While I was browsing a business magazine in a hotel lobby a few months back, an article caught my attention - worrisome saving data of Filipino households. According to the National Statistical Coordination Board (NSCB), based on the results of the Family Income and Expenditure Survey (FIES), Filipinos are saving less despite higher income! What is worrisome according to the report is that those who are not saving are also cutting back on important items among them is education.
Based on the FIES result which is conducted every three years the share of savings to family income was 16.5% in 2003 declined to 14.8% in 2006 and only 14.9% in 2009. The 2009 figure means that for every P100.00 family income only P14.00 went to savings. Since these are averages, it is very likely that there are families whose savings rates are much lower or do not have savings at all. The report also presented other worrisome finding:
There were interesting findings which can be useful insights in providing financial planning services to households:
From these findings, the major challenge is how to educate Filipino families to spend money more wisely- less on non-essentials so that they will have more for basic needs. Furthermore, savings should be considered an essential component of the family budget regardless of income levels.
Many Filipinos likewise spend on games of chance which for a wise spender is considered a non essential. Filipinos to get out of the easy money, instant money mentality as reflected in the long queue at lotto ticket outlets. They need to muster discipline and determination to save and learn how to grow their money.
Learn how you can help advocate for a savings mindset among Filipinos and improve their savings rate by starting from your own backyard. Learn how to become your own financial advisor first by attending Wealth Academy seminars of IMG.