Here are some of the old mindsets that pervaded our thoughts on Personal Finance. How it can be replaced with the new way of thinking? It’s like the old becomes new. Sounds familiar? But that’s the way it should be.
1. Old Mindset – Buy now, pay later.
A. New Mindset – Save now, buy later.
2. Old Mindset – If i win the lotto…
B. New Mindset – You have better chances of getting hit by a lightning than winning the lotto. Instead of betting, why not save the money you are allocating for lotto and put it “to work for you” on a regular basis? How? By saving and investing.
3. Old Mindset – On the sense of Entitlement. We, Filipinos, love and hope to receive “padala” (gifts or souvenir items) from our relatives or friends abroad.
C. New Mindset – Let us work for something we aspire for. Our OFWs migrated to work hard and save for their future, not to send you “padala”. Do away with the “padala” mentality. Save up for something and buy it when you are able. (OFWs mean Overseas Filipino Workers).
4. Old Mindset – When you think about Life Insurance, it gives a negative connotation. It is associated with death, loss, damages, etc. Life Insurance only gives death benefits.
D. New Mindset – The basics of Financial Planning is not only to have adequate protection. More so, it trains you to prepare for the 1. “expected events” like Education (if you have a child) and Retirement (if you are working or have a business); and prepare for the “unexpected events” like Income Protection (if you are the breadwinner, you have to think of your family in case something happens to you) or Medical Needs (medical costs are increasing and you need to have a health fund in case you are hit with a major critical illness). Emphasis is given on preparing for the future.
These days, you can buy Life Insurance that gives Living Benefits and Death Benefits in the form of Variable life or Unit-Linked Investments.
5. Old Mindset – I can buy a lot of things using my credit card and will just pay when able.
E. New Mindset – Being debt-free is the new status symbol according to one of the most admired finance gurus in the country, Randell Tiongson.
6. Old Mindset – I am going to a lot of financial talks seminar this year.
F. New Mindset – Don’t be merely a fan. Be a DOER. The reason why they exists is that they want you to be empowered to shake up and fix your finances.
7. Old Mindset – I rarely decide on financial decisions.
G. New Mindset – Every decision is a financial decision
8. Old Mindset – I’ll get rich quick by getting involved in get rich quick schemes.
H. New Mindset – When you join get rich quick schemes, the one who invited you are the ones who get rich quick!
In hindsight, being prudent is key in managing your resources well. Seek advice from the experts, study, learn how to be a good steward of your finances and put it into practice.
Proverbs 22:3 (NLT): A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.