The Filipino culture pushes every Pinoy to avail loans. As an example is the saying that "mag loan ka sa SSS para lumaki ung pwede mo i-loan in the future" have you heard of this statement before? I have heard it several times.. and just like you, (or maybe not) I had an SSS loan when I was employed.
The Filipino culture pushes us na maging gaya gaya. I remember, when I was in grade school, merong negative na pag uugali ang mga pinoy and I believe it has an impact on our financial habits. Nandyan yung kailangan magpa impress kahit di naman dapat? I have seen families broken because of financial struggles. Others, just because of utang na loob, they feel obliged of paying for whatever means even the loan has been paid off.
Ang isa pa na naka ugalian ng mga pinoy ay gawing retirement program ang mga anak or emergency fund ang parents... At dahil hindi standard sa atin ang lumago ang financial knowledge, a typical pinoy will find himself drowned in debts.
image source: http://www.kiplinger.com/slideshow/credit/T025-S001-proven-tactics-to-overcome-big-debts/index.html
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Household liabilities are in the form of consumer and real property loans
With respect to liabilities, few households had outstanding loans on their residence (3.7 percent) and other real property (5.8 percent). A bigger percentage of households had outstanding consumer loans such as motor vehicle loans (13.5 percent); personal, salary, all purpose loans (20.9 percent); and credit card loans (3.9 percent).
The main sources of funds of households vary by type of loan. These included government housing institutions and money lenders for real estate loans; in-house financing for motor vehicle and appliance loans; banks for credit card loans; and money lenders and cooperatives for other loans.
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There is another portion of the demographics who wants to get out of this trap, and there is something inside that really wants to break Free!!!
It is not difficult to get out of debt, nor easy. But it is important to be humble enough to accept that you have debts. Also, wag tayo mahihiya that we are willing to make things better for us and our family. So how do you start?
1. Make an inventory of your debts, the interest rate and the amount that you pay for each month
In this way, you will be able to prioritize which is which. Which debts should be paid off first. Either you pay off the one with the highest interest rate or use "Snowball Effect" (CTTO Dave Ramsey). By using the Snowball effect, you will pay off the ones with the smallest interest rate first.
2. Update your SALN (Statements of Assets and Liabilities)
I have clients who were able to write off debts because we were able to identify, which assets (paper assets, movable assets etc) can be a source to pay off debts
3. Look for a Loan Restructuring Program that can help minimize or eliminate the loans should none of your Assets can be used to pay off debts
4. Finally, never get into bad debts anymore.
Disclaimer: If extended family is involved, it is a different story :)
I am also a typical pinoy, there are debts in the past that I am still paying today. However, with courage I am committed to make the best future possible for the generations to come. I am committed to change lives too!
If you need help, shoot me an email, FB me Or refer me to someone you know who is having sleepless nights because of debts.
Debts can be G.O.O.D (Getting Out of Debt) after all.
Jendee S. De Guzman, RFP
Associate Financial Planner – (AFP)
Chartered Trust and Estate Planner - Graduate
Life Insurance Advocate
jendeesapo@gmail.com
jendeesapo@gmail.com
