Happy New Year to all!

At the end and at the beginning of the year, people are more aware of the need to change our ways. This email will require three parts so I hope you will follow the replies in the next issues.

“I got to read your article in the GMA news TV blogger section... I have been searching for a financial adviser for some time now...I believe I need one because I can't seem to really get a grip on my money.

I spend so much that I have maxed out my credit cards (there's two of them) and I have a personal loan. I've gotten myself out of my financial mess before and just when all was doing fine, I'm back in this messy game of debts.

I am a fan of some US financial advisers and I try to do what they say which is why I got myself out of debt also before. I have started saving automatically via our company's coop that automatically deducts my advised amount every payday. I've set up a checking account and a savings account as well.

Unfortunately, it's only the coop savings that is intact right now and I now believe I know the answer...If money is easily accessible to me, I tend to find ways to spend withdraw and spend them. That is why the coop money is hard to spend – it takes time and a lot of paper work to withdraw it so I lose heart to do so.

With this realization, I know that if I am to save, I should do it automatically and it must be in a place that is not as accessible as a savings or even checking account. And that someone whom I can trust so that I don’t backslide must monitor me.

I am drowning in credit card and personal loan mistakes I have made which affect my daily expenses, my daughter's education college plan and my life insurance payments and all these are starting to affect my relationship with my husband...I want to fix my financial mess and save and even invest later on...but I need someone to help me...

I am a manager in a top company and I earn a good salary but it still doesn't seem enough. I hope you could help me (or refer someone who could help me with step 1 all the way to financial wellness) because I am seriously in need of it...”

My reply:

Thank you for trusting us enough to explain your situation. You have gotten out of debt before so obviously, you can be a determined and disciplined person, if you want to be.

As with many other persons, success probably made it is easy for you to find excuses and backslide believing that you can get out of problems should these crop up again.

Your favorite US financial advisers are very good financial advisers and following their advice got you started on the right path.
When you read and listen to them today, they do not say anything different from the first time that you encountered them because their principles are solid and will not change.

You need to review what you did before and what has changed that made you forget the principles that you were following.

You mentioned that automatic deductions to be invested in your company coop prevent you from spending because it is not easily accessible. This seems to show that the items you were spending for were not really that important. If the expenses were so important, then, no matter how difficult, you would get your coop money.

A personal loan of P90k also requires documentation and yet you availed of it. There must have been a special reason unless that was done through a credit card as well which made it so easy.

You know the principles and yet you seemed to have forgotten them when you were not longer in debt. While you could have a financial adviser, a real one will not/should not hold your money for you.

Perhaps, it is best to solve your problem with your whole family involved including your child if possible so she can understand the need to cut down on expenses.

We suggest that you sit down with your husband and put everything down in writing. As we always remind people, money is a family matter. And when the family is involved, solutions to money problems readily present themselves and become relatively doable.

Review all your "mistakes" by examining exactly where the money went and then seriously begin to establish financial goals with specific time lines. It's time to really execute your own purpose-driven saving & investing.

It is imperative though that you first prepare your latest family Statement of Assets and Liabilities and your Personal Income and Expense Statement. These will be your baseline for moving forward to instituting your own wealth generation program.

For now, consider “investing in debt” right away. You should start preparing yourself to the possibility of selling all your assets that are not really that important to generate the cash and pay off all your debts starting with the credit cards.

When you finally are able to grow out of debt, you will have that much more free cash to invest for your future.

Write down your new budget. Follow the principle: Income minus Savings equals Expenses.

At the moment your “Savings” are paying off your debts but when these are paid off, you should really actually save the amounts.

Live within the balance by cutting down on your WANTS and strictly spending only on NEEDs until your debts are fully paid.

If you do not know how to make these Statement of Assets and Liabilities (SAL) and Personal Income and Expense Statements (PIES) budget, you can study our publications, which teach you step by step how to do these.

Besides your US financial advisers, you might want to check on my books that give the same principles but for the Filipino audience and our website, www.colaycofoundation.com.

In the final analysis, you can get out of your financial problems again. However, do not make this a habit.

What you are losing in the process is the time to be able to prepare for your future. You are giving yourself very temporary “pleasures.”

In fact, just after a few weeks after spending, you already have pain and worry because you are unable to pay for your credit card bill.
You have a very good job but you will not have it forever. Use the time you have left to save for your future because you will need it.

In the end, your success is really all up to you.

I would like to add my comment to other emails with similar requests for financial advice.

When you look for a Financial Advisor, I will always ask you to study, not just read, my books first.

For the amount of information you will get, the books are well worth the price. In addition, if you write or visit Colayco Foundation for Education (CFE), we offer you all the options that we know to be good and provide you the names and websites you can visit and study.

Our books, in particular "Making Your Money Work" will be really helpful for choosing the options.

It is not only a matter of knowing how to compute, it is important to understand the principles that go into personal financial planning. You need to understand the principles that are important to move forward.

Remember that when you talk to a Financial Adviser, you will also need to openly show all your SAL and PIES details for them to help you. There will also be a fee unless you go to one who is actually an agent of an insurance or investment company trying to sell you his options.

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