build_nest_egg_money_lock.jpgI’m 40, and yet I have set nothing aside for myself. When the inevitable happens, I shall be caught toothless, incontinent and poor. As a single parent of two teens with a decent income that proudly allows me to support them (if their father gives, great. If he doesn’t, fine), I realized, however, that I have zero knowledge when it comes to managing my finances for the future.


There are a host of reasons why Filipinas delay saving for the future. Take your pick: 1) We think Prince Charming will come and rescue us from our dreary existence; 2) There’s always Mom and Dad to fall back on; 3) We space out when we hear terms like “time deposit” or “mutual fund” or “bonds”; 4) We’re just plain in denial about taking responsibility for our own financial health. By the time we see the value of financial planning for the future, it’s usually too late.

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Financial planning ensures your future and guards against the possibility of hardship in times of unemployment or illness. Most financial advisers suggest putting aside 20 percent of your income into a savings or investment account. On top of this, another 10 percent of your income should ideally go to insurance premiums.

“Now is the best time for women to save since we have the ability to earn as much as men,” says Joyce Lim-Chua, 29, vice president and personal banking head at HSBC.  “Money management and financial planning is vital for single women. We must save early, invest aggressively and spend less,” she adds. “Our desire for short-term gratification—looking good, enjoying a holiday, eating out, shopping—should not take precedence over our goals. If you occasionally buy on impulse, give yourself time to consider whether the purchase is really a must,” Lim-Chua advises.  


It’s never too early to prepare for your future, says Nana Alejandrino-Santos, 39, a senior financial adviser at insurance company Manulife. “Most young women don’t bother to look into the retirement options offered by the company that is hiring them. It’s only after many years that they realize they have nothing to look forward to. If this turns out to be the case, then you just have to do it on your own,” she adds.



Take a lesson from Maita Cuyegkeng, 26, marketing program manager of a multinational company. Her parents broke from the mold and instilled the value of learning to handle money wisely and independently. At an age when most women have only clothes and clubbing on their minds, Cuyegkeng is armed with tips on saving for a rainy day.

“A good habit to develop when starting a financial plan is to put aside a little money every payday into a separate account that you do not touch. How much money depends on your expected expenses for the month; bills to pay, a relative’s birthday...Once you’ve determined this, keep what you need in your transactional account then deposit the rest in your ‘hands-off’ account,” says Cuyegkeng.




With your “hands-off account” you can now look for other options to put your money in, such as financial products that will earn more interest than a regular checking or savings account. One such financial product is the time deposit. (Stay with me while I explain this, okay?) A time deposit is an amount of money kept in the bank for a fixed number of years. Since your funds are on hold for a certain period of time, you need to determine how much you’re willing to place and how long you are willing to keep it locked in. A minimum placement amount can be as low as P25,000 and go as high as the millions; the length of time it is kept on hold can be as short as one month or as long as five years. “Time deposits are a good option for people who have a low-risk appetite since it is principal secured,” says Cuyegkeng.


To get a clearer picture of how far your money can go, Lim-Chua showed us what you can expect by age 65 if you regularly saved P20,000 every year (that’s roughly P1,600 each month, which also happens to be the total amount you spend on your favorite cuppa at a premium coffee joint every day for a month) from the age of 30. If this money is placed in a time deposit with seven percent interest net return each year and the principal and interest are rolled over until the age of 65, you can actually expect to amass around P3,000,000.



One of the most common types offered is what is known as a defined benefit plan. This plan promises you a specified benefit amount upon retirement. “The pension plan is especially ideal for women who are in their mid-or late-30’s and have just begun to chew on the idea of saving because it is simply based on the number of years you want to pay,” says Alejandrino-Santos.


For instance: At age 35, you invest in a pension plan that guarantees you P1.1 million in 30 years (by age 65). You have 10 years to save for this investment. At a modest interest rate of seven percent, this means paying a little over P20,000 each year for 10 years. There’s a waiting period of 20 more years, but when you hit 65, you are guaranteed a payoff of P1.1 million. Hopefully you’ll live to a ripe, healthy age, but should you die before 65, the benefits go to your beneficiaries. Most insurance companies can also work in clauses to provide for disability and unemployment benefits.

Vanessa Vasquez, 33, is one of the lucky ones who started a pension plan soon as she started working. She’s a senior account executive for a television network and the single parent of a two-year-old boy.  She’s thankful that she was “sales-talked” into getting her very first pension plan 10 years ago when she thought she was merely doing a favor for her grandmother’s agent. “I was young then, with no responsibilities other than myself so I could barely feel the pinch of putting money into the plan. In fact, that was the selling point. It was just like buying lunch,” she says.


Through the years, Vanessa would invest in two more pension plans but only as a favor done to a relative or a friend, using the money from her commissions from selling TV ad spots. “It turns out my being a pushover has been a blessing and a benefit,” Vasquez says.

“Sometimes it feels like I’m just endlessly paying and paying but as I get older, the more I see the value of what I started, especially now that I have a son. I sleep better at night knowing I have these pension plans to fall back on,” adds Vasquez. Should she and her son’s father marry, it will be for all the right reasons and not because she needs him to depend on for the support of their child.


build_nest_egg_piggy_bank.jpgENDOWMENT PLANS


The endowment plan is a good choice for working women in their 20s. It is an insurance option based on your age and health. After a specified number of years agreed between you and the agent, you get the amount that you were insured for plus any dividends earned. This is especially beneficial if you are thinking of buying a condominium unit. “Your insurance policy can help speed up the approval of your bank loan, since banks require you to take out an insurance policy”, says Alejandrino-Santos.

“If your insurance company is accredited by the bank you are taking out the loan from, you can assign your existing policy to your loan,” she adds.



There are other plans out there that combine the single woman’s needs for coverage for illness, disability, a retirement fund, while earning interest on the coverage she pays for premiums, says Elvira Gacilago, 36, a manager at PruLife UK.


For those who aren’t satisfied with their company’s health insurance coverage especially for women-related illnesses, you can inquire about flexible insurance packages designed specifically for women aged 25 to 35. It provides maximum protection to women at various stages of life and a portion of the sum assured will be given in the event of an illness such as female invasive cancer (payment of premiums are waived in this case). Other optional benefits covering pregnancy complications and congenital anomalies can be factored into the plan too.

Gacilago cites one such plan that they offer. If at age 30 you started paying an annual premium of P20,400 (again, think of money you spend on coffee everyday) you would receive benefits amounting to P2.7 million by the time you reach age 65. Once more, we see truth to the adage that the early bird catches the most worms.

There are also combined savings, protection and investment plans ideal for single women who are risk-takers. Assuming once again that at age 30 you start paying a regular premium of P20,000 annually for 10 years  and that financial markets carry a rate of 10 percent, you can, after 35 years, receive benefits of around P3.5 million.


With endless possibilities like these, Gacilago is enjoying her singlehood. This wasn’t the case a few years ago when she lost her long-time job as payroll manager of a multinational food chain “I realized I had no back-up finances.  So I took charge of my own life, switched my career path to sales. I’ve found what I want to do until I am ready to retire,” she says.

“The earlier you start saving, the more benefits you’ll rake in. Just think of savings as an expense that secures your future,” says Gacilago.



When you feel confident enough to invest more of your savings, Lim-Chua encourages you to take a long-term perspective, such as investing a portion of your savings in dollars or in long-term instruments like mutual funds, bond funds, stock or equity funds. Don’t let the jargon scare you. Financial advisers are patient enough to explain these instruments in layman’s terms.


Whether Mr. Right comes along or not, financial planning is crucial to face the future with confidence. Alejandrino-Santos saw her insurance plan as a godsend in tough times. As the mother of six children aged three to 15, she and her husband went through a trial separation two years ago. “Knowing I had a nest egg kept me sane. When my husband and I reconciled, I was able to spell out my terms. Had I not been as financially independent, I wouldn’t have had a choice,” she says.

Meanwhile, the man who woos and wins Gacilago will be one lucky guy. “When I decide to marry, I’ll be entering the marriage with a lot more to offer aside from just my heart,” she says.

These women assure me that it isn’t too late to start a nest egg. Thanks to what I learned when writing this article, I’m investing in some financial plans to make up for lost time. Although it will cost me more now at my age, the image of me at 65, with my children well provided for as I sip caipiroskas on the lanai of a summer house in Boracay is certainly a future worth saving for.




Before choosing the method of building your nest egg, financial advisers suggest the following:

  • If you are employed, talk to someone in your human resource department who can run through the benefits of the health/life/retirement plans offered by the company. This will help you determine the amount of coverage you wish to have from a particular plan.
  • What are your most immediate financial needs? Are your concerns about the future health-related? Do you dream of going back to school? Or do you see yourself investing in a small business after retirement? Answering these questions will help you be more specific with the kind of plan to get.
  • Choose a major player in the insurance or financial field. Make sure the company is reputable and solidly backed with experience.
  • When speaking to an agent, don’t be afraid to ask questions about clauses or figures in the contract that you don’t understand. If you sense the agent isn’t patient enough in explaining things to you, shop for another one.


(First published in Marie Claire, March 2006; photo source: 1 , 2 )

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