Making 2016 fruitful and rewarding may be a popular New Year's resolution, but staying true to the goal all throughout one's life is another issue especially when it comes to finances.

While there is the desire for financial stability, most Filipinos claim it is difficult, if not impossible, to attain due to lack of income and poverty.

But for financial guru and life coach Chinkee Tan, having a prosperous life despite shortfalls is achievable if people can change their mindset about handling money.

He said the first step is for people to prioritize saving over spending. He pointed out that the problem with most Filipinos is that they usually allot more to expenditures than to savings, or don't save at all.

“In saving, what is important is not the amount, it’s developing the habit of saving,” he said.

Tan shared his saving formula of "50-25-25", which means one's income should be divided into 50 percent for savings, 25 percent for business start-up, and only 25 percent for expenses. He added that the formula is not a standard but a guide to help people with varying income levels save money.

“I advise people, do not copy the model. You copy the principle. You change the percentage based on your convenience, based on your income capacity,” he said, adding that people can start with a small amount saving allocation and increase it deliberately later on.

Tan pointed out that not only carefree spending of some people gets in the way of saving, but also the inclination towards instant gratification.

He said people usually elevate their lifestyle -- trying out new food, places or gadgets they never had before -- as their income goes up. This becomes a habit that could develop and hard to do away with even to a point of insufficiency, the expert said.

“Nung maliit ang sweldo, napagkakasya. Nung lumaki, nagkulang na may utang pa. Weird eh,” Tan said.

He stressed that people should not compare themselves with others as it leads to "self-pity," inducing one's desire to spend on unnecessary things just to have what others have.

Another is getting rid of enslaving debts and burdening credit cards, Tan said. He added people should reject ways of borrowing money that eventually turns into a cycle, such as pawning ATM cards to lenders.

“You must decide to get out of debt. You got to be sick and tired of your situation. What you tolerate will never change. What you hate, you will change,” Tan said.

“Financial peace is better than financial security. What’s the use of money if you don’t have peace?” he added.


Tan also stressed the value of investing, or keeping a constant income flow especially for breadwinners and retirees.

"There will come a time when you will grow old, the moment you stop working is the moment you stop earning, but you don’t stop spending," he said.

Tan said preparing a "fallback fund" or "income replacement fund" is not like expecting something bad will happen to the earner, but is a prudent practice to sustain a living amid unpredictable and inevitable circumstances that can sweep all money in an instant.

He said people should learn and explore investment instruments which most are unaware of, adding that financial literacy is indispensable in spelling one's success.

However, Tan warned of the rampant investment scams nowadays. He advised people not to invest in something they do not fully understand to avoid being a victim.

“Ignorance is the number one killer when it comes to investment,” he said.

He added that people should not invest out of mere trust and total greed.

“Admit it or not, the people who are closest to us are the people who can hurt us most,” Tan said, adding that people should consult financial experts instead of relatives or friends who have the same limited financial knowledge.

"Scammers play with people’s emotions and greed. When greed comes in, logic goes out,” he said.

The expert recommended investment venues that are regulated by the government such as banks, mutual funds, and unit investment trust fund (UITF).

Tan also urged earners to maximize their core competence or expertise as to open more sources of income and create a consistent cash flow.

“Not everyone can operate a business. Not everyone has the discipline or probably the know-how to start one. But I encourage everyone to have an entrepreneurial mindset,” he said.

Noting that developing the habit of saving and growing an investment take time, Tan said people should be patient and positive about initiating such changes in their lives with 2016 as a good year to start.