Only a fourth of all Filipinos are financially literate, according to a study by Standard & Poor’s (S&P) in 2016. The study finds that millions of Filipinos have no clue on how to budget, save and invest.
Another study by the National Economic Development Authority (Neda) in 2013 found that “The Filipino mindset upon receipt of salaries, as commonly known, is that upon receipt of salaries, spending comes in before saving. What is left, is saved. If there’s none left, then, there’s nothing saved.”
Charmaine de Leon, the owner of the YouTube channel Ready2Adult PH with over 100,000 subscribers and 2.8 million views, says that this is a consequence of the cultural taboo of talking about money.
“I noticed that Filipinos are often willing to talk about sports, hobbies, religion or politics, but they avoid talking about their income, their investments or their insurance plans in the event of sickness or death—and that’s a problem,” she said.
De Leon is the chief executive officer of District Events, a company that manages the food and lifestyle bazaar Pop District Bazaar, and the finance director of Sugbo Mercado, the first and biggest year-round weekly food market in Cebu.
How to adult
She recalls how many of her close friends would approach her about anything related to financial planning as they were reluctant to consult their parents. “Everyone wants to talk about it, but no one openly does so,” she said.
She shares how, at one point, two of her friends messaged her the same questions about personal finance. “I just sent a screenshot of the response I had for my first friend to my second friend. That’s when the second friend gave me the idea to make a video that I can send to anyone who asks, so I did exactly that.”
De Leon believes that learning how to adult by gaining different sources of income, budgeting, investing in assets like stocks, bonds, real estate or cryptocurrencies, and buying insurance in case of accidents, sickness or death, is important for Filipinos to be cognizant about as early as their teens or their 20s.
“Many of my friends still don’t know why the equation Income – Savings = Expenses is better than Income – Expenses = Savings. The gist is that you should budget your expenses based on how much you want to save, not budget your savings based on how much you want to spend,” she said.
“Just like starting a business, I think financial planning for our futures can feel so distant and overwhelming because of all the complicated forms and accounts that must be opened. That’s why some don’t even bother. But starting is better than not starting at all. You don’t have to be an immediate expert—it’s alright to take small steps toward your goal. As long as you’re on the right track, you’ll eventually reach where you want to go,” she said. —CONTRIBUTED INQ