By Francisco J Colayco


The motherly instinct of a woman is so pervasive.  It practically includes the protection not only of her own children but of everyone she perceives to need her support. This actually starts from childhood as the little girl plays with her doll and little animals that she nurtures.


As the child grows into the adult world, she begins to realize the need for money to get what she wants. Her parents have instructed her and her siblings on the virtues of hard work, thrift, and savings.  However, knowing from experience, most parents only gave general instructions because they themselves did not know the details of how to save and how to grow their savings.  Where then will the child learn?  Unfortunately, even schools do not teach the basic rules of the management of personal money.


Most children who have some basic understanding of the need to save are focused on saving for specific purchases for the future.  As students, they have aspirations that they cannot get with the little money they receive through allowances and gifts.  When they graduate and start earning from a job, it is natural that their immediate reaction is to spend their earnings very quickly.  Worse, they learn to use credit cards and conveniently forget that they have to pay the credit card company for their purchases. 


Who rescues them?  It is usually the mother if she can find a way to do so.  She is the “protector”, remember?  Frequently, her help is even at her expense, using the savings that is actually for herself and her retirement.


Women of substance, women of sacrifice


instinct of a woman


This kind of reaction happens to you, our female reader, again and again in different types of situations.   Buying a child or a grandchild a toy that you really cannot afford and many similar acts.  You sacrifice for those you love and many times, it is the wrong kind of sacrifice.  This is especially wrong if you do not save for your future thinking that someone will take care of you.  You don’t consider that your husband and/or your children might die ahead of you or they might not have the means to take care of you in your old age, even if they wanted to.


Pay yourself first


The foremost commandment that I give to all who want to listen to me is very important to remember and practice.  The First Commandment of Savings:  “Pay Yourself First”.


This means that you follow the main formula:


Income – Savings = Expenses


You make a budget where you deduct maybe 20 percent of your savings first before you even start thinking of your budgeted expenses. 


You might say you don’t have any income because you do not work.  You need not be so strict with yourself.  If you have an allowance or household budget that you control, consider that your income. 


You can just find ways and means to spend within the 80 percent portion to make it fit the needs of your family. If you manage to save more than 20 percent, all the better.  If you are saving and investing using this formula, you should add your “gift” to your favorite loved one in your expenses to form part of your 80 percent.  Or, you could find some kind of sideline to provide you the extra income. 


The types of investments


If you are following the foregoing advice, then you should be so happy and secure, right? 


You cannot end there.  You need to invest your savings in an option that will surely earn you an amount higher than inflation because the value of your money will slowly erode through the years.  If you keep your money in your closet or pillow or just in a savings account, then the amount you saved will buy you much less in the future. If your savings is not sufficient when you cannot earn money anymore, then you will suffer as you will not have enough to sustain your desired lifestyle.  This simply means that you need to learn how to invest your savings properly.


There are two types of investment: lending and ownership.


Putting money in the bank is a lending investment.  Money in your savings account or time deposit is actually your loan to the bank.  In exchange for using your money, the bank pays you interest.  Interest is the fixed income that you get while your money is kept in the bank.  Here, the bank guarantees the payment of interest (depositor’s income) and the principal amount in the deposit. Because of this guarantee, the interest rate is relatively low as the risk of losses to the depositor is also relatively low.


Ownership investment, on the other hand, is actually the acquisition of assets like shares of stock and property with the expectation to periodically earn income generated by the asset and eventually to accumulate gains due to the increase in the value the asset over time.  In ownership investment, gains or losses are actualized only when the asset is sold. 


Generally, ownership investments are more suitable to meet long-term goalsThis should be your goal for your retirement.


At the risk of oversimplifying, you could be guided by the following economic laws:


  1. the higher the return the higher the risk
  2. the longer the investment period, the lower the risk
  3. the longer the time, the higher the return


The time to start saving is now


Note how important it is for you to start saving early.  If you are older, you can no longer take risks as there will be no time to correct mistakes.


Like many people, you will probably tend to think that going into business is the solution to your problem. However, you also have to be prepared and accept the reality that only 5-15 percent of people who start their own business achieve success within the first five years. 


You can only succeed if you are able to adhere to the following four fundamental principles in running a successful business: 


  1. Determined passion
  2. Sustainable market
  3. Capable technology
  4. Dependable accounting


If anything is missing or does not have full commitment, you are better off with another option.


Now, you are probably so excited to have your savings working for you.  Wait! Don’t be so quick to give away your earnings.  Always remember that you cannot share what you do not have.   If you give away all the earnings, you will have nothing or little earnings for yourself or to give away when another emergency arises.  Always exercise caution and prudence.  You need to preserve your savings and capital so you can share more in the future.


There are a few good mutual funds that accept a minimum of P5,000 as an initial investment. Thereafter, you can add P1,000 each time into your account.  You can write us at for the links to these mutual funds.



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