However, trusting children with cash is at the heart of teaching financial literacy in the home. If we want them to understand money, we have to let them handle money. More importantly, we have to truly empower them to decide, after we have taught them the right principles behind money management.

I know of a mother who was widowed and had to feed and clothe four children alone. Gainful employment was hard to find because she was a homemaker before her husband died. It was very tough for the whole family. (more…)

The holidays — with our natural penchant for gift giving and food-binging — got me to thinking about saving all over again. We always stress the virtue of saving because what we save is the treasure that we bring to the future. But what we often forget is that saving, in practice, does not mean that we should stop spending.

The point of saving is not only to accumulate but also to save for something. We cannot minimize for the sake of minimizing. Ibenizer Scrooge was a miser until the three ghosts put cause-and-effect in perspective. He had that privilege; some of us may come to that conclusion too late. (more…)

You raise a very interesting point Rose and I am very sure that there are a lot of people out there who are asking the very same thing.

From the standpoint of government, taxes are its lifeblood. It does not really matter if we are talking national or local. The plain fact is that tax collections allow the government to provide services to its constituents. (more…)

If we take the labels off the envelopes and make them headings on a notebook or ledger page, we have the modern vision of an envelope system—called an accounts system.  (more…)

Here’s how the add-on rate cheats you: As you pay off a loan, you are gradually reducing the amount of money you have borrowed.  Thus, in the first month after you have borrowed $1,000, your interest charge should be ($1,000 x (.01, the monthly percentage rate) = $10.  If you made a payment of $93.33 after the first month, you’ve paid $10 in interest and $83.33 of the principal.  So, the second month of your loan, you’re not really borrowing $1,000, you’re only borrowing $916.67.  The month’s interest, charge on that amount should be finance charges the second month and for each of the remaining 10 months. (more…)

In reality, a proliferating number of institutions are competing for a relatively fixed number of potential customers, and each of them can compete successfully only by providing services that are superior, more versatile, or less expensive than what the competition has to offer.  You have much to gain from carefully analyzing your financial needs, comparison shopping the markets to satisfy them, and continuously monitoring the market for new, better, or less expensive services.  You can also try to negotiate for better terms in any given transaction—for a better rate on a certificate of deposit, for example, or a lower rate on a loan. (more…)

The reverse mortgage is essentially a home equity loan in reverse—that is, the home serves as collateral for monthly payments that are made to the homeowner and the loan is repaid from the estate of the borrower after his or her death.  Under a typical arrangement, a couple at least 62 years old may borrow up to $700 a month for as long as they live.  Moreover, the monthly payment, because it constitutes a loan rather than income, is tax-free.  Upon death, the loan is repaid through the sale of the home, but usually no other asset of the estate can be used for repayment. (more…)

Buying a house and lot seems like the ideal scenario. But with prohibitive prices or distant locations, it’s not for everyone. And to be sure, some people would rather live in a condominium. For a growing number of Filipinos—whether by force or by choice—their condo has now become their home sweet home. 

If you’re looking for a condominium, you have to decide if you should buy a unit or just rent. Buying of course gives you a sense of ownership, as you own not just your condominium unit but your part of the common areas in the building. You’re in fact a co-owner of the condominium corporation itself.  

Your condo unit can also appreciate in value, making it an investment especially if you sell it later on. It also gives you permanency of address, compared to a renter. It also reflects well on you when you apply for loans. Plus, there are no hassles and headaches in dealing with a landlord (or landlady for that matter) since you’re not a tenant but an owner. (more…)