Financial Planning Tips For Women Philippines (Different Life Stages):
Most Filipino households are handled by women who often take on the herculean tasks of managing the cashflow in the family, while striving to maintain a delicate balance between survival and aspiration. But while most Filipinas are entrusted with such financial responsibility, the reality is that we don’t receive any formal education to be financially literate. Thus, the usual “training-making” we women in the family follow are the habits of our mothers.
Though there is nothing wrong with listening to our parents and we do not have intentions of discrediting their beliefs, do note that times are changing and there are a couple of arguments as to why our parents’ Money Advice are not entirely applicable today. With this premise, it is essential for Filipino women to learn about financial planning in the Philippines as it can facilitate financial independence and allow them to better manage household resources. So in this post, we’ll go through the importance of financial planning in the Philippines for women and the steps each woman can take on at every life stage.
The Importance of Financial Planning for Women in the Philippines
First, it is important to know the unique challenges we women face so we can understand more of the importance of curating a financial plan that is tailored to our financial situation – whether single, married, separated, a stay-at-home mom, or an entrepreneur.
Unfair costs that we have to pay for womanhood
The following are some unique challenges women face that our male counterparts don’t equally experience the way we do:
- Career interruption- When a couple welcomes a baby into this world, who usually becomes the primary caregiver? Who takes on the majority of child-rearing? When there are school meetings or a basketball practice, who becomes the default parent in attending those events? Isn’t it the wife?
- Unpaid Labor – which is connected to career interruption. When it comes to house chores, who gets the larger chunk of the housework? Between a husband and a wife, or a brother and a sister, who does more of the house chores? Isn’t it the female? Because housework equates to unpaid labor. So think about full-time housewives who take care of the household all day but don’t get paid.
- Women live longer by 3 to 5 years and is a trend that actually exists globally.
So think about it. We are prone to career interruptions, we don’t get paid for doing the majority of the housework, and we live longer too! All the more reason why we should strive to achieve financial independence and create a financial plan as early as now.
What is a Financial Plan?
Now that you’re aware of the unique challenges we women face that are mentioned above, there is now a greater awareness of the need for financial planning.
Think of a financial plan like a roadmap for your money. It reflects where you financially stand right now and where you want to go. Whether you are your family’s breadwinner or not, you as a woman, still need a bird’s eye view of your family’s finances, most especially for your PERSONAL FINANCES.
In a nutshell, financial planning is to document your income and spending, debts, plus your short-term goals, mid-term, and long-term financial goals. Moreover, a financial plan isn’t set in stone. It is a stepping stone towards building a strong financial foundation that you can return to and revise annually or whenever you experience a big life or career change.
Financial Planning Tips For Women Philippines (Different Life Stages)
1. Financial planning tips for Filipino women if you are employed
Whether you are the female breadwinner or working part-time, these are the key steps to include in your plan.
Establish your best retirement fund method
- Government Agencies – Social Security System (SSS) is considered one of the easiest ways to invest since SSS contributions are mandated by law and are automatically deducted from your salary. But studies have shown that this is not enough as a retirement plan. You may opt for the SSS Peso Fund or the Pag-IBIG MP2 Program and take advantage of the 4 Tips to make the most out of Pag-ibig MP2.
- PERA – The Personal Equity Retirement Account (PERA) is the Filipino counterpart of the 401k Contribution Plan or the Individual Retirement Account (IRA) in the United States. It is a voluntary retirement contribution plan that gives you the freedom to save and invest up to Php 100,000 annually. Moreover, the returns are completely tax-free. Learn more about PERA through this article.
- Real Estate – Owning a home or any property by the time you hit your 40s is one of the main goals of Filipinos, and that is for a good reason. It’s an investment that makes sense as the value of your house or condo unit appreciates as the years go by, especially if you have chosen a great location. In addition, owning a property that can eventually be rented out can give you a source of income once you have retired.
- Insurance Plans – Another way to invest for your retirement is through insurance plans wherein your contributions can result to lump sums later in life. Aside from the financial protection it can payout for you and your family upon your untimely demise and in the event of a critical illness or accident, it is also an investment that you can potentially grow. But before delving into this method, read our article about the 5 Important Arguments Against Insurance That You Must Understand.
- Other Investment Options – Many retirees have diversified their funds in several different investment vehicles such as mutual funds, individual stocks, index funds, bonds, and the like just to potentially decrease overall investment risks while increasing their potential overall return. To see a list of the best investments in the Philippines from which you can choose for your retirement, check out our article: Best Investments in the Philippines.
Bulk up your emergency fund
It’s important to know How to Build an Emergency Fund in the Philippines. This is one of the most important things to do when it comes to financial planning for women in the Philippines. Experts say that it is best to have 3 – 6 months of your basic living expenses. This would be to cover things like food, transportation, and housing so you don’t have to leverage debt in the event of an unexpected situation.
Pay off high-interest debts
Start paying off any debts or loans you might have especially high-interest credit cards. High-interest debt is very costly and the longer you keep it, the more you actually pay. Craft a debt reduction strategy to get out of it fast!
Get properly insured
Review your insurance policies to make sure you have the right ones in place. Different types of insurance policies will include critical illness and disability, life, health, auto, home, fire, etc. Also, keep your beneficiaries up-to-date on all your policies.
Make a plan for your children
If you have kids, you can start saving for their college education needs. Start incorporating their shorter-term needs into your budgeting and savings plans as well.
2. Financial planning tips for women Philippines if you are in a serious relationship or marriage
Getting married and joining your finances together means working as a team. Here are some steps you can take to plan your finances as a unit:
Talk about finances as a couple
It’s important that you are financially compatible with your partner. If not, communicating your life and financial goals with your significant other is a must. Talk about what you’d like to accomplish together. Set time aside once a month to go over your progress and review your budget as a unit, including your investments, debt repayment, and savings.
Update your co-signatories or beneficiaries
Update your beneficiary information on your bank accounts. Remember to include your significant others, i.e., your spouse, children, and parents.
Update your insurance policies
Review your insurance needs and options and adjust accordingly, i.e., disability, life, health, auto, home, rental, etc. For instance, if you are recently married, you may want to add your spouse to your new policy.
3. Financial planning tips for women to take when switching jobs
Have you recently changed your job? Follow these steps to be sure your plan is on track!
Transfer your retirement accounts
If you’ve landed on a new job, don’t forget to move your retirement savings plan (if available) away from your old employer as this may result to employers charging maintenance fees for retirement accounts that belong to their former employees.
Enroll in your new employer’s retirement savings plan
Invest in your new employer’s retirement savings plan if they offer one as you wouldn’t want to take any unnecessary breaks away from your long-term savings goals.
4. Financial planning tips for women PHILIPPINES that are expecting a baby
When starting a family, how do you plan your finances for a baby? Use these key steps to properly prepare your plan for your new addition.
Update your budget to include your baby’s expenses
While having children is indeed a blessing, they also come with expenses. You want to ensure that you include your child’s expenses in your monthly budget. So, be sure to review and update your budget for when the baby arrives. You may also want to save up for childbirth costs that you will incur after 9 months.
Know the costs of having a baby
Consider what the costs of having a new baby will be initially. For example, the cost of formula, diapers, clothes, childcare, etc., and plan accordingly. Of course, you can learn ways to budget, cut costs, and save on items by being thrifty! Knowing the costs of having children is a vital part of financial planning for women.
Update your health and life insurance to include your baby
Update your insurance policies to include your child so they are adequately covered. Having the proper insurance for your child can tremendously cut costs on healthcare expenses and taking care of them if something happens to you.
Adjust your savings plans to include your baby
Bulk up your emergency fund to include your child’s basic needs for 3 to 6 months as well. Also, start putting money aside for your child’s future expenses and college education. Here are some tips on How You Can Secure Your Child’s Future Through Budgeting & Saving.
Create an estate plan
Having an estate plan is an important part of financial planning for women in the Philippines, but even more when you have children. You want to ensure that everything is in place by choosing a reliable guardian for your child and ensuring your assets are distributed accordingly as you wish.
5. Financial planning for women to take after a Separation or loss of a spouse
Unfortunately, separations happen, but it’s important to get back on your feet as quickly as possible when it comes to your money matters.
Update your financial accounts
Make sure to close all joint accounts (if desirable) and open new bank accounts under your name only. Update your beneficiaries on all your accounts, including your insurance policies and retirement funds.
Make a new Financial Plan for your personal finances
Learn how to budget on your own and try reviewing your finances every month at the very minimum. You would also want to focus on rebuilding and taking ownership of your finances in its entirety, making way to learn things like bulking up your emergency fund, tax planning, retirement savings, etc.
It’s also a good idea to be aware of your social security benefits. Finally, you can review and understand the tax implications of inheriting any investment or retirement accounts due to the loss of a spouse.
6. Financial planning tips for women PHILIPPINES taking care of elderly parents
Your parents are important, so of course, you should include them in your plan. Understanding the expenses and care needed is essential to preparing for upcoming expenditures for aging parents.
Determine the cost of care for your elderly parents
Understanding the cost of senior care is a must and it is advised to be included in your financial picture to prepare for the expenses you have to pay. For instance, out-of-pocket costs to cover medicines, gas to doctors appointments, food, and the like. Make use of senior citizen discounts and VAT Exemptions to maximize the benefits as well as your budget.
Review their plans and search for how to fill in the gaps
Determine what financial and health care options they have in place for themselves. This includes any insurance coverage and social security benefits, then you can determine what gaps need to be filled.
Update your filing status to include your parents as dependents
Update your parents as dependents on your insurance documentation, PhilHealth, and when you file your taxes. This can help you get tax credits to aid in caring for your elderly parents.
Financial planning for women in the Philippines is key to financial success
Financial planning for women in the Philippines is essential for success, no matter what stage in life you are in. Creating a financial plan and goal will help you take the steps needed to prepare you for emergencies and save for a comfortable retirement.
Most personal finance information in the Philippines has been tailored to the male demographic, so to be able to be financially confident about your finances, no matter your age, status, or field of work, is vital. Having confidence in your financial standing as a Filipino Woman will help you stress less and enjoy life regardless of where life takes you.
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Financial Planning Tips For Women Philippines (Different Life Stages)