger men than her magical prowess? Joe said we should, so I did.  I held out my hand and then came a barrage of hula. At Max’s, after the show, Joe exclaimed, “And that is the point of the exercise.”  He explains that everything in this money game is hula – where you put your money, what stocks would give the highest yield, what is stable, what is sure – is hula.  Nothing is sure. One has to rely on his gut, on luck, on his God, on the rise and fall of the sun’s rays, on change, on the ephemeral-ness of everything. The future is a gossamer sheet, like the one separating the world and Madame.  What is beyond is visible but hazy, one is never sure about it, or if it will still be there when the sheet is parted.  Joe says that nothing beats learning the game, knowing how it is played – on your own – and reading, reading, reading, forming your own opinions, winning some, losing some, recovering, daring.  And so we dare (or try). Post Script from MoneySmarts: The first three months of the Money Makeover exercise for Diego and Bianca were spent on ferreting out the couple’s money personalities, understanding their goals, recognizing their spending urges, shining a light on their real monthly expenses and making sense of their net worth. By that time, financial planner Augustus J.V. Ferreria, had spent more than 20 hours with the couple. He said it was time to teach them about investing. He was mysterious about it all. It would be fun to find out what Madam Auring sees in our future, he said with a laugh. I was not a fan of tarot cards, so I went to Ever Gotesco with a big crease on my forehead. But hey, I enjoyed it. Madam Auring was one of a kind :D . Behind the showbiz exterior and the gaudy curtains seemed to be a kind woman, surprisingly. “Now, you will never forget the day of your first lesson from me on investing,” Joe said after the whole tarot card caper. So, that was it. An emotional bookmark of sorts. As Bianca said in her guest post above, the whole point is to understand that it takes some kind of genius in intelligent and informed guessing to make it big in the stock market. The whole thing drove home the point that it can be fun, too. Now Diego and Bianca are raring to begin real investing in stocks. Joe has one more pleasant surprise though. “I will ask them to also trade P100,000 of my own personal money. This way, it becomes even more interesting. Now, we will also see if I am a good teacher.” Abangan… (In Money Makeover, we matched volunteers with financial planners who will coach them for one year so they can reach their financial goals. Through this series, MoneySmarts hopes to show how a good financial plan can change the course of people’s lives. People don’t need another Sermon on the Mount on financial planning. They need to see how financial planning can be done well. By the way, Diego and Bianca are aliases to protect the couple’s identities. Click here to read earlier Money Makeover articles.)

(This post was written by Bianca, a MoneySmarts reader who was chosen among a long list of candidates to be part of our Money Makeover. In Money Makeover, we match financial planners with reader-volunteers and chronicle their one-year journey to their financial goals. Generali Pilipinas' senior executive vice-president Augustus J.V. Ferreria has agreed to coach couple Bianca and Diego for 12 months pro-bono. In Money Makeover, we aim to show readers that finding financial freedom is really possible. Read previous Money Makeover articles here.) I do not do math. Addition It started simple enough.  Joe wanted us to list all of our expenses every day forever.  He did not warn us that our hearts could suffer anxiety attacks because, for one, we were confronted by the fact that our expenses overshot our income by some P30,000 every month.  He also provided no explanation as to how we could have survived all this time – but our zero-balance savings, credit card debts, frequent lifeline calls to mom and dad could possibly provide a clue. It is a stressful exercise trying to figure out where our money went every day because with it comes the understanding that it went to excesses of the flesh and vanities. Want and need are becoming very delineated concepts at this time (but concepts all the same). Subtraction Joe had us make a list of our monthly expenses.  He then took out his scissors and cut away the expenses, which exceeded our monthly income. This included my gym membership (to which I signed up for one year minimum!), auto repairs (we have 7 and 14 year old cars!), clothing, movie trips, restaurant trips (the stuff life is made of) and altruistic pursuits (read: gifts). Joe said that if we wanted them, then we would have to reduce our spending for the items above the scissor line.  It would mean no aircon nights, commuting, and probably the househelp has to go. Despite the pain, one important thing I learned from this exercise is that I should pay myself first.  That is, from the collective salary my husband and I receive every month, we should take 10 percent of it (the Japanese do 60 percent!) and put it away.  The key word is away – it should be where it is not in any danger of being spent.  It could be in a simple savings account, a high yielding deposit account or a time deposit account.  At the end of the year, Joe said we should have a definite plan on what to do with this money.  Joe does not believe that we should be misers.  Money, after all, is there to improve life.  (I breathe a sigh of relief here.) Division Joe divided our expenses between my husband and myself and assigned us specific bills to pay.  I found this extremely hard at the beginning because my husband usually surrenders (yes, it is the right word) all of his salary to me and I pay everything.  Doing it Joe’s way made me feel like I was losing control. Moreover (stress ball in hand), I have to remind my husband every time to pay his share of the bills, and he hates to be reminded (but needs to be reminded). We are still works in progress on this one. Multiplication This is the fun part. Joe introduced us to the magic of stocks so that we can multiply our income a hundred-fold – well, that is the goal. He gave me P1 million in virtual money to invest in the stock market for 30 days. The exercise had me looking at the waxing and the waning of the 10 stocks that I chose every day (okay, there were misses).  But in a day, I made P9,000, and then my profits were up to P30,000 in two weeks!  I sold all my stocks and narrowed down my choices to just five. At the end of the month, I found that I had an extra P170,000 in virtual money. I was in a world of infinite possibilities!  Oh, to what good use that P170,000 would have gone to! Through Salve and Joe, we found ourselves in the place where it all happens - the grand arena of the Philippine Stock Exchange.  Leo Quinitio and Jay Penaflor of the PSE’s Market Education Department, Capital Markets Development Division were there to guide us and answer our every question.  There, all of it came to life!  The board blinked at us, numbers turning sometimes green, sometimes red.  Traders were on the phone and on the computer, talking incessantly. The bell that signals the beginning and the end of trading was on one side, silent, bearing witness to the money that is being made and being lost. Leo and Jay say that the PSE also has an online stock game that everyone can play (see www.pse.com.ph).  Like in Joe’s exercise, investors are given P1 million in virtual money to invest. In this one, though, the program even calculates the broker’s fees and the taxes so the feel is more real.  Leo and Jay also tell us that PSE offers securities courses to the Filipino investor, beginners and experts alike.  We hope to be part of it very soon.  Money and math.  Interesting, heady, nerve-wracking, daunting, extremely satisfying.  In our own way, in our own time (well, hopefully by May 2008), we hope to have understood more, made more, put more meaning into our lives because we give more and worry less, and to finally put those two words – money smarts – down to pat.

By Bianca It was not your run-of-the-mill first meeting. True, there were muffins and sodas and a lot of getting-to-know-you questions but then Joe posed this query: “Who are your parents?” And he did not mean their names. Joe explained that we are our parents – how we spend, earn, our attitude toward money – they are mainly because of what we were taught, what we observed from our parents, what we hated but imbibed anyway, whether consciously or unconsciously. That if we understand them, we understand ourselves. I began to understand.I am a combination of my solid, stable father who loves to gamble every now and then and a mother who never quite forgot her less than humble beginnings that even with a million-dollar home, she still thinks she has not gotten away from being ankle-deep in the dirty flood waters of Sta. Cruz. Half devil-may-care, half guilty for every little thing I spend my money on, I realized that unbeknownst to me, I am them, and like them, I will be safe and solid money-wise, but trapped. I do not want to be trapped. Neither does my husband who has komunista parents turned kapitalista. He’s a nut case too when it comes to money – he’s a rogue painter in jeans and a wanna-be entrepreneur who cannot stand leaving a single centimo in his wallet. We are quite a pair. So it is quite serendipitous that we found Salve Duplito, who, we are convinced, has a heart of pure gold, and Salve found Joe Ferreria, our financial planner, who was funny, genuine, asked questions that hit home and cared enough to go all the way to our house and bring his wife’s callos at this point in our lives when we were ready to conquer bigger things, like ourselves and our latte factors, and ready to step beyond our comfort zones. We found friends that first night of our foray to living a better life. And suddenly – financial freedom, stability, being rich - is not so impossible anymore. (Bianca is one of the volunteers for MoneyMakeover. In MoneyMakeover, two financial planners have committed for one year to help out a couple and a young urban professional to achieve their financial goals. We all don’t need another Sermon on the Mount on financial independence. It’s time to show readers how this can be done. Read previous articles here.)

You’ve all heard of the expression “know yourself.” Experts believe this should be the first baby step of people who want to successfully get off their little gerbil wheel of consumerism, where it is custumary to work like horses the whole week and spend everything on weekends. No matter what investing prowess we have achieved, or what superior knowledge about wealth accumulation we have attained, if we skip this process, there's a likelihood we may crash and burn and perhaps question whether financial independence is really an achievable goal. Thing is, facing reality is tough. Nevertheless, knowing our inner financial blueprint could bring us closer to financial happiness or hinder us from getting there. From the perspective of the financial planning professional, taking this route requires more work and dedication. Cookie-cutter financial plans will not work. A financial plan that folds in clients’ money personalities addresses their inner money demons and strengths, and hopefully builds on those strengths to create a more financially responsible and happy person. MoneySmarts has matched a couple and a yuppie with two financial planners who have committed to work with them for a year to show readers that financial independence is possible to attain. These volunteers are named Diego, Bianca and Sheldon in this blog, aliases that protect their identities. In a recent Money Makeover session, an experiment highlighted the need to understand this inner financial blueprint. (If this is your first time to visit MoneySmarts, you may read the background of Money Makeover here) To recap: financial planner Augustus J.V. Ferreria digs into the past of the volunteers and asks them to jot down every item they spend on for two weeks. (See previous post) Here are the results of the experiment: Multi-media artist and teacher Diego spends everything in his wallet from sunup to sundown, the main reason why he only receives allowance from Bianca. Diego walks into a mall and buys C2, water or soda. He smells Jamaican patty and he buys one. His eating adventures are stand-up ones, like a hot-dog stand, buko salad or a shawarma sandwich – a long running joke between the couple. “Whether he starts the day with P500 or P5,000, he will have nothing by midnight,” says Bianca, a lawyer. This is typical of persons who have experienced prolonged periods of deprivation, says Ferreria. Diego grew up in poverty but enjoyed his father’s reversed fortunes as a young adult and thus admits to having urges to splurge. Ferreria accurately guessed something that the couple had been dreaming about for quite some time: a restaurant with a unique concept, like an artiste’s eating place showcasing Diego’s artworks. The financial planner’s take: it’s the perfect business for Diego because it’s a “feeling” business and fits his personality. Moving on to Bianca. The lady loves fine dining. Her little spending diary is that of a mommy’s: food pasalubong for her daughter, ballet lessons, school supplies and similar items. Oh, of course parlor fees and gym memberships are there too! Who do you think spends more: Bianca or Diego? A Splash Money program shows that Diego’s below-P100 spending adventures are actually more expensive than Bianca’s. Despite being outspent by Diego the “walking eater”, Bianca did not get off the hook easily. “You are not an off-the-wall spender, but you have a tendency to be. You are a very emotional spender. You spend on anything if you feel your baby wants it. If you travel, you will spend a lot of money,” Ferreria tells her. “Women don’t buy things for themselves. If they spend two to three weeks in the US, look at their balikbayan boxes. Ninety percent are souvenirs for parents, brothers, sisters, nephews and nieces,” Ferreria explains. On the whole, Diego and Bianca realized they spent astronomical amounts in maintaining their two cars and parking fees for Bianca, who works in Makati. They were advised to think of retiring their oldest car, which is very expensive to maintain. Practical solutions for the couple: Diego should not leave home hungry and he should bring with him a bottle of water all the time. Ferreria taught Bianca to have a little fun money, with limits, and to program major spending items like vacations. They are to look into retiring their oldest car. Sheldon’s spending tally showed restraint considering his age. The yuppie said the most interesting revelation for him was the way he spent at night. “The highest I have ever spent is P3,500 a night. I also spend a lot on my mobile phone usage,” Sheldon says. He also realized that he loves to travel, but what a revelation his small notebook showed! He spent almost nothing during his recent trip to Boracay. (His plane fare was gratis. Boracay photo courtesy of Michelle Morelos.) “It’s very easy to spend money and buy trinkets off the shelf. But you have the financial discipline to keep spending low,” Ferreria tells Sheldon. Sheldon is worried about his telco bill. At P3,000 per month, it does not look bad at first glance. Multiplied by 12, it’s a major concern. “If you multiply it by 12, it can reach more than P40,000 a year. You can already go to Boracay with that amount of money,” Ferreria says. “It’s also important to look at the small stuff because a leaking faucet for example, is money in my hands,” he added. The financial planner advised looking at promos given by telcos, like a PLDT scheme that allows calls to other PLDT phones all over the country at P10 per call. “A lot of these promos are used to build the brand, but their consumer studies have already told them people will not use them. Take advantage of these promos,” Ferreria said. He counseled Sheldon to look more carefully at his expenses, and separate personal and business spending. “It may be too ambitious to target a 50% reduction in your mobile phone usage especially since you use it for work, so lets look at reducing your expenses without making you stop calling,” he explained. While Diego has the makings of a hands-on restaurateur, Ferreria again guessed accurately that Sheldon would prefer buying a franchise, paying someone to operate it, making it profitable and selling it after it has generated sufficient cash. Typical of his “racketeer” personality that helped him survive his father’s business failures. Practical solutions: Study telco promotions and take advantage of them, but most of all, to calm down and not worry too much. “When people spend money, we normally don’t relate it to our life that’s why we spend shamelessly. The answer is to put more quality into spending. I don’t want to turn you into misers, but remember that 80% of Filipinos make money but don’t know how to spend their money wisely,” Ferreria tells the volunteers. He explains that just having more money would not solve financial problems. Ferreria tells of a cigarette vendor who won the sweepstakes but after five years went back to selling cigarettes.

“The background and psychology make-up determines a person’s success. It determines how he will react to stimuli. The poor will remain poor unless someone sits down with them or they educate themselves. Otherwise, they will just live out their frustrations through money. How many livelihood programs failed because beneficiaries were not taught financial literacy? That taxi livelihood program failed because the beneficiaries ate the principal,” Ferreria explains.

To Diego, Bianca and Sheldon, Ferreria says with a twinkle in his eye: “You are redeemable people. You have financial insanity from time to time (an observation that elicited laughs across the table), but that’s okay. You are influenced by your ancestry, but you don’t have psychological problems. I am comforted by the patterns in your spending. If you don’t have a pattern, I would be worried.” “You (Sheldon), manage the money. You (Diego) manage the hunger.” Till the next meeting :-) .