My Financial Blueprint
I read somewhere that 90% of our values are shaped by our environment, with 99% of that 90% shaped by our parents. So you know how the whiners keep pointing to their parents as the source of their misery? They do have a point to some extent, but once you get past a certain age, whining about your lot in life without doing anything to change it will no longer cut it. Suck it up and accept the hand you've been dealt with and then use that as your ground zero to create the life you want.
My financial education was very typical Pinoy, with some minor exceptions. My parents were not born into riches, had to work for a living but enjoyed some perks that they were always thankful and gracious with. They never really lectured us on money or talked about it in passing, unless it was my mom worrying out loud like clockwork on how she was going to come up with the cash to pay our tuition fee, the two mortgages on the house, car payments etc. etc. And although they never said anything, when it comes to money matters, these are what I picked up from my parents.
- Yin and yang incomes are better. My dad worked in the government for his whole professional life, but being in government service meant that although he had a stable salary, it was also not enough to provide for his 5 children. My mom, on the other hand, was a private physician whose income would swing wildly from 10x of my dad's monthly take home pay, to half of that in any given month. With their polar opposite incomes, my mom had to save money when there was money to be saved to make up for the lean times.
- It doesn't matter who earns more. My mom outearned my dad for the first 25 years of my life, but as my dad got promoted and my mom slowed down in her practice, my dad's income finally caught up with hers and now even exceeds it. Despite this though, their dynamics haven't changed at all and it's still my mom who manages the household purse, only this time, she asks my dad for money, instead of coming up with the funds herself.
- It's OK to get in debt to buy a house. My parents bought a house that they could barely afford because they had a dream of putting their kids in a good neighborhood, near good schools. I remember my mom talking about mortgages, requesting for a lower interest payment from the bank and scraping money to come up with a lump sum to be applied to the mortgage balance whenever the loan anniversary would roll by. It became such a natural part of my growing up years that I was surprised that not everyone knew that you could refinance your mortgage every year by making a lump sum payment credited to the principal amount due. Wasn't that basic knowledge?:p
- God will make a way, but at the same time, work your ass off. Whenever money was tight and there were bills to be paid, my mom would round up all of her kids and get us to pray the rosary. And wouldn't you know it, a day or two after praying, a patient would get admitted for a C-section and my mom would be able to settle whatever it was that we prayed for. Imagine that.
- A new car means that it's time to tighten our belts. My parents had this mentality that since they were already in debt, they might as well be comfortable while paying it off, so for them that meant getting a new car every two years. We bought a new car on a yearly basis that I began to see them as disposable objects that translated to more years of debt payment. Incidentally, my parents eventually grew out of this madness and haven't bought a new car in more or less five years.
- Be aware of your obligations all the time. My mom would write down all of her payables on whatever piece of paper was on her desk (usually a freebie desk calendar) and would cross out whatever has been paid. I did the same when I was paying off three credit card debts and coming up with and writing down a payment plan really helped in budgeting my resources and keeping me on track with my debt payment goal.
- Work with a pension in mind. Years before he was scheduled to retire, my dad was already dreaming of the pension and lump sum he would receive and how he would spend it.
- Happiness is not measured by how expensive your shoes are. I only learned of designer stuff when I was already in college, and to think I went to a swanky school. Most of my clothes were hand me downs or SM department store haute couture, yet I never noticed them because I was too busy playing with my cousins or reading young adult literature in a corner.
- Investing is a risky, risky affair. My dad believes that to make money in investing, you have to pour in millions and millions. Otherwise, don't even bother. My mom, through some stroke of luck, pulled out her money from a pyramid scam a few days before it collapsed.
- A debt needs to be paid. My parents lend their kids money with the tacit agreement that it is to be paid. My mom makes sure of this and keeps a running tally of payments made in her head. With us, since I'm always buying her airline tickets and managing her condo unit, the ticket price and association dues are subtracted from my outstanding debt and as of last month, I owe my mom nada, zip, zero.
- Rushing to the bank every month to fund a check is normal. When I learned to drive, part of my chores to go to the bank to deposit just enough cash to fund the mortgage or car loan checks. I eventually took note of the amounts due in my own planner and would remind my mom a few days before they would become due. We celebrated the full payment of the house mortgage with lunch at a small Thai restaurant near the market.
- Flying off to the province for a weekend to see your family is money well spent. My parents would regularly leave on impulse to visit their family (mama= Cebu, tatay= Biliran) even if only for a weekend. My mom would spend her mini-break chatting with her sisters and sleeping, while my dad would round up his buddies and reminisce their bugoy days.
These are the tenets I grew up with, but that doesn't mean I apply all of them in my life now. Seeing how my mom worked 24/7 and how she rushed to the bank every month, I refuse to get in debt for a house or for a car.
Also, while I love being part of a big family, I don't have my mom's sense of sacrifice and I still want to have time for myself and my dreams. That means two kids max, but with the many cousins living nearby, my kids will have a very happy childhood.
My dad is one of the most fulfilled people I know career-wise. He's a bureau director who gets things done and will be retiring without a scandal attached to his name (which is not really difficult to be perfectly candid because the DOH is not a goldmine like the BIR, Customs or DPWH). But most importantly, he enjoyed and found fulfillment with what he did, so while he kept on thinking of the pension he would receive, it was more like a prize at the end of his stay in government. I can't imagine what it must be like to work for 3-4 decades, wasting time day in and day out with the pension as your sole source of inspiration. What a sad existence that must be.