(This is part 2 of the article. To read part one, click this link FQ Mom Talks to SoMoms Part 1.)
Question 3: After hearing about the many things we have to prepare for financially, like what Peachy said – she bought 16 insurance products, how do we go about that as we also shoulder current living expenses?
As a background to the readers, Peachy is a wife and mom of three girls from AXA Insurance who shared her heart-warming experience with cancer. After having gone through her life-altering experience starting with the discovery of the disease, going through a lot of expensive treatments, and worrying about her young children’s future, she has now bought a total of 16 insurance products that she is still allowed to buy given her condition. She did this by using any increase in income she received to buy additional insurance products. By any count, 16 is really a big number! But then again, insurance is probably the financial instrument that she understands best and is comfortable with.
AXA Insurance gathered the SoMoms as part of their financial literacy program to promote their current marketing drive “Fail Proof Your Future.” The SoMoms requested AXA to get me as the speaker to talk about Financial Literacy, and that’s how I came to this event. AXA assured both the SoMoms and me that there won’t be any hard sell on insurance products during the event. We were told that all the AXA employees who were there at the event were not licensed agents and so no selling would be done, just more on financial literacy and awareness on what’s really happening out there.
Dandee, also from AXA, presented some staggering statistics to jolt everyone to action:
– 8 out of 10 breadwinners fail to safeguard their income (from BSP Consumer Finance Survey, 2012)
– 6 out of 10 seniors fail to prepare for retirement (from BSP Consumer Finance Survey, 2012)
– 7 out of 10 patients fail to prepare for health emergencies (from Philhealth, 2011)
– Only 14 out of 100 students who enter Grade 1 will graduate with a college degree (CHED, 2011)
If the above statistics won’t jolt a mother to do something to safeguard her own family’s welfare, I don’t know what will. However, as I’ve learned in Behavioral Economics, the danger of limiting ourselves to staggering statistics is that we might end up being stifled by the shock and not doing anything. It’s just statistics anyway. So there has to be a single story to make it real. This moves people more to action because it feels more real. It can happen to us!
And I guess all these elements were presented in order to make each of the blogger moms realize and say, “Hey, I really have to do something about this. And since I have a following, I have to write about it so I can help others improve their future.”
I hope they do. Just one friendly reminder to the mommy bloggers: Focusing too much on the turmoil and crisis we want to avoid may make this financial journey something too heavy to carry. And this is something we should avoid. Why? Not to diminish the reality of unfortunate events that come our way and have to prepare for, they’re too heavy to carry for a prolonged period of time. It is stressful and not sustainable to carry this load in a life-long journey. If you notice, in most of my articles I always end with this closing remarks, “Wishing you financial happiness,” and it’s because that’s how I want you to carry on your financial journey. I want the overall mood to be happy peppered with exciting challenges. That’s how it has been for this FQ Mom.
I did not have earth-shaking experiences of bankruptcy, hunger, parents quarrelling about money; neither did I grow up in a rich family. My father was just lucky to have married a great Ilocana money manager. In fact, my parents had their share of financial challenges, but I guess the way they brought us up was to accept what’s there, no need to pretend otherwise. On the other hand, there was no need to feel deprived and kawawa. I thank them for raising all five of us to have confidence and healthy self-esteem that we don’t relate our self-worth to our net asset value.
In my own financial journey I have made it light and fun. I get the kicks when I balance my checkbook in one go! Earlier in life I enjoyed looking at my savings account passbook with my favorite Sanrio characters Lala and Kiki on the cover that encouraged me to save. I like putting seemingly impossible total asset goals in my excel file which contains our Balance Sheet. And can you imagine how happy I get when we achieve them? I enjoy learning more about irrational saving and investing behavior so I can watch out my own. Of course, I also feel sad when our stock investments drastically go down. But I do have my old records to remind me to keep the faith as long as we did our homework.
So to go back to the overwhelmed question of how to set aside for your financial future while you shoulder current living expenses, the best approach is to really set your goals so you can prioritize according to your family’s needs and core values. Put some cash values to your goals. Write down your expenses so that it’s easier for you to cut down on unnecessary ones. Match your goals with the right protection and investment products. You cannot rely on anyone to do all these for you but yourself. You have to study these things little by little.
Try not to be overwhelmed. A father who witnessed his wife go through the physical pain of giving birth said, “If you’ve survived giving birth, you can do anything!” I agree. In fact, you did not just survive giving birth, you’ve survived raising your children with all the challenges of changing times, raging hormones, midlife challenges, etc. Such is life and instead of being daunted, treat them as elements of excitement.
Involve all the members by talking and learning about money as a family. This way you tap all your family members’ talents to achieve your financial goals and you also have more fun doing it together as a family. You will be surprised how much they can contribute. Instead of over-protecting and just worrying about your children’s future, get them involved in the financial goals of your family, and in the process, you arm them with this important life skill – what I call FQ (Financial Intelligence Quotient). I believe this will be your children’s Economic Self-Defense no matter where the economy goes in their adult life.
Once again, let’s all raise our children (and ourselves) to have high FQ!
Wishing you financial happiness,