5 Things the Filipino Middle Class Should Watch Out For


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5 Things the Filipino Middle Class Should Watch Out For

The Philippine economy has been growing at a very good pace for the past years. More jobs are being created every year, the so called Middle class is growing, and the average Filipino family has more and more to spend.

And while this is a very good thing, today our goal is to remind everyone to not take this economic growth for granted.

May kasabihan tayo, ang buhay ay parang gulong. Minsan nataas ka, minsan nasa baba. At sa panahon natin ngayon, maraming Pilipino ang pataas at pa-asenso ang buhay.

So today, I’d like to address the Filipino middle class – para habang ikaw at ang iyong pamilya ay ‘pataas’. Hindi mo na ulit mararanasan ang buhay na pababa kapag natapos na ang economic boom ng bansa.

So that you won’t have any regrets in the future. So that as you experience financial progress today, your life will continually get better even when the country’s economic growth ends.

With that said, let’s get started with the 5 Things the Filipino Middle Class Should Watch Out For.

#1 Unemployment

01-unemploymentYou might have a very good paying job right now. Whether abroad or in the Philippines. It might be the first time you’re experiencing excess money. Yung panahon na lumipas ang buong buwan, at wow! may natitira ka paring pera. You might be someone who has recently bought their first car, home, or the first time travelling abroad with your family… and yes its good to enjoy your money.

But unemployment is a reality that we should prepare for. Sometimes there are factors beyond our control that could lead to unemployment. For example, the company where you work might go bankrupt due to a government regulation. Or perhaps your employer will undertake some cost-cutting measures to keep the company afloat – and that means firing some workers to make the company more streamlined. And even the most qualified employee will feel insecure when word of poor company performance gets out, because you never know who will be forced to resign first.

Now I don’t mean to scare you here. But it’s good to know this now, so you can prepare.

And how do you prepare for unemployment?

The answer is by having an emergency fund. An emergency fund is savings worth 3 up to 6 months of your monthly expenses. And the purpose of this emergency fund, is so that in the event of sudden unemployment you have a financial buffer to sustain your basic needs. And you don’t have to go into debt, or go to a 5-6.

So that if you suddenly find yourself without a job, you’ll still be able to pay rent, electricity and feed your family. Your emergency fund serves as a buffer and protection until you’re able to find another job.

#2 Inflation

02-inflationInflation is the increase of prices every year. Ang dating piso lang, nagiging 2 pesos na. Pamahal-ng pamahal ang bilihin. Now inflation is a part of every economy. Anywhere you go, prices will tend to go higher year after year after year. And it has become so normal, that people tend to ignore it already.

So how can the middle class prepare or fight inflation?

The answer is by learning how to invest. By learning how to grow your money beyond the usual time deposit.

In the last few years, inflation has ranged from 3-5% per year. But our time deposits has only given about 1% interest per year!
So nagmamahal ang bilihin ng 3-5%. Pero ang pera sa bangko kumikita lang ng 1%. Talong talo ka sa inflation.

So if you’re not yet familiar with bonds, stocks, mutual funds, uitfs, then its time to learn about them. Because its how you can fight inflation.

#3 Health Emergencies

03-health-emergenciesNow by health emergencies, we don’t mean your regular toothache, or fever, or injury. Rather, these are events where you usually end up in the hospital, confined, where at the end you have a medical bill reaching hundreds of thousands of pesos.

Some people will of course have their company healthcare plans and HMOs, while some won’t. Regardless of where you belong, it would be good to prepare.

The first step to preparing for your health emergencies is to actually look at what exact coverage your company provides (also, what they don’t provide).

Then the next step is to start exploring, canvassing and learning about healthcare and insurance plans to fill in the gap. So that when a medical emergency comes, you know you’re covered.

#4 Retirement and the Risk of Working Forever

04-retirement-or-working-foreverLet’s face it, we all have to grow old — time waits for no one. Everyone at some point in their lives will have to stop working – either because you no longer want to work, you body no longer allows you to work, or no one already wants to hire you.

And I’m sure some of you are thinking, “I’m still too young to prepare for my retirement” or “My children will take care of me when I’m old”. Or maybe the government SSS and pension will be enough…

Well, no matter what it is you’re thinking about retirement, it would be good to start planning now.

You don’t need to save now, but at least a plan will do.

Because a plan will reveal to you exactly how much you think you’ll need come your retirement days. Your retirement will be the biggest expense in your life, and it’s coming. Yes its very far off into the future. But its coming. So it would be wise to start preparing for it.

Your retirement will be the biggest expense in your life, and it's coming. Click To Tweet

Now how do you exactly prepare for retirement? There are many ways – but it all start with planning it out first.

(1) When do you want to retire,
(2) how much will you need,
(3) how can you reach that amount.

These are the 3 major questions you need to answer in your plan for retirement.

Again, you’ll want to do this while times are good. Retirement planning will be much tougher the older you get and the longer you wait.

And now last but definitely not the least – on our list of Things the Filipino Middle Class Should Watch Out For….

#5 The Next Generation

05-the-next-generationThis item is not about money. Rather it’s about values and what you’re teaching and passing on to the next generation.

For example, now that times are relatively good, there are some parents who are giving their children everything they need and want without question. But at the same time they are subconsciously training their children to be entitled, and well… spoiled. Rather than pass on the values of hard work, and patience, the next generation learns entitlement and the “I have to have this now” mentality.

Is this what you would want to pass on to your children? This is something everyone should start thinking about.

Another example… we are now witnessing 2nd and 3rd generation OFW families. These are families where the lolo’s and lola’s were OFWs, and the parents were OFWs away from family, and now the children are going abroad also away from their families. What does this tell the next generation?

Now, whether or not you have kids, whether or not you’re an OFW… it still begs to be asked, what values are you passing down to others? Its good to start planning these out early.

And concludes our list on the 5 Things the Pinoy Middle Class Should Watch Out for. To quickly summarize.

1. Unemployment – which you plan for with your Emergency Fund.
2. Inflation – Which you fight by learning how to invest.
3. Health Emergencies – which is address by exploring healthcare and insurance plans.
4. Retirement – Which you absolutely must plan for…
5. The Next Generation – where you answer the question what values are you passing on?

Now we know that all these items aren’t really urgent. There’s really no harm if you ignore them this year, or the next. But all these 5 things all deserve your attention because it will have a huge impact on your future.

06-summaryThe earlier you start thinking and planning out these items, the better. So that you won’t have any regrets in the future. So that you won’t end up asking… “saan ako nagkamali”… So you won’t have to wonder… where did things go wrong…

By planning and preparing early, you won’t have any regrets in the future. Click To Tweet

By planning and preparing early, you won’t have any regrets in the future. So that as you experience financial progress today, your life will continually get better and better and better, and you will win the game of wealth.

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