Wake Up, Philippines!

Heart Attack

Posted in Health, Tips by Erineus on February 11, 2009

WHEN the supply of blood to the heart is sharply reduced or cut off, the heart is deprived of needed oxygen. If blood flow is not restored within minutes, portions of the heart muscle begin to die, permanently damaging the heart muscle. This process is referred to as a myocardial infarction, more commonly known as heart attack.

The most common type of heart attack is caused by a thrombosis, or blockage, of one of the coronary arteries by a thrombus, or blood clot. This cuts off the blood supply to the region of the heart muscle served by the artery, damaging or killing the deprived tissue. Heart attack generally occurs only if your coronary arteries are already narrowed by coronary artery disease. If the infarct, or damaged area of the heart, is small, it does not impair the electrical conducting system that regulates heartbeat. Therefore, the attack should not be fatal and you will have a good chance of recovery.

What are the symptoms?

The main symptom of a heart attack is usually a crushing pain in the center of your chest. The pain may also appear in the neck, jaw, arms, and upper abdomen. A heart attack can come on gradually, preceded by a few weeks of angina (chest pain), but it can also happen without any warning. The pain varies in degree from a feeling of discomfort to antagonizing tightness in the chest. The pain may be continuous, or it may last for only a few minutes, then fades away, and then return. It may come on during exercise or emotional stress or even at rest. Unlike the pain of angina pectoris, the pain of a heart attack does not go away after the exercise or stress ceases.

Other possible symptoms of heart attack are dizziness, shortness of breath, sweating, chills, nausea, and fainting. In a few instances, mainly in older people, there are few if any symptoms. The condition, known as a silent infarct, can be confirmed only by electrocardiography (ECG) and blood enzyme tests.

What are the risks?

Two out of three people who have a heart attack recover, but the attack may be fatal if it interferes with the electrical impulses that regulate your heartbeat or if it severely damages your heart muscle. Most deaths from heart attack occur within 2 hours of the onset of symptoms. About 10 percent of patients admitted to hospitals with heart attacks go into shock, which can also be fatal. Heart failure may also develop.

After a heart attack, a thrombus, or a clot, may form inside one of the four chambers of the heart. If the thrombus becomes detached (it is called an emboli) and is swept into the circulation, it can travel and cause damage elsewhere in the body. Fortunately, this occurs in only about 5 percent of cases.

Damage caused by heart attack may weaken and stretch one of the walls of the heart chambers. The resultant aneurysm, or ballooning, can lead to complications such as heart failure. There is the added risk that bed rest may cause thrombosis (blood clots) in the veins especially in the legs.

What should be done?

A heart attack is a medical emergency. Half of the deaths from heart attacks occur in the first 3 or 4 hours after symptoms begin. The sooner the treatment begins the better the chances of survival. Anyone having a symptom that might indicate a heart attack should get prompt medical attention.

What is the treatment?

Self-help: None is possible.

Professional help:

1. The most effective treatment for a heart attack is to dissolve the blood clot that caused it, but this is possible only within a few hours of the start of a heart attack, which is why it is vital to treat any possible heart attack as an emergency.

2. Once a diagnosis is arrived at, a clot-dissolving (thrombolytic) drug is given, usually by injection into a vein.

3. Further special tests will be performed, including coronary angiography, to assess whether thrombolytic drug treatment has been successful.

4. If the coronary artery is still blocked, an attempt may be made to reopen the artery by transluminal (balloon) angioplasty.

5. Coronary artery bypass graft operations are performed in cases of coronary artery disease in which the narrowing or blockages are multiple or involve the left main coronary artery.

Prognosis and prevention:

Most people who survive for a few days after a heart attack can expect a full recovery, but about 10 percent die within a year. Most death occur in first 3 or 4 months, typically in people who continue to have angina, irregular heart beat, and heart failure.

The old saying “prevention is better than cure” is very true in the case of heart ailments. In fact in the cases of disorders of the circulatory system and the heart it is only prevention that offers the real chance of your staying alive.


* Make sure your diet is high in fiber.

* Do not eat red meat, highly spiced foods, salt, sugars, or white flour. Refined sugars produce adverse reactions in all cells by causing wide variations in blood sugar.

* Eliminate fried foods, coffee, black tea, colas, and other stimulants from the diet.

* Do not smoke. Avoid secondhand smoke.

* Refrain from alcohol use, as it has a direct toxic effect on the heart.

* Drink plenty of water.

* Do physical exercises regularly.

* Learn to meet stress efficiently.

Dr. Gary S. Sy, M.D. is the Medical Director of Life Extension Medical Center located at The Garden Plaza Hotel (formerly Swiss Inn Hotel) 1370 Gen. Luna St., Paco, Manila. He is Diplomate in Gerontology and Geriatrics, Advocate Diet-Nutritional Therapy, and conducts free seminar every Friday about Age-Related Health Problems.

For more details e-mail address: lifeextension_drgarysy@yahoo.com

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DZRH 666 kHz “Lunas” every M-W-F 7:30-8:30 p.m.

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Please watch “Generation Rx” every Saturday 9- 9:30 a.m. @ ANC SkyCable Channel 27.

Author: Dr. Gary S. Sy

VULs versus UITFs and mutual funds

Posted in Investment, Personal Finance, Tips by Erineus on February 3, 2009

Pooled funds such as unit investment trust funds (UITFs) and mutual funds have become popular investing vehicles for Filipinos. Insurance companies have jumped on the bandwagon with variable unit-linked life insurance products, or VULs, which have been driving the growth of their industry, thanks to potentially higher returns than traditional policies. Unit-linked insurance (also called variable universal life insurance) offers the security of insurance protection via term coverage, together with the opportunity to participate in potentially unlimited growth via mutual fund investments.

Suddenly, life insurance has been given a face-lift of sorts, becoming more attractive to more and more consumers. But with mutual fund companies and trust departments vying for your savings, which one should you choose? The main selling point for variable life insurance is that “you get the best of both worlds.” That is, you get protection coverage and capital appreciation through the convenience of just one product. Ironically, this can be a double-edge sword – the advantage can be a disadvantage. There are two arguments to consider:

Argument against VULs: You get the best of both worlds … but your money doesn’t work as hard. If your premiums pay for insurance and investment, this then begs the question of whether you should even bother with the protection element instead of simply putting your money in standalone investment funds.

With mutual funds and UITFs, the entire sum, save for the sales load in front-end transactions, is invested in the fund of choice. With variable universal life insurance, your money is allocated towards paying for the insurance coverage and purchasing shares of the investment fund you wish to participate in. Under this setup, it would appear that investing purely in pure investment funds has an edge, as everything is put in the pot for growth and appreciation.

Argument for VULs: You get the best of both worlds … and can actually produce higher returns. However, there’s another way of looking at this. While VULs may split your resources in two, resulting in a smaller amount being diverted to the investment portion, if for some unforeseen event, you suffer from a disability or accident or – heaven forbid – you lose your life, your insurance benefits will kick in. It may sound morbid and insensitive, but the return on your investment can’t be matched by any other pooled investment.

If you avail of a host of benefits known as riders, such as critical illness or accidental dismemberment, you get sums over and above the basic life insurance coverage for the treatment of dreaded diseases or compensation for a disability resulting from an accident.

In the long run, a dedicated fund for such contingencies may be one of the most economical hedges against unforeseen health-related expenses. Such need-specific riders are only available as add-ons to unit-linked products – something that cannot be done with pure mutual funds. That said, what you stand to earn in a mutual fund placement may only wind up depleted by the very same contingencies the above riders can help provide for.

The bottom line is that there is a place for both unit-linked products and standalone investment funds. We need only to remember one of the basic principles of investing, and that is diversification. Whether you are single, married, with or without dependents, there is merit in investing in life insurance products that offer both protection against various contingencies as well as competitive returns. Beyond that, there is also an argument for investing in pure growth instruments such as mutual funds. One does not necessarily take the place of the other. Instead, both are sound alternatives to take advantage of in the constant fight against uncertainties, inflation, and catastrophic events.

(This article is from MoneySense, the country’s first and only personal finance magazine. Visit www.moneysense.com.ph for more.)

By Rosario Santiago
First Posted 13:01:00 01/15/2009

Investment guide for 2009

Posted in Investment, Personal Finance, Tips by Erineus on February 3, 2009

IF INVESTING HAD YOU FLUMMOXED IN 2008 like most individuals who put money in stocks, bonds, mutual funds and other forms of investments, you might be looking for a big rock to hide under this year hoping that when you wake up, the markets have finally turned.

Since Wall Street has begun to seriously doubt widely held beliefs about investing in the face of the worst financial crisis after the Great Depression, how can a small market like the Philippines escape such a bearish outlook?

It appears, however, that the old saying about optimism and Filipinos still holds true–even in personal investing.

An online survey at Inquirer.net shows that Filipinos are not about to throw in the towel when it comes to growing their personal investments. In fact, they plan to invest more by spending less, keep contributing to retirement plans, and continue paying for real estate purchases.

Cautious optimism

Granted, an online weblog is hardly a scientific way of measuring investor sentiment and the learnings are anecdotal at best. Still, they provide information that are not readily available.

“I am in my late 20s and when I saw the stock market go down more than 40 percent, I aggressively invested a significant amount of my portfolio in depressed stocks. I believe in two years’ time, earnings will bounce back and stocks will rebound. Who knows, we may have the same boom as year 2006,” says JM.

Most of those who responded echoed his outlook. Of course, some were more cautious.

“If your timeframe is 20 to 30 years ahead, then I don’t see a need to enter now. Better wait for a clear trend to emerge. Currently it is down, so stay out. Once an uptrend resumes, then enter. Bull markets take five to seven years to unfold, so no harm done if you miss a year or two,” says Melvin.

Chase Yap, vice president at 2TradeAsia.com, says in the fourth quarter of 2008, some investors have started to come back to the market albeit very cautiously.

He says the roller coaster ride in equities last year has made investors look hard at their trading behavior and it also gave them a chance to fine-tune their strategies for the future.

Experts also believe that 2009 will be a tough year for personal investing because it’s at the tail-end of years of unnatural market movements.

“In my thinking, the natural movement of a market is two steps forward and one step backward. This comes from observation, not theory. It’s not unusual for a market to pause every now and then. If a market does not rest, it will get sick just like a person who works five days without sleeping,” says Alexander Gilles, a chartered financial analyst.

World markets Japan, Europe, the United States, and the rest of the world including the Philippines were all on the way up for five or four years starting in 2004.

“That’s not normal. That’s like a guy walking with left foot, left foot, left foot and then right foot. Normally, markets go zigzag and if they go up nonstop, there’s going to be a difficult fall after that,” he says.


Difficult fall notwithstanding, gains in personal investing are not impossible for the long-term especially if certain guideposts are heeded. Yap says there are still things that remain true even in this very bearish market, and these include the following guideposts:

1. Examine your investment objectives. Most individual investors, whether in the Philippines or in more advanced markets, are obsessed with the Holy Grail of high returns without first understanding their investment objectives. Gilles recommends finding out first if you prefer rising share prices or a steady stream of dividends or both. In the case of bonds, bond principal plus the coupon account for total return.

“Either you want your money to compound year after year through interest or capital gains, or you want to draw down on income or cash dividends. Or you want both,” he said.

For 2TradeAsia.comís Yap, the bear market in 2008 made dividend-paying stocks shine.

“Dividends are particularly useful in a down market when it’s not easy to sell your shares for cash. Dividends give you a cash flow on your stocks and give you an option not to sell at low prices,” he says.

Brokerage analysts have often identified Manila Water, Philippine Long Distance Telephone Co., Bank of the Philippine Islands and Globe Telecommunications to pay good dividends even in market downturns. In 2007, PLDT gave its shareholders up to 70 percent of the previous year’s income as dividends while BPI gave out 90 percent inclusive of special dividends.

Carefully thinking through investment objectives requires a careful look at unique, individual needs. If Junior is going to college in four years’ time, for example, you would need cash on the fourth year but still need to grow the remaining amount of the college pot for the following years he would have to burn his eyebrows studying. Instead of merely looking for an investment with the best returns, crunch the numbers for a clearer idea what investments to choose.

“It’s like looking at a car. You don’t just look at the tires and the paint. You have to look at the engine,” says Gilles.

Time horizon

2. Determine your time horizon. When stock investments are tanking, it’s not easy to keep a recovery image glued in your mind’s eye, but over 75 years in US market history and 25 years in the Philippines show that they do recover.

“Think in terms of 10 years, not 20 days,” says Gilles. Although that’s conventional wisdom that US investors are beginning to doubt now because of the current crisis, Gilles and Yap insist that stocks do recover in the long term.

“For a 20-year or 40-year time horizon, you would not hesitate to get into an equity investment even in this depressed market. Stocks go up 15 percent to 25 percent a year in a horizon of 20-40 years,” Gilles says.

Yap explains that those in their 20s to 30s who still have many working years ahead of them can assume more risks and lean more toward equities and less toward bonds. The opposite is true for those in the home stretch, say in their 50s to 60s, who should be looking more toward secure fixed-income investments.

“If I am in my 60s, I would have a good 70 percent of my investment in fixed income to have that peace of mind,” he says.

Those in their 40s who have a good 20 or 30 years to work can still take some risk and should put half in stocks and half in bonds.

3. Examine your ability to take risks. Ask yourself if you can take the tension and the stress of market volatility. If you can’t, stay out of the market and prepare to get by with a return of 2 percent a year from bank deposits.

“Only people who can take the stress will win. You can stick to time deposits but you will never achieve your investment objectives. You go in there with a fearful attitude, nothing will work,” says Gilles.

Knowing yourself, however, is not as easy as it sounds. Sometimes, investors who think they are risk takers find themselves shaking when the market is under severe volatility. But here are some clues: Gilles says that some indications of ability to take risks include being entrepreneurial, a liking for adventure sports, meeting different kinds of people and the ability to driving fast but safe.

4. Take a view, justify it and make a bet. Part of investing is the capability to process what is going on in the economy, taking a view and making a bet. Blaming other people for investment mistakes, especially in a bear market, may be what most people resort to but it is never helpful, says Gilles.

“The people who sell during a slump, like now, are afraid that prices will go lower,” Gilles says.

But he explains that for the market to go lower, this would imply that the Philippines has a growing budget deficit, a growing current account deficit and capital account deficit, which it doesn’t have. It would imply that the country is 80 percent dependent on foreign oil like in 1980, which it is not. It would imply that interest rates and inflation are worsening–all trends that are quite the opposite of what is happening.

“(Fear that the market will go down in the long-term) is totally nonsense because it implies a whole set of assumptions which are false,” Gilles adds. “If you are gloomy, ask yourself whether you have justification or whether you are gloomy just because everyone else is gloomy,” he says.

5. Seek investment counseling. Following hot investment tips is a sure sign of amateur investing, and will burn anyone. Serious investors go for investment counseling from qualified professionals instead of looking for hot tips.

“You cannot generalize. Some people can take the tension, some cannot. You need a deeper, customized, individualized portfolio consultancy,” Gilles says.

Investors who develop ulcers watching market volatility may either make do with the comforting staidness of time deposits or get a professional to do the driving of their investments for them.

Whether considering investments in stocks, bonds, mutual funds, bank instruments, properties and other tangible assets, own business, venture capital or private equity, experts still think following sound guidelines will give good long-term returns–even in a bear market largely expected for 2009.

(For more personal finance articles, go to MoneySmarts at http://blogs.inquirer.net/moneysmarts .)

By Ma. Salve Duplito
First Posted 21:37:00 01/11/2009

How to extend your appliances’ life

Posted in Leisure, Lifestyle, Personal Finance, Tips by Erineus on February 3, 2009

Homeowners can significantly extend the life of major household appliances by observing preventive maintenance. This helps keep devices running as smoothly and as long as possible. Repairs cost money but replacing a major appliance can really dent one’s budget.

Save thousands of pesos with these preventive maintenance tips shared by Orland Rivera and Rodel Villamor of Western Marketing, Festival Mall Alabang branch and main office, respectively; Joel Tiu of Ansons Makati: and Robert Rosete of eShop Computers in Alabang, Muntinlupa.

A word of caution: always remember to disconnect plugs from the power source before you start cleaning.

Washing machine – Make sure this is set up on an even flat surface. Unbalanced machines cause uneven distribution of wash loads and may cause the appliance to “walk” or move little by little, which can eventually damage the barrel.

Don’t load your wash to above the maximum capacity (i.e., stick to 5.5 kg or less if your machine says 5.5 kg!). Every six months, check the hose for leaks and kinks, and replace promptly if needed as cracked hoses waste water. Periodically clean the lint screen by turning it inside out and washing it with soap and warm water to eliminate buildups. Check the hose vent for clogs.

Refrigerator – After delivery of a new ref, wait at least eight to 10 hours before plugging in. Let the Freon settle down first. If you live in areas where electricity fluctuates, protect your ref with an auto-voltage regulator (AVR).

Don’t load too many food items inside the ref; this makes the blower work harder. Twice a year, clean the condenser coils located either at the back (for older models) or the front (newer models have grills that cover the coils near the bottom) of your ref.

When defrosting freezers, never scrape ice from the walls to avoid damaging the appliance. Merely turn off the ref and remove all the food. Clean the ref’s interior while you’re at it. To check the gasket, close the door on a piece of paper and pull. If it easily slides out, it’s time to replace the seal.

Air conditioner – Always follow the rule of starting the aircon in fan setting for a minimum of three minutes before turning it up to high-cool to avoid overworking the compressor. Sustain airflow by cleaning the filter monthly with soapy water and a soft toothbrush. Wipe the exterior with a damp cloth and remove all debris from the central air unit to maximize air current.

Electric fan – Once a week, remove and clean the blade and grills. If you are adept at dismantling things, you can remove the shaft and apply industrial grease/oil to postpone wear and tear of the bushing parts. Let the grease dry for about three hours before using the unit again so the oil won’t enter the motor.

Television and DVD player – Avoid placing the TV near a window where splashes of rain could damage the circuits. Wipe the exterior with a damp cloth. Clean DVD players using a commercial disk cleaner once a month and remember to wipe CDs thoroughly with a soft, non-abrasive cloth before playing. Take good care of the remote controls as well.

Microwave – Never put any metals inside (and that includes aluminum foil!) and don’t let splattered food stay inside for long. Use only microwavable dishes for heating. Before cleaning, heat a cup of water with a teaspoon of baking soda in a bowl for three minutes. This makes it easy to wipe off all sticky food particles with a sponge or soft cloth right after. Don’t forget to clean the door gasket too.

Rice cooker – Dry the bottom of the pot before putting it over the hot plate every time you cook rice. Position the cooker on a flat, even surface. Clean up any overflow on the sides right after cooking.

Electric air pot – Always boil water at the correct water level. Avert or remove hard water deposits by pouring pure white vinegar just above the water stain. Boil in one cycle, leave overnight, then clean as usual. Remind members of the family to gently press on the controls so as not to damage the pads.

Avoid abusing and misusing your appliances so that they last longer. By finding time to make preventive maintenance a habit, you not only get the most out of your home appliances, you also save money in the process. In this case, the old maxim “an ounce of prevention” is certainly “better than a pound of cure.”

(This article is from MoneySense, the country’s first and only personal finance magazine. Visit http://www.moneysense.com.ph for more.)

By Ruth Manimtim-Floresca
First Posted 13:08:00 01/08/2009

TAKE CHARGE OF YOUR MONEY Good debt vs. bad debt

Posted in Personal Finance, Tips by Erineus on February 3, 2009

(This is part of Take Charge of Your Money , a partnership between INQUIRER.net and Citibank to help readers handle their personal finances well.)

Question: I’m thinking of taking steps to improve my family’s life this 2009. For starters, we’d like to buy a house so we can stop renting. It would also be good if we can get a car so it won’t be hard to get around with my family–a wife and two small kids. To do all these, I’m hoping to get a loan from the bank. Is this good or bad, considering the state of the world economy? I don’t like having debts to pay, but if I don’t avail of a loan, it would take me forever to save up for a house and a car. – Joseph

Answer: Most people who buy cars and homes for their families do not have the cash saved up to pay off these purchases right away. If they did, they would be millionaires and part of the upper crust of society. Almost all home buyers and new car owners avail of loans which will allow them to enjoy a new home and a car now and amortize the cost of buying them over a number of years.

Although you don’t like going into debt, this may be one time when it would be good to go into debt. There is such a thing as good debt and bad debt.

Good debt is when you avail of a loan to buy an asset that would appreciate over time or will give you good value or use over the years. Examples of good debt include availing of a loan to buy a house or fund a business that would generate income for you.

Bad debt, on the other hand, is availing of a loan that would be used to purchase something that would depreciate or decrease in value over time. This will cost you more over the years.

Debts have a cost attached to them. You have to pay for the cost of borrowing, which is interest. And when you miss a payment, you would also have to pay other charges including penalties, depending on what’s covered in your loan contract.

Debts are a great responsibility. If you default on a loan, your credit history will be affected, which may disqualify you from taking another loan in the future. This is why one should think twice about going into debt. If you can, take only good debt.

If you are serious about availing of a loan, heed our tips to make the most of it:
1. When choosing a home, consider its location. It should have the potential to appreciate in value over time. Some indicators of good location and appreciating value include proximity to schools, shopping malls, business districts, and commercial areas. Visit the location first before committing to buy a home.
2. Think of ways to maximize the use of the asset you’re buying. For instance, you can rent out the property if your family will not use it as a residence, or rent out one room to a boarder. If you are getting a car, consider carpooling so as to lower your gasoline cost.
3. Shop around for the best terms before signing on the dotted line. Go to several banks and financing companies and compare rates and other terms. Generally, in-house financing offered by real estate companies and car companies are the most expensive. Choose the one that offers the best.
4. Find ways to lower your cost of borrowing. Check out loans available with the Social Security System, Government Service Insurance System, and PAG-IBIG Fund. If you are buying a car, consider trading in your old one to lower the cost of purchasing a new car. It may even be wiser to buy a one-year-old car than a brand new one. It will be cheaper, yet still give you good mileage.
5. Always read the fine print before signing documents. Read about penalties, defaults, and the like. Find out if there are penalties for prepayments. If none, pay off the loan faster if you can to save on interest expense.
6. Safeguard loan documents. Keep them in a safe place but make sure your spouse knows where these can be located.

A debt can be a good tool to secure your financial future. Go into it only after careful thought and manage it well.

(INQUIRER.net and Citibank invite readers to ask questions regarding financial matters. Send your questions to personal_finance@inquirer.net or comment through our personal finance blog called MoneySmarts )

*Disclaimer: Readers are solely responsible for their own investment decisions and should thus conduct their own research and due diligence and obtain professional advice. INQUIRER.net will not be liable for any loss or damage caused by a reader’s reliance on information obtained from our web site. INQUIRER.net receives no compensation of any kind from companies or industries or funds that are mentioned here.

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First Posted 16:45:00 01/13/2009

TAKE CHARGE OF YOUR MONEY: How to make a spending plan

Posted in Personal Finance, Tips by Erineus on February 3, 2009

(This is part of Take Charge of Your Money , a partnership between INQUIRER.net and Citibank to help readers handle their personal finances well.)

Question: The year 2009 doesn’t seem to be starting out right for me. We just got word that our company will be downsizing, and that means some of us will be let go. People are telling me to make a budget, but I think what I need is not a saving plan, rather a spending plan to know ahead what my bills are. Can you help me make one? – Adel

Answer: Financial experts tell us that this year will be a hard one. Unemployment is on the rise, not just in countries like the US, but also closer to home. News reports say that the contracts of Overseas Filipino workers in Asian countries are not being renewed, and some companies are planning layoffs.

You’re not alone in being anxious about losing a job. But add to it the fact that you have bills to pay and if you don’t have enough savings, you’re in for some belt tightening this year.

This is exactly why you need a spending plan or a budget. A budget is the very tonic many households need. It is a guide to help you be wise about spending so your needs are met foremost.

According to Use Credit Wisely, a booklet published by Citibank Philippines, a budget can help you:
1. take control of your finances
2. keep out of financial trouble
3. become a smarter consumer
4. set and achieve financial goals
5. pave the way to a secure future

A budget doesn’t have to be painful or difficult. You should control your budget, not let it control you. To do that, you have to spend some time organizing and planning. Then once you’ve set a budget, it’s easy to maintain.

Here’s how to keep a budget, according to Use Credit Wisely:

1. Set your goals. What is important to you? What do you need? What do you want? Group your goals into short-term, mid-term, and long-term ones.

Short-term goals are those that you will achieve within the year. Examples are paying off credit card debt, purchasing a new appliance, or saving for a vacation. Medium-term goals, such as saving up for down payment on a house or buying new furniture, target the next two to five years. Long-term goals go beyond that, such as retirement and college expenses.

2. Gather information. To capture an accurate picture of your finances, find out how much your household income and expenses are monthly. Look at pay slips, income tax returns, checkbook records, credit card statements, payment information for major purchases such as car loans, and financial statements from banks and financial institutions.

Income may include salaries, interest income, dividends, etc. Expenses may be fixed and variable. Fixed expenses do not change, and one example is rent. Variable expenses change monthly, such as food and gas or transportation.

3. Find out where you stand. Total your income and deduct all your expenses, and you will see how you stand financially. This step should give you an idea about your spending habits.

4. Check your bottom line. This will tell you if you are spending too much. If the difference between your income and expenses is positive, you have discretionary income and can use the amount to meet budget goals and for emergencies.

If it is negative, then you are spending way more than you should and are probably living on credit. Go over your expenses and find out where you can cut down.

5. Keep track of expenses. Start listing down all your expenses daily in a small notebook. Carry the notebook with you everywhere. This way you will see where your money goes.

You will be surprised that you can totally do away with some expenses. Examples are ATM fees when you use another bank’s ATM, or late fees for not paying your bills on time.

You will also be able to identify where you can lower your expenses. For instance, instead of eating breakfast every morning at a fast-food place, eat breakfast at home or bring baon to work. At P100 a day, those fast-food breakfasts will amount to nearly P24,000 a year. Even “fixed” expenses such as electricity can be lowered. Iron all clothes at the same time and use more energy-efficient light bulbs to decrease your power bill.

If you are keeping spending in control, congratulations! You will be able to meet your financial goals in no time. Now try to improve by reducing a different spending category by 5 to 10 percent.

If you still can’t keep to your budget, regain financial control by adjusting your spending. Get your whole family into it. Also, try to increase your income by looking for additional sources. Good luck!

(INQUIRER.net and Citibank invite readers to ask questions regarding financial matters. Send your questions to personal_finance@inquirer.net or comment through our personal finance blog called MoneySmarts )

*Disclaimer: Readers are solely responsible for their own investment decisions and should thus conduct their own research and due diligence and obtain professional advice. INQUIRER.net will not be liable for any loss or damage caused by a reader’s reliance on information obtained from our web site. INQUIRER.net receives no compensation of any kind from companies or industries or funds that are mentioned here.

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First Posted 09:14:00 01/27/2009

Fighting poverty: The missing element

Posted in Poverty, Tips by Erineus on February 2, 2009

FOR YEARS, I HAVE ENDED MY speeches and public presentations to every new audience with a challenge for each of them to help at least one poor family get out of poverty. I call attention to the current official poverty incidence figure of 26.9 percent (as of 2006), which means roughly one out of every four Filipino families is poor. I then point out that this also implies that three out of four are not poor. Thus, to wipe out poverty, we need only one in every three nonpoor Filipino families to care enough to help one poor family get out of poverty. Perhaps, I surmise, if we take our efforts to combat poverty to this individual (“micro”) level of caring and sharing, we could be much more successful at reducing poverty in our midst, as against the more grandiose macro-level programs that government is known for.

Macro interventions

What would it take to help lift a poor family out of poverty? We all know the saying attributed to the Chinese philosopher Confucius: Give a man a fish and you feed him for a day; teach him to fish and you feed him for a lifetime.

Outright dole-outs, of the kind government has lately been handing out a lot of, are clearly merely palliative and will not reduce poverty in the long run. Thus, we’ve also seen a plethora of poverty reduction programs that attempt to provide the things expected to make a long-term difference: Improved education and health services, microfinance and livelihood assistance, housing, safe water and sanitation, and so on. These things have figured in the government plans, programs and annual budgets for decades, and yet widespread poverty has persisted, and reducing poverty has remained the country’s foremost challenge. Indeed, poverty actually worsened since 2003, even in the face of supposedly record economic growth—proving that unqualified economic growth does not necessarily provide the solution either.

Teaching to fish

On a micro level, what would a willing family need to do to “teach another family to fish?” The late Sen. Raul Roco used to profess that having at least one college graduate in a family would surely get it out of poverty, and thus stressed the critical importance of widely accessible education up to the tertiary level. For those who can afford it, a concrete way of helping, then, is to support a promising child of the family through school all the way to the tertiary level, whether college or vocational/technical training as appropriate. My own father has done so almost all of his professional life and on through his retirement, and has reaped the satisfaction of seeing his successful protégés uplift their lives and their families’ well-being and standard of living.

Gawad Kalinga sees decent housing as the critical entry point. Founder Tony Meloto espouses the conviction that once you give poor people middle-class surroundings, they begin to have middle-class dreams. Indeed, the barrier often keeping many of the poor from uplifting their lives is their own selves, when they keep their aspirations low. A foreign colleague told me of a conversation he had with the young son of his Filipino driver, who, when asked what he hoped to be when he grew up, unhesitatingly replied that he wanted to be a driver just like his father. No wonder, my colleague remarked, that too many Filipinos remain poor.

Still another concrete way of helping is to equip a poor family with the means (including skills, values and financial capital) to start and sustain a livelihood enterprise. But time and again, government and nongovernment organizations get a mixed record of success when they try to do this en masse for groups of beneficiaries. My own sense is that such assistance will more likely achieve lasting outcomes when there is a one-to-one nurturing relationship involved, such as what a personal family-to-family hand-holding involvement would provide.

Sharing the Cross

This kind of direct involvement, to my mind, is key. We tend to focus on the receiver and overlook the giver. People who care and are willing to share find greater meaning in their sharing when they are able to somehow share in the pain and suffering of those whom they help. True sharing, in other words, goes both ways. I’m convinced that this is the ingredient that has made Gawad Kalinga catch fire not only in the Philippines but overseas as well. When people are urged to spend weekends enduring pain and strain by literally helping build homes alongside those who will receive them, sharing is brought to a totally different level from simply writing out a check to one’s favored charity. Giving a scholarship directly to one’s chosen poor child and taking a direct concern and involvement in his/her progress through the years is quite different from sending a regular contribution to a scholarship-granting foundation. An entrepreneurial family that hand-holds a poor family into starting and growing an enterprise of their own finds greater meaning in sharing than just pledging a portion of their profits to a livelihood development NGO.

When a disaster-based organization I am part of sought to draw Christian churches into our cause by asking each church to donate a target sum, I suggested that they go beyond that by urging the church members to actually come to our beneficiary sites in Albay, Infanta and Aurora. That way, they could share first hand in the pain of those whose lives they are helping rebuild. Only then do we Christians truly partake of the Cross of Jesus Christ, which is the true meaning of caring and sharing in Christian love. This, to my mind, could very well be the missing element in our poverty reduction efforts all these years.

Comments welcome at chabito@ateneo.edu.

By Cielito Habito
Philippine Daily Inquirer
First Posted 21:09:00 02/01/2009