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Protect and grow your money in times of crisis


. As we continue to ease into the new normal, itsa better time to get our finances back on track

Financial stress during the pandemic? You are not alone. The coronavirus crisis has left around 18 million Filipino families without a stable source of income. As we continue to ease into the new normal, it's a better time to get our finances back on track. Financial coach Chinkee Tan shares his expert advice on better money management to recover from a financial setback.

Change your lifestyle

For some people, borrowing money may be the first solution when facing a financial crisis. However, Chinkee Tan suggests that controlling your expenses should be the priority. You have to “change your lifestyle,” Tan shared in a Zoom interview. “COVID-19 taught us the difference between essentials and non-essentials.”

You must ensure your budget for the essentials first, such as food, utilities, healthcare, savings, and education, before spending on less necessary items. Living within your means will help you pay off your debts faster, save more for the future, and spend money in more meaningful ways.

Create multiple sources of income

Having multiple sources of income can also offer you financial protection and security in times of emergencies. The pandemic has shown a lot of Filipinos that multiple income streams are now a necessity. Tan suggests exploring different business ideas in essential items like food and healthcare or in-demand services like deliveries. You can also look for online job opportunities that are compensated fairly and work with your schedule, skills, and interest.

Build your emergency fund

An emergency fund is your safety net to cover unexpected financial expenses like medical bills or sudden job loss. Tan’s advice is to save at least 6 to 12 months' worth of your total monthly expenses. It should include all the essential expenses in your household. You can always start small when building your emergency fund. The important thing is to continue adding into it until you reach the necessary amount.

Invest safely

Once you have your finances in order, you can grow your money further by learning how to invest it. Investing gives you a source of passive income and can provide long-term financial security. However, you should never invest in something you know nothing about.

The Department of Finance (DOF) has recently exposed malicious ‘cryptocurrency investment schemes’ that have been making rounds on social media. These scams, which are advertised as auto-trading platforms called “Bitcoin Revolution” and “Bitcoin Lifestyle,” are portrayed to be endorsed by government officials (such as President Rodrigo Duterte and Secretary of FinanceCarlos Dominguez III) and popular celebrities (such as Vice Ganda, Boy Abunda, and Angel Locsin), making these schemes look legitimate in the eyes of a novice investor. The DOF refutes the claims made by these ads and calls on the public to avoid engaging with these unregistered and unlicensed cryptocurrency schemes.

The government also seeks to pass economic reforms that would make it easier for Filipinos to invest in legitimate opportunities. The Duterte administration's proposed Passive Income and Financial Intermediaries Taxation Act (PIFITA) aims to ease the tax regime for bonds and stocks by lessening the number of taxes on financial transactions from 80 to 36. If passed, PIFITA would simplify entry into safe and secure investment opportunities for Filipinos looking to gain more income.

If you are offered any type of investment by email, phone, newspaper, or directly by an individual, you must ask these questions first to guarantee their legitimacy.

  • Name and address of the person and company offering the investment plan;
  • Contact details, especially the landline. Do not accept mobile numbers as these are harder to trace; and
  • Securities and Exchange Commission (SEC) Registration as an investment taker.

Be wary if the person or company making the investment offer refuses or is hesitant to give you any of the above information. Check and verify the name of the company from the list of companies who may offer investments as posted on the SEC website. You may also inquire from the SEC Corporate Governance & Finance Department at (02)8818-5476 or from the Markets & Securities Regulation Department at (02) 8818-6080.

Protecting your hard-earned money is just as important as learning how to manage your personal finances during a crisis. To report suspicious investment schemes, you may call the Enforcement and Investor Protection Department of the Securities and Exchange Commission at (02) 8818-6337.

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