Enslaved

                                                   (photo: barkinka.com)

Way ak kwarta! In an emergency situation, your life could rely on the contents of your wallet. You will be required to have laboratories and if the hospital is run by a private group, you need show money. You will then cling to plastic! But what if the cashier finds nothing on your card since the bank is off-line? And worse, it is already in the middle of the night you could not look for help anywhere.

This situation is realistic there is a need for us to check our lifestyles and our crutches. We rely too much on online banking and we always resort to loans. We spend more than what we earn.

The Bangko Sentral ng Pilipinas’ (BSP) inaugural National Baseline Survey on Financial Inclusion sought to measure the financial literacy of the Filipinos. Its results are troubling. One in four Filipino adults has never experienced saving money in any form, while seven in 10 of those who save choose to keep their money at home (inquirer.net).

Despite this strong record in financial management, a survey conducted by Manulife Investor Sentiment Index (MISI) revealed relatively high levels of personal debt. Four in 10 (41%) Filipino investors carry debt -- the second highest proportion in the region after Malaysia, the insurance firm said.

Some factors may rely on the use of credit to pay for day-to-day living expenses, the report added, while other loan items include children’s current education, and medical expenses, among others. Average debt across age groups stands at P291,582 for those aged below 35; P207,418 for those aged 35 to 49; and P143,958 for those 50 and older (Lopez, 2016).

Financial literacy, according to Mbazigwe (2016) is the ability to understand how money works: how someone makes, manages and invests it, and also expends it (especially when one donates to charity) to help others.

Yet how many households are being hounded by those who will collect their “arawan” and their monthly debts with high interests from banks and other lending institutions? How many Filipinos rely on the banks as their “hope” of being able to cope with the social standards? These are manifestations that we are still incapable of managing our finances well.

One of the worst things about being in debt is the risk it brings into your life. If you’re already in debt and have no emergency savings to fall back on, you’re always just one financial blow away from disaster. A job loss or a major medical crisis could leave you unable to meet the payments on your debt, which could result in: Constant calls from collections agencies; Being sued for nonpayment, and possibly having your wages garnished; Having your car repossessed; Losing your home due to foreclosure or being evicted because you can’t pay your rent; Bankruptcy (Livingston, 2018).

So why not confront the reasons why we are neck-deep with debts?

There is often a common misconception that people find themselves in debt due to living an excessive lifestyle, or going ‘wild in the aisles’ with credit cards and store cards. The truth might surprise you: unemployment and redundancy are actually the most common triggers for debt problems, and can happen to anyone, no matter what their attitude to money may be.

Whether you’ve lost your job, are suffering from poor mental or physical health or you’ve separated from your partner, changes like this can mean that you struggle to pay your household bills and debts. Having to adjust to such a financial change can be difficult, even if it’s only going to be for the short term.

A lack of energy can make it harder to keep track of money, and rash or unwise decisions, can result in spending money on things people can’t actually afford. In more serious cases, taking time off of work may cause a sudden reduction in a person’s income and being admitted into hospital can also make it harder to keep up to date with bills (mentalhealth.org.uk).

Best, we must live simply. Keeping up with the Joneses will often lure us into wallowing in debts. We simply accept that we only have what we have and confront our deficits in childhood. We could lessen throwing parties and splurging.

These will really help us be in control when emergencies take place.