A QUOTE by Suze Orman goes, “If you’re not staying on top of your money, you’re putting your financial well-being at risk.”
The current pandemic has brought so many life-altering changes very quickly. Despite the major changes in the last two pandemic years, some things remain the same. People can expect these to stay relevant to their goals moving forward in the “new normal.” Among these is financial literacy.
Knowing how to manage one’s finances wisely is key to staying on top of one’s finances, minimizing financial risks and fulfilling ambitions regardless of economic conditions. Because financial literacy empowers people in living a good life and achieving their life goals, it is at the heart of the corporate social responsibility (CSR) statement of the Philippine Deposit Insurance Corp. (PDIC). It is also a mutual advocacy with the National Economic and Development Authority, the agency mandated under Republic Act No. 10922 to lead the national observance of the “Economic and Financial Literacy Week” every year.
Wise saving habits
When it comes to saving money, one needs both wisdom and consistency. As its CSR program, the PDIC’s “Be A Wise Saver” (Baws) campaign aims to equip as many Filipinos as possible with wise and practical tips to make saving an effective habit through its “7 Habits of a Wise Saver” (“7 Ugali ng Wais na Mag-Iimpok”).
1. Knowing one’s bank (Kilalanin ang inyong bangko). It should be run by a trustworthy and honorable management.
2. Knowing one’s bank products (Pag-aralan ang mga produkto ng bangko). Doing so will help one choose the right one for his needs.
3. Knowing one’s bank’s services and fees (Alamin ang serbisyo ng bangko at kaukulang bayad o fees para dito). Awareness of these will help one transact cost-efficiently.
4. Keeping one’s bank records safe and updated (Ingatan ang mga dokumento mula sa bangko at laging ipa-update ito). These are one’s primary evidence of ownership of bank accounts.
5. Transacting only inside the bank with authorized bank personnel (Gawin lahat ng transaksyon sa awtorisadong empleyado at channels ng bangko lamang). This ensures all transactions are official.
6. Being informed about PDIC deposit insurance—P500,000 per depositor per bank (Maging maalam sa PDIC deposit insurance). Knowing the benefits and limitations of deposit insurance will help one in making informed financial decisions including how much deposits to keep in banks.
7. Being cautious of offers that are too good to be true (Maging maingat at tanggihan ang anumang alok na ‘di kapani-paniwala). Vigilance is key in protecting one’s deposits. Scams and get-rich-quick schemes should be avoided.
To understand these wise saving habits better, its video counterpart is available at PDIC’s YouTube channel, bit.ly/PDIC7Ugali.
Considering the importance of habitually saving, what happens if one fails to be on top of his money? With uncontrolled finances, one is at high risk for expenses chronically exceeding income. This is how one can get buried in debt.
However, not all debts are bad. Used wisely and responsibly, it can help people reach their dreams and fulfill their ambitions. Good debt can help people acquire important but expensive assets that they probably won’t be able to afford paying in cash.
How people can make credit work for them
As statutory liquidator of closed banks, the PDIC is tasked to manage and dispose of the remaining assets of closed banks and to collect from the loan obligations of borrowers. Through the years of collecting from closed bank borrowers, the PDIC observed a number of common debt-related mistakes borrowers make. To avoid some of the common debt-related pitfalls, here are five proactive credit practices identified by the PDIC that can help make debt a blessing rather than a burden:
1. One should carefully read and understand the details of the debt. Knowing the terms and conditions of a loan will help one avoid unpleasant surprises that may put him at risk later.
2. One should take very good care of important loan-related documents and ensure these are always updated. These include official receipts for payments already made and updated statements of account.
3. One should transact only with authorized employees or personnel of lending institutions. If unsure, one should ask to see their IDs.
4. One should always pay on time. Otherwise, one will have to pay more by way of penalties, charges and additional interest.
5. One should immediately work on canceling the mortgage on his collateralized asset and secure its release from the lender. This ensures one will be able to regain full control and ownership of the asset at the soonest possible time.
Closed Bank Loan Incentive Program (Clip)
Borrowers of closed banks also tend to think their loans are extinguished when their banks close. This is not the case as the PDIC is mandated to collect loan payments as part of the liquidation process to optimize recoveries of creditors and uninsured depositors of their funds.
To help closed bank borrowers pay off their loans, the PDIC rolled out its Clip this year. Clip is an easy payment and zero penalty initiative to assist borrowers of closed banks. The incentives will help them to immediately settle their outstanding loans, enabling borrowers to maintain their credit worthiness.
Clip offers substantial discounts to closed bank borrowers with principal loan balances of P1 million and below who will opt to pay through a one-time cash settlement. For more information on the incentive program, one can visit the PDIC’s website at www.pdic.gov.ph/CLIP, send an email to clip-pad@pdic.gov.ph, or send a personal message via facebook.com/OfficialPDIC. SPONSORED CONTENT