- The majority of modern Filipinos consider themselves technologically savvy.
- But only 25 percent of adult Filipinos are literate on finance fundamentals.
- Being a financially savvy person simply means you have the experience, discipline, and control over your earnings and expenses.
- Visit The Financial Today’s homepage for more stories.
The majority of modern Filipinos consider themselves technologically savvy. Between August and September 2018, 12,000 high school and college students from 17 countries, including the Philippines, were surveyed by Dell Technologies regarding their views on technology and future careers.
Some 88 percent of Filipino survey respondents aspire to work with new technologies, while 86 percent of respondents are willing to be on-the-job technology mentors to others, and 78 percent can see themselves as their company’s “digital ambassadors.”
How many of us can say we ‘re savvy on our finances too?
S&P conducted its 2014 S&P Rating Services Global Financial Literacy Survey and found that the Philippines ranked in the bottom 30 out of the 144 surveyed countries. Only 25 percent of adult Filipinos are literate on finance fundamentals. The survey was conducted through interviews with 150,000 adults across 144 countries on four basic financial concepts: numeracy (interest), diversification of risks, inflation, and compound interest.
How would you know if you are getting financially savvy? Here are five signs:
1. You are living within your means.
It may seem like a simple question, but it is also an effective one as it forces us to take a closer look at our finances and how they are doing exactly. Do you spend more than you make? Or do you have control over your spending? If you live within your means at the moment, this is a strong sign of financial discipline and savviness.
2. You are starting to build an emergency fund that can cover unforeseen costs.
From a sudden loss of income to injuries or illnesses, it’s critical to have a fund set aside for emergencies. If you’ve recognized the importance of creating an emergency fund and you are on your way to building your pile of cash with at least three to six months worth of your living expenses, then it’s a great sign that you’re getting financially smart.
3. You’re consulting an expert in money management.
If you recognized the need to employ the expertise of a finance professional, then you should consider yourself a financially wise person. Having the services of a wealth management expert will increase your chances of successfully creating and executing a practical plan to meet your long term financial goals.
4. You keep your debt to a minimum.
It’s hard to achieve your financial goals if you allocate the majority of your income each month to debt payments. One easy way to calculate whether you have a reasonable amount of debt is by measuring your Total Debt Ratio or the percentage of your income that goes towards covering all of your regular loan payments including house loans, credit card debts, car loans, gadget loans, and other forms of debts.
All you have to do is calculate the cumulative sum of your monthly debt payments and divide them by your monthly gross income. You should have less than 36 percent of your gross income allocated for debt payments. Exceeding that figure means you have more debt than you should.
5. You keep on finding ways to increase your personal wealth.
Realizing that one source of income will not be enough to help you achieve financial stability means you are beginning to become financially intelligent. By enhancing your understanding of business and investment and starting to put this new knowledge to work, you will be able to build multiple income streams that will help you grow your wealth slowly but surely over time.
Being a financially savvy person simply means you have the experience, discipline, and control over your earnings and expenses. If you show the five money signs that we have just discussed, then you are on the right track to achieve the financial stability that you and your family deserve.