As the standard of living soars in Kuwait, citizens as well as expatriates are finding it more difficult to save money or splurge on things they would like to have. Inflation has hit everyone hard, forcing many to resort to penny-saving measures and cut down on some luxuries of life. Saving and investing money is a stepping stone to managing spending habits and preparing for future expenses. Most people recognize the need to put money away for events or circumstances that may come up down the road.

You may be asking yourself why is there so much pressure to save money? If you have enough to pay for everything you need, why should you worry about putting any aside each month? There are a variety of reasons to begin saving money. Different people save for different reasons. But more often than not, saving money is easier said than done. Some save money to have an emergency fund to cover unexpected expenses. This could cover an unexpected car repair, your emergency appendectomy or a sudden job loss. Ideally your emergency fund should be about three to six months of your expenses.

Others save money for their retirement. When you save for retirement you are saving for your future. When you neglect retirement you run the risk of not being able to take care of yourself when you are older. Your retirement goals should come before saving for your children’s education or going on vacations. The earlier you start saving the less you will need to put aside each month to reach your retirement savings goals.
Pastor Guillermo Bantugan, a Certified Public Accountant and an advocate of “Anyone can save,” in this interview provides an overview of his advocacy aimed at helping expatriates on how to manage their finances, avoid the common financial pitfalls why people cannot save, how to overcome debts and be financially empowered by adopting some simple principles on managing your finances.
 

Question: Can you please tell us in brief about your “Anyone can save” advocacy?
Answer: Advocacy is a passion. My love for our “kababayans’ or compatriots has inspired me to embark on this advocacy. Being an Overseas Filipino Worker (OFW) for 28 years now, 23 years in Bahrain and now five years in Kuwait, I have seen that majority of them are not able to prepare for their retirement no matter how long they stay abroad. Many OFWs go back home for good with hardly enough money to live comfortably after their many years of working abroad. Worse, they end up with just the same or even less than what they had when they first left. This may also apply to other expatriates that I know. Seeing this phenomenon prompted me to share my knowledge on how one can manage his or her finances effectively that would allow him or her to save for the future. I started it out with a circle of friends then I began reaching out to the community and currently, I conduct seminars for free to accommodate a larger group. The concept of savings in my advocacy is based on the 7x7 (Biblical) Principle which is income less savings = expenses instead of the traditional formula of savings which is income less expenses = savings. I find the 7x7 formula more effective when you want to save because this means setting aside some amount in time of plenty to prepare you in time of hardship.

Q: What are the causes why people are plunged into financial problems?
 A: One of the main reasons why people face financial problems or are heavy on debts is overspending. Most people don’t know how to manage their finances and they spend their money like there’s no tomorrow. They don’t think anymore how hard earned money for a month is spent just in one day. Be realistic. Live within your means. Spend only on things that you need and not merely because you want it. Be able to distinguish needs and wants. Always remember that no matter how big your salary is if you don’t know how to manage your finances properly then you will always end up with financial problems, that’s why it’s very important that you should learn how to manage your personal finance properly.

Q: What are the most common money mistakes that people commit?
 A: One of the most common mistakes is not making or miscalculating your budget.
Not having a Budget prevents you from planning your expenses. On the other, hand, miscalculating your budget may result in overshooting your expenses. Both may end up in spending on uncontrolled and unnecessary things. Another one is impulsive buying. Grand Sale, Crazy Prices, up to 90 discount discount, sounds good in theory, but in reality they encourage you to spend more than you would otherwise and often end up buying things that you don’t really need.
Another mistake is not negotiating prices, nearly all items on sale have their base prices that is not known to potential buyers. Even department stores have some leg room on their posted prices, and many stores usually match competitors’ prices. However, consumers can’t ask for discount or price reduction especially when shopping at well-known malls.

One of the mistakes too is mismanaging loans. Loans are good if used wisely. Taking Loans can enable you fund much needed expenses or allow you to invest in projects that offer high returns. Being so afraid of debt that you avoid it altogether can force you to miss out on good opportunities. On the other hand, taking too much debt with high interest can lead to your financial ruin. One of the money mistakes could be earning income from one source only.
By earning income from a variety of sources, you actually increase your financial capability. There are many ways for new sources of income. This may include a part time job, baby sitting, catering to friends or even writing in a popular magazine or newspaper. Finally, one of the mistakes too is investing without proper study A lot of OFWs have ventured into business but lost their entire capital due to lack of knowledge on the nature of their investment and misplaced trust in people who were entrusted to run their business. Nearly everyone makes one or more of the aforementioned mistakes. Which ones do you make? You will have a much easier time achieving your financial plans if you avoid these mistakes.

Q: How can one get out of debts?
A: Once you have determined that you want financial freedom, you need to set up a debt payment plan. You can say that you want to pay off debt, but until you make a plan and stick to it, you will not go anywhere with it. Many people avoid making a plan, because it involves adding all of your debt together, and the numbers can be depressing and scary. However, knowing that you are doing something about your debt helps to relieve those fears and the nagging worry that you may be experiencing. Maybe, one of the concrete steps is throwing away your credit cards. More often than not a credit card entices you to overspend. I have been living without credit cards for three years now. Just try it.

Q: How can one manage his/her personal finance effectively?
A: Personal Finance refers to your ability to generate an Income and using it wisely to ensure sufficiency and prosperity. To be financially sufficient means having enough money to pay for your needs at any given time and financial sufficiency is developed over time and should be carefully planned for. To be financially sufficient, you should clarify what your needs are, create your financial resources and prepare a financial goal and set a plan on how to achieve it.

Q: How can people achieve financial sufficiency when majority of the people claim that it’s very hard to save especially when the salary they receive is not even enough to make both ends meet?
A: As I’ve mentioned earlier, anyone can save but it takes willpower and discipline to do it. First, try to list down all your expenses incurred for the month, review the list and try to eliminate things that you don’t actually need the part of the money you used to spend on these things can be set aside as savings. It’s hard to let go off splurging habits but you have to try harder and set aside even KD10 per month, then in a year you can have savings and multiply it with the number of years you’ll be staying here. Reduce your expenses. Second, try to increase your income on the side aside from your full time job, maybe you can cater food or bake pastries for your friends, babysit or other stuff that you can do. The third one is the best way which is reducing the expenses and increasing your income if you’re able to do the combination then that’s the excellent way.

Q: What are the simple steps to financial sufficiency?
A: I can outline four steps towards financial sufficiency which I will discuss at length later. First step is save a portion of your regular income. Second, manage your savings to generate passive income. Third, use your passive income to create an investment and fourth, use the income from your investments to fund chosen retirement style. Set your financial goals by putting your goals in writing. State your goals in positive terms. Set a specific timetable or target, don’t procrastinate. Monitor Progress regularly and adjust your goals according to reality. Keep in mind SMART goals — specific, measurable, attainable, realistic and time-bounded.

Q: Part of your advocacy is encouraging expatriates to become entrepreneurs, why?
A: Yes there are a number of positive sides of becoming an entrepreneur once you have saved up and have enough capital to put up your own chosen business. You are your own boss, you can earn more and explore your creativity in your business. At the same time, you can help other people and if things go well, you can give this as a legacy to your family.
 

Q: Putting up a business also entails a lot of risks, what’s your take on this?
A: True and that’s the reality that we have to face, the risks. There is a chance that we can incur loss, the market fluctuates, more responsibilities are on you, longer working hours and other unforeseen problems but we have to stay positive and before embarking on a business we have to follow numerous steps as safety nets.

Q. What are factors to consider in putting up a business?
A: There are several factors to consider, first is know yourself, your skills and capabilities. What are your strengths? Are you patient? Are you inventive? Do you have the self-confidence to embark on a business? Do you value word of honour when dealing with people and clients? Are you responsible and determined to take the risk? Know the locality or the environment. Check the available infrastructure, the competitors and the people. After that, choose what kind of products or services you want to bring in and deal with. Come up with a business plan and have the needed capital and proceed with the establishment of the business. I want to stress that it’s very important to prepare a feasibility study first if your idea is profitable. What is the possibility of its success? Is it going to be successful? You must do a business plan.
 

Q: In brief, without getting so technical, how can one make a business plan?
A: A simple business plan has four parts. The first part is the marketing plan which refers on how to sell the product or service. The second part is the technical plan on how to make the product or deliver the service to the clientele. The third part is the organizational plan which pertains to the manpower requirement and fourth part is the financial plan. For the marketing plan, you should explain in details how the product or service can benefit the clients, who will be your target market, the competitors, pricing of the product/service and how can it be sold. For the technical or production plan know where to get the raw materials, production time, materials needed, where can materials be procured and how much and how can the product be installed or plan of use. For the financial plan, you should at least have a knowledge in basic accounting, otherwise, you can always seek the assistance of some accountant friends. For the financial plan which pertains to the capital, you can use your own savings or there are some other ways like bank loans or some lending institutions but I advise them not to borrow money immediately unless, they have come up with the feasibility study and carefully examined its profitability.
 

Q: On a final note, what can you say to all those who want to save but are still unable to do so?
A: The solution to most of financial problems lies on one’s ability to manage one’s income. Lacking this ability, a person is unable to spend wisely and often ends in debt. Once you decide to save and on how much you want to save, there are three decisions that you have to make, to make it work. I call it the three decisions of success: decide to be Determined, decide to Discipline oneself and decide to be Decisive.
 
biography

Pastor Guillermo Bantugan is Certified Public Accountant (CPA) who has held various positions such as head of accounts and budgeting and cost control management, financial planning and risk management in multi-national companies in Bahrain and Kuwait for the past 28 years. He currently works as a Budget and Cost Controller in one of the companies in Kuwait. He is the former President of Philippine Institute of Certified Public Accountants, Bahrain Chapter and also served as Chairman of Professional Development Committee and Founding President of Philippine Institute of Certified Public Accountants, Kuwait Chapter which promotes his advocacy on “Anyone can save: Managing your personal finance.”

Educational Background:
Bachelor Science in Accountancy, Philippine School of Business Administration, Manila
Post Studies in USA, Singapore and West Germany in the fields of Accounting and Financial Management.
 

Achievements:
Conducted numerous seminars on how one can save, accountancy, entrepreneurship
Guest Speaker in the First PICPA Global Convention, Las Vegas, Nevada, USA, September 2004
Chairman ME Delegation to 2nd PICPA Global Convention, New York, USA, September 2007
Co-Chairman ME Delegation to 4th PICPA Global Convention, Vancouver, Canada, May 2011
10 Outstanding OFWs in Bahrain awarded by Philippine Embassy
 

By Michelle Fe Santiago - Arab Times Staff