Five Six

By Francisco J. Colayco, Ph.D

Joey from the Middle East wrote me that he has been an OFW for so long and yet, instead of saving, he is deep in debt and has borrowing from “five-six” lenders. He doesn't have his own family yet but he supports his parents. Ever since he was young, he did not know how to save and he brought his bad habits even when he was already working. He does not only spend his salary but he borrows to spend as well. All his salary is spent in paying off debts and he continues to borrow.

When he watched me on TV in the Filipino channel, he heard me say that people have to force themselves to save if they want to grow their wealth. He knew that he should save at least 20% of his income but he is unable to implement it. He starts planning to save and sometimes, he is even able to start but he is unable to continue. He starts telling himself “next time na lang” until he gives up again. He even opened a dollar account in 1995 but it stayed with the initial deposit and nothing was added to it thereafter. Even his initial deposit was lost because of inactivity. He even joined Pag-ibig Fund but after three contributions, he gave up.

Joey said that he wants to always have money in his wallet and he promises that he will not spend it. But he always ends up spending it anyway. Everything went downhill when he started borrowing from “5-6” and this has been going on for years now and he cannot seem to get out of it. He is asking for advice.

No amount of advice can be given to Joey if he is not determined to follow it. Perhaps, the fact that he is single does not give him enough incentive to save. He has to have an incentive to save.

Sometimes, the incentive is understanding exactly how much you are worth right now and how much you have lost by not saving and investing. It is probably going to be effective for Joey to use his present discomfort as his real motivator to get out of debt while he is still single and start his journey to financial comfort. You need to realize how much you can save by concentrating only on your Needs and giving up all your Wants until you can afford them. You can learn these from reading this column, books and visiting our website.

One of the most important savings and investments that Joey can do is to pay off all his “5-6” loans. He really just has to cut off all his expenses completely just to pay off these loans. Perhaps, he can find a way to just beg his friends to feed him for the period that he is paying off the loans. But he can only do this if his friends believe that he is really determined to do it this time. Joey has to use his present “pain” for future financial gain.