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April 21, 2012


July 10, 2010

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As the late former President Marcos once said, “For a country to be progressive, discipline is a necessity.” To a certain extent, he was right. How can a country improve its economy when everything is in disarray? Discipline can, thus, be equated with the habit of putting everything in order.

Just look at our Asian neighbors, such as Singapore, Taiwan, South Korea and Japan. After World War II, we were far ahead of them in terms of wealth and progress. But, at present, we are now lagging behind them. The secret to their status now can be attributed to their strict implementation of regulations. It can, thus, be concluded that wealthy nations are composed of wealthy and disciplined citizens.

Discipline is a simple word that is always taken for granted. But unknown to many, it is a factor in shaping our destiny. Discipline is merely following sets of guidelines for the improvement of our lives. Unfortunately, discipline can also be defined as the habit of doing something one hates most. A perfect example is going to work early. I still remember during my early years in the company when I once reported late by five minutes (my first and last time to be late). Our general manager called up looking for me. When I returned his call, I explained that I already dispatched the crew as early as 6 a.m. by informing the members the day before of their assigned work. But he would have none of it and his response stunned me: How can you be an example to your subordinates if you are always late? His admonition made perfect sense, I realized later. He had the right to reprimand me, not because he was my boss but because he always comes in early. Even if he was the boss, he made it a habit to come to the office early. In short, discipline is the habit of doing the right thing. And it is the hardest thing to do.

When it comes to managing personal finance, discipline is a major contributor to the success or failure of one’s finances. As studied by our Asian counterparts, Filipinos have a very low saving ratio. This is one of the reasons we became a poor nation. This may be due to the influence of our conquerors or colonizers like the Spaniards and the Americans. From Spain, we got siesta and fiesta. From America, we got shopping. All of these acquired habits made the Filipinos consumers and spenders. Maybe if we acquired the mindset of the Japanese conquerors, we would now be equal with our progressive Asian brothers.

Try to notice the emotions of people during payday: isn’t this their happiest time? With their happiness, comes panic and madness. That is why malls always have “madness sale” every quarter. I am at a loss on why people panic over how to spend their hard-earned money rather than stay calm and think of how to start saving money for growth. As for me, what I have done for the past 20 years is that I made it a point to save 30 percent of my monthly income in a bank account. And when my savings grew, I transferred them to a higher-yielding instrument. Up to now, whenever I have extra money, I still carry that discipline and habit. One time, I was having a friendly chat with my superior. He was surprised to learn that in spite of my having a family, I still manage to save quite a big amount monthly. But this time around, it is not into savings account; I wisely invest my extra money. When I share my experience with colleagues, I always emphasize “discipline” and “habit.” It is because no matter how high one’s income is, or how good or high-yielding an investment instrument is, for as long as the person does have the right mindset or the habit in handling money, he will still end up broke.

Financial discipline is one thing that is hard to do. Below are the baby steps I have taken when I started managing my income:

1. Desire or want less. When I earned my first salary, I was so happy. But I always put my emotions in check. I never bought anything on impulse. After giving a portion to my mother, I stashed away my money in my savings account. The more I do not see my money, the less the chance of my spending it unnecessarily. I always consider money saved as money spent. However, it is money spent for buying my future. I always believe that money spent for a want or desire is money lost already.

2. Live below your means. Some may scoff at this statement but a lot of wealthy people still adopt this principle. This simply means that when one earns money, he should make it a point that his lifestyle is lower than what his income can afford. This does not mean he has to live like a pauper. This simply means he can also enjoy life, provided he does not exceed his income. The key here is delaying gratification by controlling your emotion. I also do not give in to challenges hurled at me to make me spend. Once, someone even called me broke when I refused his challenge. It didn’t matter to me; what mattered was what I know about myself and not what the fellow claimed to know about me. Thinking about it now, maybe the guy was really the one who was broke so he wanted me to spend.

3. Save regularly. This is the area where a lot of people fail. Whenever I talk to people and the topic shifts to money, they always say they have no savings, and yet when extra money like incentives or bonuses comes their way, they always think of spending. They always ask me why I do not seem to worry about money. I always tell them one thing: I have savings. They always complain that it is hard to save. For me, savings is not about the amount of money but rather the habit and the discipline. Like the slogan I saw in Banco de Oro flyer, “Savings is FUNdamental”. It makes sense.

With proper discipline, the first thing that will be affected is your thought.

Whatever your thought is, it becomes your word.

Whatever your word is, it becomes your action.

Whatever your action is, it becomes your habit.

Whatever your habit is, it becomes your character.

Whatever your character is, it becomes your destiny.

Edmund Lao is a candidate for Registered Financial Planner (RFP) designation. He is a graduate of Electrical Engineering from Mapua Institute of Technology. Currently, he is a sales engineer in one of the biggest media companies in the Philippines. He is also an active contributor in, the country’s premier personal finance web site. Join the 21st RFP Program (October 2 to November 20, 2010). Visit or inquire at No. 634-2204.

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