Financial Literacy

Welcome to this blog of financial literacy.

I'm not a master in financial (not yet). But I love to incorporate my knowledge in financial and share to everyone on what I usually do to be financially free (from debts and have more savings).

Financial skills, knowledge and application is the answer to financial freedom for a lifetime. That is, more than just comparing prices, balancing books, or getting a job.  These include long term vision in planning the future through discipline in applying the knowledge and skills everyday. 

We are so great in teaching children how to read and write but we fail to give them response in teaching financial literacy. As a result, only few people know to manage their own finances. Many of us today are in financial trouble. The reason? Lack of financial literacy and its application, failure to discipline oneself in spending, limited knowledge of leveraging income, and failure to determine financial goals.

Often, we are taught to be excellent at school in our primary years so we can enter at the best universities when we reach college then find a better job. We have this mindset that through getting a better job, we improve our lives. However, as we landed different jobs, we begin to see the reality.

If we are to follow the standard paradigm- going to school, finished studies, and get a job, there are many instances that we acquire more liabilities that we usually think are assets. We buy cellphones and other gadgets on installment bases. We think they are investments yet in fact they don't give us returns. When we get our salary, we'll never be contented.. the higher the salary, the more our wants. Yes, you might have landed with many jobs in a year then realize that life has not become better even after pay has increased. As you receive your salary every payday, you have to set aside the amount for bills, the budget for the next two weeks before reaching another payday. The remaining amount goes to miscellaneous expense: shopping and travel perhaps. The problem is, there isn’t enough money left for us when emergency comes. We are only busy in making money to finance our current needs without leaving a portion for the future. As a result, most of us go to different financial institution to borrow money for emergency reasons.   

Imagine you have borrowed money then have few months to return the money plus interest. Few months later another emergency comes then again, you borrow money. You borrow money endlessly as you are always short in cash, as always said, you can't control things to happen and not. Worst is, when your time comes and your family is left with nothing but debts. The question is, will your family survive (without you)? Will they miss you when you're gone? Or will they curse your death because of so much debts and pain you left?

Being born poor is not your fault but it’s your responsibility to grow and improve your life, and your fault alone when you die poor (Bill Gates). If only we have a little concern for our future, we would have done what's supposed to be done today so we won’t be helpless when needs arise.

Managing ones finances is not just by cutting off the wants or limiting the expenses. It involves saving and making use of your saved resources to gain more in the future. It is more than saving the money in the bank.

There's one old man shared with me his regrets... “If only I have known financial literacy when I was at your age, I would have not spent more but save more. I would have more savings to invest and make them millions until I retire. Now that I'm 50 years old, I should have millions and spend the rest of my days with my wife, perhaps roaming around the world. But what happened right now is a total opposite. Because I chose to be a happy go lucky at my younger years, I wasn’t worried about my future. I was thinking that there will be many years for me to work and earn without realizing that the more I age the lesser the years to do more. Look at me now, instead of enjoying my life at this age, I couldn’t do it but work for more instead. I’m afraid that when I leave the world one day, I’d leave nothing for my wife and children but debts and pain memories, that’s why I’m still working and trying to earn a little. If only I could turn back time”.

There are some who doesn’t pay attention about the future because they only think that “there is always a God who can provide future needs”. But when the future comes with so many troubles, they blame God (which I don’t understand) for having nothing when emergency arises. Not all of us realize that God always helps us in the form of knowledge or awareness, so we can be better and protect ourselves. In return, we share the knowledge that God has provided to us.


Financial literacy is awareness in financial matters. This awareness is being used to take smart decisions in managing your own money, not being managed by your money. It is more than possessing financial knowledge. It is by understanding the financial flow, and through application you’ll gain financial freedom. Through this, you will be ready for the possible risks in life (sickness, disability, retirement when getting old, and death). Gaining financial success doesn’t mean instant success. You gain financial success if you make proper decisions in your personal finances. These include personal cost-cutting (your wants), proper budgeting, and diversification of savings.  The term financial is very broad in proper education in finance, but I’m trying to explain simply the basic information in finance that each can apply in personal finances. So, the three important things in financial success are: when you know the combination of skills in cost-cutting (when you have to stop your habits you know you could lose more money), budgeting (the right allocation of your money for important needs), and cash diversification (making your money grow, not only in the bank).

Cost cutting

Cost cutting is a term usually used by companies to cut off costs: to increase profits or when the company could no longer pay more. The company’s cost reduction measure includes employee pay reduction, layoffs, downsizing a big office to a smaller one, debt restructuring, and other means of reduction.

Cost cutting is proven in business to increase profitability. In addition to personal finances, we include cost cutting to measure future financial success. When you realize your monthly bills always increasing, your bank account or cash on hand decreases. Until you realize one day that the money left in your account or on hand is not enough to compensate all your hard work. And when this happens, you would probably say “life has been incomplete, life has been unfair that others become rich while you’re still poor”. Actually, it’s not because of “them” or the “government” why you remain poor. It’s all because of YOU as you let that happen to you. We do have personal (individual) responsibility that we can’t have others be responsible for ourselves such as how do we make for a living, how we could earn and save more.

There are more ways to get income, more ways to make your money grow and more ways to be financially freedom and become financially successful. Only those who are lazy could think of one or none. Now back to our topic in cost-cutting, the reason why we make this as a first step in financial success is because it is in discipline that we gain more; hence, we save up more. The use of cost-cutting in business is the same in personal finances. We tend to reduce our daily cost for profitability and to save more. It is in cost-cutting that we discipline ourselves from purchasing nonsense things.


Budgeting is a basic term to allocate finances. It's a proactive approach to personal financial planning. It is not depriving oneself, but it's taking control of money. By tracking your spending, you'll know where your money is going every day. It helps you understand your daily spending habits.

Many has found budgeting as hard to implement. This might be the case for those who have lower income thus hard to budget. But, it's not hard actually, it's in self discipline to be motivated to reach your goals to be financially freedom. It's all about making decision and how are you going to distribute your money from paying bills to saving up for emergency, retirement, and investments.

How to budget?

1. Use track money apps. It is an application that you can install on your mobile phone, computer, laptop, and tablet. This "easy to use" app comes with features to track the personal expenses such as household budget, special events budget, and other miscellaneous expenses that are hard to record. This app allows you nominate your spending limits that separates "your wants and needs". You can view the history for your expenses and categorized expenses; it creates reminders for your expenses thru text messages (I use AndroMoney app).

2. Create your budget. Creating a budget reliefs you from the toil of living from one packet. It helps you restructure your money priorities, you'll have the right balance from spending to saving. it helps you pay off your debts, have better plans for big bills, or save up for future purchase.
  • Use a budget planner and keep it always with you before you make any purchases.
  • If you have extra cash from receiving bonuses, additional pay, tax refund etc., look into investing or open a savings account with high interest rates.

More to follow…