Good vs bad debt and other money tips for the New Year


Posted at Jan 02 2018 01:45 PM

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MANILA - Debt should be avoided, unless the money will be used to finance necessities like a house, a financial planner said Tuesday.

Credit cards and money borrowed from lending firms, on the other hand can be considered as "bad debts." Borrowing money for a car can be good or bad depending on one's cash flow, said financial planner Randell Tiongson.

“Bakit ka ba umuutang? Kasi kulang ang pera mo, imbes na mag-adjust ka, tapos next month ganon na naman so lalaki ng lalaki,” Tiongson told DZMM.

(Why do you borrow money? Because you don't have enough. Instead of adjusting, it piles up in the next month and gets bigger.)

Tiongson recommends building an emergency fund equivalent to 3 to 6 months of one's monthly pay. Setting aside an amount each payday can help build the fund, he said.

He also recommends investing in different instruments, depending on one's needs. Property, equities and mutual funds are good starting points, he said.

“Money that is not spent, regardless of where it is, is a good idea,” he said.

Tiongson said people should save and be content with what they have.

“Huwag naman maghahangad ng kung ano ano pa kailangan contentment at the same time, think beyond yourself,” he said. 

(Don't wish for too many things. Contentment, at the same time, think beyond yourself.)